Can entrepreneurship training reduce dependency on government benefits? A number of experimental social programs are trying to find out. Michigan, Minnesota, Mississippi, and Iowa all have pilot projects in which interested welfare recipients can get training to start their own companies -- and continue receiving welfare during their first year in business. To date, participants have gotten seed capital from banks, investors, and state loan programs. In September, Washington State will launch the first U.S. program to allow unemployment-benefit recipients to get a lump sum as small-business seed capital.

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More small companies are using preferred-provider organizations (PPOs) as a health-care option. With a PPO, employees are offered incentives -- e.g., lower deductibles -- to use a network of "preferred" doctors. Until a few years ago only large employers could swing such deals. But with competition growing among health-care providers, PPOs have begun looking for new customers. "Small businesses are the last frontier for PPOs as far as markets they can penetrate," says consultant Sharon Graugnard. One indication: Private Healthcare Systems Ltd., a PPO targeting 2- to 100-person companies, reports growth from 26,000 employees enrolled in January 1987 to 628,000 today.

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When it comes to helping entrepreneurs, Beaumont, Tex., sure tries harder. Last year, with the city still reeling from the oil slump, the may-or hatched an unusual plan to bolster the economy by making privately subsidized, low-interest loans available to growing companies. About 20 Beaumont citizens took out $1.3 million in CDs with a proviso: as banks make local job-creating business loans, they can drop the interest paid on matching portions of the CDs to 4% for two years. That allows the banks to make the loans at 5½%. The catch? Finding projects that meet local banks' loan standards. In the first eight months only two companies have qualified.

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Small companies can do leading-edge research just as well as -- or better than -- big ones and nonprofits. That's the implication of a recent government evaluation of the Small Business Innovation Research (SBIR) program, which requires some federal agencies to direct research funds to small firms. When it became law in 1982, critics said SBIR would promote inefficiency. But in a survey of research officers at the agencies involved, SBIR projects scored better than other research projects for overall quality and in eight of nine more specific categories. In particular, the SBIR projects were found more likely to lead to new commercial products or services.

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Under new regulations, banks will soon have to put aside more capital to back up commercial loans than for many other assets. The great majority of banks won't have any problem doing so. But a few -- including a disproportionate number of the biggest U.S. banks -- will be undercapitalized, and that could affect their willingness to make new commercial loans. "The banks are going to begin taking a harder look at how they allocate capital," says bank expert Alex Sheshunoff, who advises small companies to check that their banks' attitudes won't change. The states he sees as most likely to be affected: Texas, Massachusetts, California, Arizona, New Hampshire, and New York.

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State governments are looking for ways to encourage even very small companies to offer health insurance. Their aim: to reduce the number of uninsured workers, whose bills are passed on to other companies as higher hospital costs. Oregon gives a tax credit to very small businesses that start offering health insurance, and California is planning to do so. New York, Florida, Wisconsin, Maine, and Arizona have pilot programs experimenting with ways to increase health coverage in small firms -- for example, by subsidizing premiums, negotiating group discounts, or relaxing underwriting restrictions.

-- Martha E. Mangelsdorf