Some states assist in starting a business
According to a Wall Street Journal report, several states are now allowing entrepreneurs to collect unemployment benefits—while they're building their business. In these states entrepreneurs who want to launch a business may be able to get a cash infusion from an unexpected source: their unemployment checks.
In the past if you were unemployed and started your own business you would have lost your benefits just when you needed cash to pay your daily living expenses or fund your new enterprise..
Now, under the Self-Employment Assistance program, workforce security information qualified candidates can keep collecting unemployment while they build their business, and can sometimes get state-sponsored training and counseling as well.
There are many difficulties you will encounter if you wish to take advantage of this program and only a few states offer it. In addition you can't apply to extend your benefits if you use this program, so your unemployment checks are cut off after 26 weeks.
Right now only the following states offer the SEA program: Oregon, Washington, Delaware, Maine, New Jersey and New York. (New Jersey's program has recently been revamped and the SEA program is now known as the Entrepreneurial Training Program for the Unemployed.)
If you are interested in this program be aware the selection process is difficult.. States are required by federal law to determine that you would be likely to exhaust your benefits without finding work unless you started a business. Some states such as New Jersey sponsor the training at community colleges. Other states, such as New York, Washington and Maine, require training but you must pay for the courses. States usually review your business plans for feasibility, and once your enterprise is up and running you must meet certain goals and provide a business marketing plan.
In some cases, you must also show that you have the resources to get your business off the ground. In other words you must have additional moneys to insure you can get your business off the ground.
The information above is gleaned from a Wall Street Journal Report: Money Game by Barbara Haislip.