Wednesday, July 1, 2009

Senator Hagan Talks Shop with Small Business Owners in Western North Carolina

Senator Kay Hagan (D- NC) made a visit to AEO member Mountain BizWorks in Asheville, NC on Friday, June 26 to host a small business roundtable with seven BizWorks clients. As they took turns sharing their stories with the Senator, one thing became apparent – Mountain BizWorks played a huge role in the success of each business. “Mountain BizWorks is the only reason I am here,” says Jay Weatherly, owner of The Dripolator in downtown Asheville. “They supported me and challenged me the whole way.” Almost all the entrepreneurs got started with a microloan from BizWorks, but the personal investment by the staff was what really made the difference. “BizWorks gave me a shoulder to lean on. They really advocate for us [small business owners] and I really appreciate that support and having someone in my corner,” says Sheryl Rudd, co-owner of Heinzelmannchen Brewery in downtown Sylva.

Ironically, funding for entrepreneur training and technical assistance programs is hard to come by. But as these entrepreneurs demonstrated at the roundtable, it can make the difference between business success and failure. The Small Business Administration (SBA) PRIME program (Program for Investment in MicroEntrepreneurs) provides funding to nonprofit organizations like Mountain BizWorks to provide in-depth and intensive, one-on-one business counseling and training. In order to meet the needs of emerging and existing entrepreneurs in the new economy and to make the program available in more states, AEO is recommending $15 million for PRIME in Fiscal Year 2010. To learn more read our PRIME sign on letter.

The following Mountain BizWorks clients participated in the roundtable discussion with Senator Hagan.

Together these seven entrepreneurs created 50 jobs in Western North Carolina.

Monday, June 22, 2009

AEO Member Spotlight

The Women's Economic Self-Sufficiency Team (WESST)

About the Organization

Location: Statewide in New Mexico, with headquarters located in Albuquerque, NM.

Populations Served: Historically, WE
SST has primarily served low-income women and minorities in New Mexico but extends its services to any entrepreneurs who want to start or grow a business. Since its inception 20 years ago, WESST has facilitated the start-up of 2,025 businesses, the creation of over 3,100 jobs and the provision of $3.5 million in capital to 420 borrowers.

In 2009, WESST opened the WESST Enterprise Center (WEC), a 37,000 square foot LEED-certified small business incubator in downtown Albuquerque. Once fully occupied, the WEC will house between 18 to 22 growth-oriented businesses, each with the ability to create jobs for low-to moderate-income individuals.

Microenterprise Development Services Provided: WESST offers classes, workshops, seminars, consulting, loans, and business incubation. Over 50 training programs are available for clients, ranging from workshops on basic keyboarding skills and seminars like “Facebook for Business” to a 12-session course called Marketlink that addresses business goals, strategies, and set-up.

Mission Statement: The mission of WESST is to facilitate economic self-sufficiency through sustained self-employment, particularly for its target market of low-income women and minorities in the state of New Mexico. Founded in 1988, WESST promotes entrepreneurial development by offering clients a comprehensive array of training, technical assistance and access to capital services targeted to both sta
rt-up and existing businesses.

WESST receives a donation check of $15,000 from Allstate Insurance Company in support of the WESST IDA Program in Albuquerque and Las Cruces. From left are Clare Zurawski, Albuquerque Regional Manager for WESST; Barbara Lopez, IDA Program Coordinator for WESST; Scott Glazier, Territorial Sales Leader for Allstate; Agnes Noonan, Executive Director of WESST; and Karen McCann, Market Distribution Leader for Allstate.

Why Does Microenterprise Matter?

Why does microenterprise development matter in your community?
Small business is the backbone of the New Mexico economy. There are very few large corporate employers, particularly in rural areas.

What are the most pressing needs of entrepreneurs in your community?
Business management skills and access to capital are always in demand. Most of our clients come to us as experts in their given field with little experience actually marketing their product o
r service, managing people or business finances.

How is your organization assisting entrepreneurs survive the recession?
There is obviously no magic formula to survival, but in the case of our loan fund, we are allowing our borrowers to restructure their loans to get through these tough times. We are also offering training and consulting in affordable marketing strategies such as search engine optimization and social media. We are committed to developing our incubation program so that the early stage companies located at the WESST Enterprise Center will be well positioned to not only survive
, but to leverage this economy to their benefit.

How do you think the US microenterprise development field can best help microentrepreneurs nationwide?
Microenterprise development programs can best help entrepreneurs nationwide by listening carefully to their needs and responding with as much depth and quality as possible. Some entrepreneurs need to change their core business model to survive; others need to cut costs and leverage the Internet to find new customers. To support small businesses effectively, our own organizations must adapt to the “new normal,” model the best practices we advise our clients to employ, and find ways to innovate ourselves.



WESST Enterprise Center,
609 Broadway Blvd. NE,
Albuquerque, NM 87102


Organization Successes and Challenges

What was your biggest success in 2008?
Finalizing the construction and set up of a new building, the creation of a small-business incubator and moving into the new facility was a great success for WESST. The culmination of several years of diligence made the WESST Enterprise Center a reality.

What was your biggest challenge in 2008?
Managing ongoing business training and creating new material for WESST clients appropriate to the economic situation while simultaneously moving into the Enterprise Center was a challenge, but the WESST staff achieved a seamless transiti
on.

What are your goals for 2009?
• To continue to grow the WESST Enterprise Center incubator program by recruiting new companies, and to be fully occupied by the end of 2010.
• To develop and implement strategies regarding WESST’s distance learning initiative.
• To grow the WESST Loan Fund by 10%.

Organization Statistics

In 2008
Clients served: 1,265
Microloans: 43
Dollars loaned: $698,250
Average loan: $16,238
Jobs created by microenterprise clients: 162

Cumulative (last 10 years)
Clients served: N/A
Microloans: 410
Dollars loaned: $3,302,649
Average loan: $6,051
Jobs created by microenterprise clients: 3,100











WESST Grand Opening – Ribbon cutting ceremony.
From left: Dr. Jacki Peiracci Riggs, Senator Jeff Bingaman, Mayor Martin Chavez, Lt. Governor Diane Denish, WESST Past-Chair Carol Radosevich,
EDA regional Manager Pedro Garcia and WESST Executive Director Agnes Noonan.

Wednesday, June 17, 2009

AEO Community Helps Entrepreneurs Find Opportunity in the Green Economy

The Green economy is regarded by many as the next big business wave and has been touted by some, including President Obama, to have great potential in creating new jobs. The U.S. microenterprise development industry is responding to this new market opportunity and launching innovative green business support services including loans specifically geared towards environmentally friendly services and products and helping existing business owners go green.

Green Innovations in the AEO Community
In Georgia, AEO member Appalachian Community Enterprises (ACE) recently launched the Georgia Green Loans program to provide $35,000 or less in business capital to help entrepreneurs green their businesses. Grace Fricks, ACE President and CEO says the new loan program will soon be available statewide through partnerships with Albany Community Together in Albany, GA and the Small Business Assistance Corporation in Savannah, GA. “Green is not a fad,” Fricks said. “It’s the future for all of us.”

In New York City, AEO member ACCION USA is a partner in the city’s Green Carts program. The initiative promotes access to healthy foods and supports street vendors who sell fresh fruits and vegetables in neighborhoods where the majority of the population report rarely consuming the recommended daily serving of fruits and vegetables. ACCION USA offers reduced-interest rate loans to Green Cart vendors to provide them with the money to purchase a cart and the inventory to get started.

While many AEO members do not yet have a formal green loan program, they’re still finding ways to support their clients’ eco-interests. The Utah Microenterprise Fund in Salt Lake City has previously given funds to businesses like Eco Moto, an alternative transportation specialty store.

Resources for AEO Members
EcoVentures International, an AEO member in Washington, DC provides consulting services, tools, and training to help microenterprise development organizations assist their microenterprise clients to understand and take advantage of the new opportunities in the green economy. At the AEO National Summit on Entrepreneurship last month EVI presented the Rural Enterprise Development and the Green Economy workshop, which discussed the trends and tools needed to link rural entrepreneurs to green sectors and markets. (To download the training materials, click here).

Also at the National Summit, Melissa Bradley-Burns, Senior Strategist for Green For All, delivered a rousing challenge to the microenterprise development field to “escalate and elevate” their work as green jobs take center stage in the Obama economic recovery process. Green For All is a national organization dedicated to improving the lives of all Americans through a clean energy economy. The group works in collaboration with the business, government, labor, and grassroots communities to create and implement programs that increase quality jobs and opportunities in green industry – all while holding the most vulnerable people at the center of its agenda. Audio of Melissa’s speech will be available on AEO’s website soon.

Entrepreneurs can also find sources for environmental grants and loans, including pollution control loans, green technology grants and energy efficiency projects, through the U.S. Small Business Administration at Business.gov.

Measuring the Carbon Footprint of Business
Existing businesses that want to “go green” but perhaps don’t know where to start can look to Intuit for help. The company that makes QuickBooks and TurboTax is now offering a free service for entrepreneurs called Green Snapshot, which creates a carbon footprint analysis for businesses, and provides them with recommendations on how to lower their impact and communicate their environmental achievements to their customers.


Does your organization offer special support or loan options to businesses seeking to be a part of the Green Economy? If so, let AEO know.

Tuesday, June 16, 2009

AEO Policy Alert


USDA has decided not to issue a Notice of Funding Availability (NOFA) for the Rural Microentrepreneur Assistance Program for FY ’09 funds. Instead USDA will propose rules, likely in December for FY 2009 funds with a comment period and then final rules sometime in FY 2010. The $4.5 million slated for FY 2009 will roll over in the program for FY 2010. The 2010 President’s budget provides approximately $22 million for the Rural Microentrepreneur Assistance Program which does not include the $4.5 million from FY ’09 funds. Adding in those funds, the total budgeted amount would be $26.5 million in FY ‘10.

It’s great that more funds will be available for programs next year. However, programs now are suffering because the FY 2009 dollars have not been distributed in FY 2009.

Contact your Congressional member today. Call US Congressional Switchboard Toll-free Numbers: 1.800.833.6354 and USDA at: 202.720.9113 today and request that the $4.5 million allocated for the Rural Microenterprise Entrepreneur Assistance Program in FY 2009 be distributed to programs in FY 2009.


What do you think about funding for the Rural Microenterprise Entrepreneur Assistance Program? Leave your comments on the AEO Exchange Blog.

Monday, May 4, 2009

AEO Member Spotlight

Maine Centers for Women, Work, and Community (WWC)
About The Organization

Location: Statewide in Maine, operating out of 18 centers and sites. Administrative offices are located in Augusta, ME.

Populations Served: Displaced homemakers, single parents, dislocated
workers, unemployed individuals, low-wage workers, and others in transition. 82% of those served are women; 78% are low to moderate income. 58% are in rural communities. We serve over 1600 individuals per year through all program areas including over 700 microenterprise participants.

Mission Statement: The mission of Maine Centers for Women, Work, and Community (WWC) is to help women succeed in the Maine economy and achieve economic security for themselves and their families through access to education, jobs that pay a livable wage, self employment, financial literacy and asset development, and civic leadership.





Laurie Ouellette - owner, Sweet Pea Designs,
a wedding planning and florist business in Lewiston, ME. She started in 2004 and has grown steadily. She recently got a contract with a local college.


Why Does Microenterprise Matter?

Why does microenterprise development matter in your community?
Maine is characterized by small towns and communities that offer a high quality of life surrounded by a natural environment that is well appreciated and attractive. Small enterprises form the core of the economies in these communities.

Maine is a state of small businesses, with 78.4% of businesses having nine or fewer employees while only 1.6% have 100 or more employees. In 2006, the number of individuals employed by microenterprises in Maine
was 177,182 or 21.2% of all employment in the state.

Maine is also a largely rural state, with a strong, if diminishing foundation of traditional natural resource based industries and self-employment in forestry, fishing and farming. Maine residents have cultivated an independent streak over many decades and are well suited to self-employment. Mainers are creative, self-reliant and hard-working.

What are the most pressing needs of entrepreneurs in your community?
When asked, entrepreneurs say they need help with the following things:

  • Skills and services in marketing and promotion
  • Regulations, financing, and other government programs that are more responsive to the scale of their operations rather than being geared to the few large enterprises in the state
  • Access to health care and health insurance that is affordable for owners and employees
  • Better infrastructure, such as high speed internet access and roads, rail and other transportation systems
  • A coordinated technical assistance, training and support system, with easy access to information
How is your organization assisting entrepreneurs to survive the recession?
WWC microenterprise trainers are helping entrepreneurs weather the economic storm in a couple of ways:
  • Assisting them in focusing on their strategic vision and planning
  • Connecting them with peers, helping them expand their networks
  • Promoting their businesses through our website, events, and news articles (Example: the Maine legislature holds an auction every year to raise money for a scholarship. This year WWC offered a basket of products made by our entrepreneurs)
How do you think the US microenterprise development field can best help microentrepreneurs nationwide?
  • First, we need a strong association that can speak to the value of microenterprise on national and state levels.
  • Second, we need to empower microentrepreneurs to speak with their own voice on issues of importance: health care, education, the environment, energy, community.
  • Third, we need to ensure that microenterprise organizations receive the support they need to do the work in the field and to do it well and to document what we do.





Jennifer Moore Temple, owner, Buzzie Bee Diapers, a cloth diaper service that emphasizes the environmental and health values of her business. She operates in the Rockland area.



Organization Successes and Challenges

What was your biggest success in 2008?
This is our 30th Anniversary! Sustaining our diverse organization over that time period has to be our biggest success. We have been holding celebrations in regions throughout the state that will culminate in a final event in May. As part of our celebrations, we are honoring 30 “Champions” – individuals who have been our partners, who have supported our mission, who have worked side by side to advance women’s economic opportunities. Those partnerships are part of our greatest success.

We were also successful for the first time in receiving a federal grant to conduct a two-year general program evaluation and demonstration of the effectiveness of our service strategies.

What was your biggest challenge in 2008?
We are always challenged to stay fresh, focused and flexible in a dynamic environment, whether facing changes in funding, personnel or external trends and demands. This year, the general economic conditions merely added depth to those on-going challenges.

What are your goals for 2009?
Our goals for the coming year include:
  • Stabilize our core funding
  • Focus on delivering and documenting training and technical assistance that best supports our mission and the needs of our participants as identified in the federal grant
  • Support rural entrepreneurs in building skills and comfort in using new technologies (web 2.0 tools and resources)
  • Continuing to experiment in designing and delivering training using distance education technologies
  • Promote policies that increase state support for microenterprise development




Anna Marie Tocci, owner, North Star Cafe, Portland. Her cafe has become a community hub in a resurgent part of downtown. With her business partner, Kim Anderson, they serve teas, coffee, local foods, and support live music, poetry readings.

Organization Statistics

In 2008
Clients Served: 148
Microloans*: 4
Dollars loaned: $4000
Average loan: N/A
Jobs created by microenterprise clients: 1.3 jobs per business started (estimate based on past outcome surveys)

Cumulative (last ten years only)
Clients Served: 2547
Microloans*: 10
Dollars loaned: $8815
Average loan: 880
Jobs created by microenterprise clients: Estimated at 1300 jobs over last ten years


* WWC also works with clients to leverage loans from other public and private lending sources. One third of all WWC-supported FDA savings accounts are for business assets.
Susan Landry, owner of Tranquility Acres in Buckport, a grass-fed Belted Galloway cattle and Bard Rock chicken farm she operates with her husband. They sell natural meat and eggs.

Monday, April 6, 2009

Exchange Weekly Microbusiness News Roundup


Every week AEO gathers small business headlines and links from online media publications and blogs. Here’s what was in the news the week of March 30th.

AEO IN THE NEWS

SMALL BUSINESS NEWS












Wednesday, March 25, 2009

Distance Learning WESST Style


In 2009 AEO is making a commitment to use new technology to provide the field with more training, communication, and networking opportunities – i.e. social networking sites , webinars, and the AEO Exchange Blog – our members are experimenting with distance learning to reach more entrepreneurs. Below, guest blogger, Wally Drangmeister of AEO member WESST in New Mexico shares their distance learning experience.
Guest Blogger: Wally Drangmeister, WESST Director of Client Services

WESST is a non-profit organization in New Mexico that provides entrepreneurs across the state with the resources, information, skills and technical assistance they need to be successful. New Mexico spans over 121,000 square miles, and is nearly the size of New England and New York combined. There is a tremendous need for WESST’s services across all of New Mexico, but the sheer geographic size makes reaching every entrepreneur a challenge. Distance learning is helping the organization overcome these challenges and serve more entrepreneurs.

Cost of Entrepreneur Training
The cost of providing services increases as the number of participants per instructor decreases. The number of rural entrepreneurs in need of training taken in aggregate across the state may be sufficient to make training cost-effective, but that’s not so in any given location. In the sparsely populated areas in rural New Mexico it is difficult to fill training classes and travel to these areas increases the costs. Technology allows us to offer distance learning opportunities as an alternative to in-person training.

Technology Solution
Distance learning is the best way for WESST to provide specialized training services to all rural areas in New Mexico. We are able to aggregate clients across the state instead of across a small region, which dramatically reduces the time and expense of travel. As an added benefit, the trainings are recorded and available online so clients can access the training when and where they desire. This has increased the attractiveness of training for our clients and reduced the costs even further for WESST.

Distance Learning Approach
Our approach to distance learning still relies heavily on the face-to-face meetings that traditionally have been important in developing and maintaining relationships with our clients. Instead of using extensive staff time to travel to remote locations to provide training and consulting services to small numbers of people, staff members now travel with the more attainable goal of briefly meeting with large numbers of potential and existing clients.

A typical scenario in our new distance model would be to make contact with a potential client through networking at a rural community event, or through a local partner. The new client’s initial participation would be through a recorded distance learning program downloaded from our website. As a follow-up to the online training, the client would take part in a group webinar or conference call hosted by our staff and community trainers. This model allows for maximum client benefits at an extremely low cost of delivery. When appropriate, the client can always access dedicated consulting services for an additional fee.

Distance Learning ChallengesDistance learning is not without its challenges. Using the latest and greatest technology for training only works if our clients and potential clients have access to it. Many rural areas of the state are still without reliable Internet services and we continue to see low levels of computer ownership among many in our target audience. To overcome these challenges WESST will build upon the tremendous ongoing advancements in wireless communication technology and media-enable hand-held devices as we move forward with our distance learning programs.

Our belief is that wireless multi-function devices such as the Apple iPhone, which have the ability to wirelessly download, store and playback audio and video, will offer the best opportunity to effectively expand services to a large group of currently underserved rural clients in the coming years.


Technology with a Personal Touch
For now, serving rural clients means being able to provide business training and technical assistance by multiple means, including teleconferences, online training, DVDs, audio CDs, and audio and video downloads in addition to good, old fashioned face-to-face meetings. We are also proving audio training programs using the latest generation of low cost MP3 players. We are building our programs today in a manner which will allow us to develop and expand in the direction technology is headed in terms of functionality, market penetration, and price. Along with existing and new technology, we must also maintain the personal touch that has made WESST so successful. Technology should enhance these face-to-face meetings and pave the way to provide our clients with more efficient and effective services to make their business dreams a reality.

Wally Drangmeister is director of client services at WESST. He is a native New Mexican with a broad background in business and entrepreneurial ventures. Wally has experience with technology start-up businesses, venture capital investing, and strategic and financial planning. He has worked for companies in extractive industries, water, natural gas, electric utilities and financial services. Wally has a Bachelor of Accountancy Degree from New Mexico State University, although he refers to himself as a recovering CPA.

Monday, March 23, 2009

Exchange Weekly Microbusiness News Roundup

Every week AEO gathers small business headlines and links from online media publications and blogs. Here’s what was in the news the week of March 16th

AEO IN THE NEWS

SMALL BUSINESS NEWS

Thursday, March 12, 2009

Exchange Weekly Microbusiness News Roundup

Every week AEO gathers small business headlines and links from online media publications and blogs. Here’s what was in the news the week of March 9th.

AEO IN THE NEWS

SMALL BUSINESS NEWS

POLICY UPDATE - Federal Microenterprise Development Programs Get a Big Boost in 2009


The Fiscal Year 2009 omnibus appropriations package was passed by Congress this week – and for the microenterprise development field it was worth the wait! Here’s the run down for FY 2009 federal microenterprise development program funding.

SBA Microloan Program
Funding for the SBA Microloan Program is appropriated in two parts – lending dollars and funding for business training and technical assistance. In FY 2009 Congress authorized $21 million in lending for the program – a $1 million increase from last year. The technical assistance portion of the program received and additional $5 million from last year authorizing $20 million to support the business training needs of low-income entrepreneurs.

In FY 2008 the SBA Microloan program made a total of 2682 loans to 992 startups and 1690 existing businesses, which helped create 3889 jobs and retain an additional 5856. The increased funding will only help the microenterprise development field expand its reach and help more entrepreneurs which is particularly important in these troubled economic times.

SBA PRIME
The microenterprise development field once again saved the Program for Investment in Microenterprise (PRIME) from elimination. For the past eight years President Bush has requested zero dollars for the program, which funds much needed business training and technical assistance to very low-income entrepreneurs. Recognizing the need for training dollars, Congress authorized $5 million for PRIME in 2009 – up $2 million from the previous year.

SBA Women’s Business Centers
The SBA Women’s Business Centers will receive $13.75 million in 2009
, an increase of $750,000 from 2008. This highly successful program provides entrepreneurial training to over 150,000 business owners annually and has maintained a 14 to 1 return on the federal funds invested.

Community Development Financial Institution (CDFI) Fund
In 2009 the CDFI Fund will receive an increase of $13 million. Congress provided $107 million for the program which provides economic development and low-cost financial services in underserved communities. On average, each dollar invested in the CDFI Fund leverages $19 for housing and microbusiness loans, community development banks, and other economic development efforts.

The appropriations package also includes funding for the following programs of interest to the microenterprise development field:


  • Community Development Block Grants (Dept. of Housing): $3.9 billion

  • Rural Business Opportunity Grants (USDA): $2.5 million

  • Rural Business Enterprise Grants (USDA): $38.7 million

  • Intermediary Relending Program (USDA): $33.5 million

  • Rural Community Development Initiative (USDA): $6.3 million

Have a question about the FY 2009 omnibus appropriations package? Leave your question as a comment and AEO will respond for all to see. Want to share your thoughts on the FY 2009 funding levels? Leave a comment and spark a discussion!

Friday, February 27, 2009

Exchange Microbusiness News Weekly Roundup

Every week AEO gathers small business headlines and links from online media publications and blogs. Here’s what was in the news the week of February 23rd.

AEO IN THE NEWS
How to Get a Small Business Loan if You're a Credit Risk
http://www.ehow.com/how_4806913_business-loan-youre-credit-risk.html

AEO MEMBERS IN THE NEWS
Second Regional Flavor Conference planned for March 12
http://www.observertoday.com/page/content.detail/id/519563.html?nav=5007

SMALL BUSINESS NEWS
Open for Business, Despite the tough economy, SJ entrepreneurs take the risk and set up shop.
http://www.sjmagazine.net/articles.aspx?aid=507&AspxAutoDetectCookieSupport=1

Small Business Owners React to President Obama's Speech
http://ozarksfirst.com/content/fulltext/?cid=122802

Business Owners Say Obama Should Reduce Small Business Taxes and Free Up Lending
http://www.foxbusiness.com/story/markets/industries/media/business-owners-say-obama-reduce-small-business-taxes-free-lending/

Survey: Small-business owners resilient
http://www.bizjournals.com/southflorida/stories/2009/02/23/daily23.html

Small Business: Starting a blog and making it effective
http://www.newsday.com/business/ny-bzherz0223,0,5485247.story

Manchin: Small business success vital to state
http://www.bdtonline.com/local/local_story_053203359.html

Small loans to keep troubled firms afloat
http://www.msnbc.msn.com/id/29343657/

Small business: By a thread
http://www.startribune.com/business/39992472.html

Small business feels the pinch of tighter credit
http://seattletimes.nwsource.com/html/businesstechnology/2008771277_bizfinance22.html

Board Eases Application For Business Licenses
http://www.washingtonpost.com/wp-dyn/content/article/2009/02/21/AR2009022100055.html

Being own boss gains appeal, Some ready to start small business
http://cjonline.com/stories/022109/bus_396302114.shtml

The recession beaters: Three women small-business owners succeeding in today's economy
http://www.philly.com/dailynews/top_story/20090219_The_recession_beaters__Three_women_small-business_owners_succeeding_in_today_s_economy.html

Wednesday, February 25, 2009

AEO National Membership Call

AEO’s most recent National Membership Call focused on microenterprise development funds in the Economic Recovery and Reinvestment Act and how the new funding impacts AEO’s policy initiatives in 2009. Below are the notes from the call.
Association for Enterprise Opportunity
National Membership Call
February 24, 2009 ~ 2:00 p.m. Eastern Time

I.Introduction: Elizabeth Wilson, AEO senior development officer field services acknowledged and thanked presenters: Bill Zavarello, AEO policy consultantGeorge Dale, Small Business AdministrationJon Bailey, Center for Rural AffairsMathew Josephs, CDFI Fund



II. AEO Overview: Bill Zavarello reported that the last administration had decided it was no longer useful to assist microenterprise development programs. This put microenterprise development into a very defensive position. We struggled and worked with Congress to restore money to some extent. Toward the end of each cycle, the program was saved and/or restored but the money was never as much as was needed. Zavarello said that in reality we were only given scraps to exist on. He continued to say that now it is important to stop and recognize that all the arguments made over the last six to eight years have a created a paradigm shift and we have essentially won the argument and tipped the scales in our favor. It is still very important that we prove we can create jobs and continue to show that an investment in microenterprise is highly valuable.

Question: Will there be money available outside of lending? Zavarello replied that the short answer to this is ‘no.’

He noted that AEO will be advocating for full funding from training and technical assistance under PRIME. This process has not started yet for 2009. Full funding is a top priority for AEO and Zavarello encouraged participants to stay tuned for news from AEO as to how to best advocate as members during this initiative.

III.SBA Microloan Overview: George Dale began by noting that timing is everything and that currently the provisions are for items other than microenterprise. There are technical assistance grants and loans available for microenterprise provisions. There isn’t currently a budget although one may be passed next week. He noted that performance numbers and outcomes will be expected. With respect to the use of the technical assistance funds, you are authorized to use funds toward training sessions.

The price of money is extremely attractive currently. However, we need to think carefully about implementing this process. The intention is to continue with the procedures already in place. In terms of implementation it is important to figure out if this is a stimulus matter or a 2009 budget matter.

If you have any suggestions please send a detailed email to George - george.dale@sba.gov.

Dale also mentioned that there will be two training opportunities – in Tampa there is the PRIME conference and there is also the AEO Summit in May.


IV.Rural Microenterprise Overview: Jon Bailey noted that they were unable to receive rural assistance under the economic stimulus package, but he hopes that the annual appropriations process may provide additional resources. There are extra funds within the CBDG and USDA programs but it is important to check the criteria for each individual state.

Question: What should be done to build support for rural efforts? Members of Congress are always important contacts in this matter. Any member of Congress who is a member of House/Senate Agriculture Committees is a good target for discussions regarding the Farm Bill microenterprise development funding. There may also be support from the USDA to raise this funding.

V.CDFI Fund Overview: Mathew Josephs noted that once an organization is certified as a CDFI it is eligible for several types of funding. Funding may require a funding match from your organization. Grants of up to $100,000 are also available for training, consulting, etc. Banks may also receive incentives for investing in small microenterprises or low-income community development. The 2009 round closed in October but additional funding opportunities may be announced next week.

Questions: Is there a time table for the stimulus money? Next week there should be more news so please stay tuned.
Is there enough to fund all the current applications? Tentatively, yes, but they depend on the match requirement.
How quickly will the funds be dispersed? This depends on when the groups applied.
How will you handle the dispersements of stimulus funds? TBD

VI. Conclusion and Next Steps: Elizabeth Wilson noted that if you have additional questions, please email them to Elizabeth so that she can follow up after the call. Please note that you can access policy updates on AEO’s blog at
www.aeoexchange.blogspot.com.

Zavarello noted that it is important to keep in mind that the budget cycle will remain the same as it has always been. We have the advantage this year of knowing that the political terrain is more favorable for us this year. We can therefore expect to see better results if we can also continue to grow and show our positive results. He added that as long as we continue to do our job, the people in power will do theirs.

Josephs suggested that all groups who are eligible apply. It is critical to get your organization certified as a CDFI and to make sure you remain aware of the opportunities available to your organizations.

Dale reminded the group that the 2009 funds and the stimulus funds cross paths so it is important to keep in mind that 2009 should be used in conjunction with or before the stimulus funds. Also, be cautious not to make bad loans or to loan money too quickly. Because banks do not want to make loans right now, so if you come across the opportunity to make a good loan, please do so.

Bailey noted that all the rules on the stimulus money are yet to come out. Unlike the SBA program, their funds have to go to a public entity. He also seconded what Zavarello said in that it is important over the next few months to speak with your members of Congress regarding rural funding.

Elizabeth thanked each of the panelists for their input and reminded everyone that this discussion can be continued at AEO’s National Summit this year. Please visit
http://www.microenterpriseworks.org/index.asp?bid=2764 for more information about this opportunity and please check in at AEO’s blog for continuing policy updates.

Thursday, February 19, 2009

Exchange Microbusiness News Weekly Roundup

Every week AEO will gather small business headlines and links from online media publications and blogs. Here’s what was in the news the week of February 16.

AEO IN THE NEWS

Recession ups U.S. demand for microloans
http://www.msnbc.msn.com/id/29258701/

As Credit Dries Up, More Owners Seek Microloans
http://news.yahoo.com/s/bw/20090216/bs_bw/0962s0902018039571

In Credit Crunch, People Turn to Payday Loans, Microloans
http://personalmoneystore.com/moneyblog/2009/02/16/credit-crunch-payday-loans-microloans/

Microfinance in the U.S.A. about to explode?
http://www.walletpop.com/blog/2009/02/17/microfinance-in-the-u-s-a-about-to-explode/



SMALL BUSINESS NEWS

Bill Clinton: Stimulus Package Should Do More for Small Business
http://blogs.wsj.com/independentstreet/2009/02/17/bill-clinton-stimulus-package-should-do-more-for-small-business/

Smaller lenders see opportunities in SBA loan programs
http://www.azcentral.com/arizonarepublic/business/articles/2009/02/16/20090216stim-biz-SBAstimulus.html


Small Businesses Face More Fraud in Downturn
http://online.wsj.com/article/SB123501158460619143.html?mod=googlenews_wsj

SBA Applauds Stimulus Bill, Planning Underway For Broadest, Quickest Small Business Impact
http://www.utahpulse.com/featured_article/sba-applauds-stimulus-bill-planning-underway-for-broadest-quickest-small-business-i

Stimulus Act - A Small Impact on Small Business Owners and Even Smaller for Women in Business
http://womeninbusiness.about.com/b/2009/02/18/stimulus-act-a-small-impact-on-small-business-owners-and-even-smaller-for-women-in-business.htm

Green incentives add millions to small business loan program
http://www.jaxdailyrecord.com/showstory.php?Story_id=51845

Tuesday, February 17, 2009

Congress Passes the Economic Stimulus Package - What's in it for Microenterprise

In its first major initiative, the Obama Administration is expected to sign the Economic Recovery and Reinvestment Act of 2009, which was passed by Congress late last week. This bill is exceedingly broad in its scope and can be expected to impact communities around the country in many ways in the months and years ahead. There are a few specific programs to highlight from this legislation which have been particularly important to AEO and its members.

Comprised of spending and tax cuts the bill has two main goals; short term job production and long term economic viability. Since microenterprises are a major source of U.S. employment it is only fitting that funding for microenterprise development was included. The bill includes:




  • $51 million in lending authority for the Small Business Administration (SBA) Microloan Program


  • $24 million for SBA Microloan technical assistance


  • $100 million for the Community Development Financial Institutions Fund


This is one-time only funding and is in addition to the regular funding provided by Congress during the annual appropriations process. This is great news for the field, especially as AEO members continue to experience a higher demand for microloans and other business support services

Details about how AEO members can access the new funding and what affect this will have on AEO’s funding requests for Fiscal Year 2010 will be made available soon. Stay tuned!

Want to share your thoughts about the funding for microenterprise development in the Economic Recovery and Reinvestment Act? Leave a comment for the AEO Exchange Blog – be the first to start a discussion!



Tuesday, February 3, 2009

Exploring Microenterprise Tax Incentives Guest Blogger Gene Severens


Last week AEO sent a link to a recent article posted on Forbes.com, which discusses the small business tax incentives (or lack there of) in President Obama’s stimulus proposal. We invited AEO members and friends to share their thoughts and Gene Severens of CFED shared the following. AEO invites you to continue the conversation and include your own comments – click on “comments” below to see what others are saying or to add a comment yourself.



Thanks for the invitation to inform AEO membership about how tax incentives impact our microenterprise customers, and thanks for circulating the link to the
Forbes article – it was quite provocative. Microenterprise tax policy and practices are important and largely unexplored issues, and the Forbes article demonstrates how misleading the subject can get.

By way of background, I direct CFED’s Self-Employment Tax Initiative (SETI), which was launched in 2005. SETI explores: (1) how the tax code could be used to develop new policies that would support start up microenterprises; and (2) how tax preparation and the “tax season” can be used as an annual marketing opportunity to deliver financial products to a wider range of microenterprises. For the current tax season, SETI is working with 16 local programs (through $10-25,000 subgrants) that will provide tax preparation to approximately 7,500 microenterprises by April 15, 2009.

The Forbes article, like many articles assessing small business tax reform, only tells half the story - the corporate side (including Subchapter S) of small business taxation. But because most microbusinesses are started, by default, as self-employed “sole proprietors” not corporations, they are taxed through individual tax laws. As a result, to understand the impact of tax policies on micro and early-stage small businesses, the microenterprise development field needs to focus on individual tax laws and its “Schedule C” tax form used to calculate self-employment net profit.

The Forbes article complains that the stimulus bill does not consider small business tax credits like “a zero rate on capital gains from investments in new small businesses” or “payroll tax holiday for employers.” No doubt these particular tax credits could be useful to some small businesses, but they are, for the most part, irrelevant to most microbusinesses - especially start ups during their first few years of business and businesses that start with no employees.

What the Forbes article does not mention at all – the missing “other half” of the story – is any mention of the stimulus package’s “Making Work Pay” tax credit ($1000 if filing jointly, $500 single). While our analysis is just beginning and could change, we believe that the “Making Work Pay” tax credit applies to microenterprises and provides an important new kind of opportunity to AEO members to reach more customers with new tax code-based financial products.

By our first calculation, the “Making Work Pay” tax credit would allow approximately 10.8 million self-employed households with net profits from microbusiness to claim either a $500 or $1000 tax credit. While this credit can also be claimed using wage income, for those households whose income is substantially derived from microbusiness income, “Making Work Pay” will function like a “microenterprise tax credit.”

In the deepening recession and spurred both by struggling low-income households as well as talented, laid-off workers, we expect that “self-help jobs” will become increasing important, making this credit all the more significant as a counter-cyclical stimulus. For lower-income households, which run “informal” businesses that do not report self-employment income, the “Making Work Pay” tax credit can combine with the EITC to provide a $5000+ refundable tax bonus to formalize their business.

This is not a small program. By our initial calculation, the value of the new tax credit for self-employed households is something like $8 billion. That’s “billion” with a “b,” making this tax credit one of the largest federal “microenterprise” programs ever.

We have much to learn about how the tax code impacts microbusinesses and would invite comments from AEO members. Because of the peculiarities of microenterprise tax policies, many new microenterprises will not realize their eligibility for this tax credit until next year’s tax season (Jan - April 2010). As a result, I can imagine a big role for AEO and its members to educate the 10 million households about this important help. SETI staff will continue to refine our understanding of the microenterprise tax policies in general and the Obama stimulus package, in particular, and post our work at
www.cfed.org/go/seti. Comments and criticism can be sent to us at seti@cfed.org or feel free to email me directly at eseverens@cfed.org.

Thanks.
Gene Severens


Eugene Severens founded the Rural Enterprise Assistance Project (REAP), a microlending and training program serving rural Nebraska in 1989. He went on to start the Nebraska Microenterprise Partnership Fund, a successful statewide microenterprise intermediary and CDFI which supports microenterprise programs in Nebraska. He is currently Director of CFED's National Fund for Enterprise Development, where he works on the State Microenterprise Systems project and directs CFED's Self-employment Tax Initiative (SETI), a project which explores how the tax code is and potentially could be used as an important new direct delivery systems for microbusinesses. SETI recently (Fall 2006) disbursed a series of mini-grants to work with community tax preparation and microenterprise programs to explore the potential of tax preparation and planning as an important new product for the field. Gene was also a member of the very first AEO Board of Directors.

Tuesday, January 27, 2009

A Letter to the President

If we had President Obama’s ear, here’s what we’d say.


Dear Mr. President,

The Association for Enterprise Opportunity (AEO) applauds your promise to create three million new jobs as part of your
American Recovery and Reinvestment Plan. More importantly we want to help and we know how.

For nearly two decades AEO and its member organizations have been helping to create thousands of new jobs each year by supporting Main Street businesses. AEO members – non-profit microenterprise development programs – help new entrepreneurs identify strategies, opportunities, innovative ideas, and solutions for business success. From business plan development to new marketing concepts and microfinance services, AEO members exist to help entrepreneurs succeed.

Investment in microenterprise development is an excellent strategy to help create jobs and rebuild our economy. Defined as a business with five or less employees, microenterprises are a major source of employment for rural areas, urban neighborhoods and everywhere in between. On average, microenterprises create nearly one million new jobs per year and represent 18% of all private employment according to AEO, the national association for microenterprise development programs.

As unemployment rates sky rocket, AEO predicts that there will be an increased demand for microenterprise development services. A good percentage of the unemployed will turn a hobby, skill, or talent into a new business. AEO members can help them seize business success and create jobs for themselves and others. From business plan development to technology training and access to non traditional sources of credit – AEO members have the resources and know-how to get businesses up and running.

There is a lot of talk right now in Washington, DC about helping small businesses, in particular Main Street businesses. The discussion seems to revolve solely around tax cuts, but AEO would argue that tax cuts are not enough to stimulate job creation from microenterprises. If the government is serious about creating jobs on Main Street, investment in microenterprise development should be a top priority.

AEO suggests a three step approach.

Step 1: Designate $1 billion in capital to microbusinesses and get credit flowing on Main Street America.
Reinvest in what works by increasing the dollars available to:

  • Community Development Financial Institutions (CDFI) Fund
  • The Small Business Administration (SBA) Microloan Program
  • PRIME (Program for Investment in Microentrepreneurs) program and allow all states to compete for these funds
  • Women’s Business Centers
  • The USDA’s Rural Microenterprise Assistance Program (RMAP)
  • Create the American Dream Fund - a national revolving loan pool, with a singular mission to provide needed capital and investment to microbusinesses in every state.

Step 2: Invest in the infrastructure of the microenterprise development industry.

  • Establish an Office of Microenterprise Development within the federal government to harness the energy of microenterprise and its power to innovate and percolate up the economy, understand its impact, trends, and create effective policies that will benefit millions of individuals, their families, and their communities
  • Provide core funding to the microenterprise development industry
  • Reinstitute the Presidential Microenterprise National Awards to recognize the tremendous economic impact of microenterprises.

Step 3: Direct capital into our communities and support communities in need.

  • Create a fund for business incubators that will be supported by microenterprise development organizations providing entrepreneurs with space to access resources, networking, and technology to successfully launch new businesses.
  • Entrepreneurship is a viable opportunity for returning veterans, particularly those who return with disabilities.
  • Funding to provide business skills training and access to capital will help the microenterprise development field meet the unique needs of veterans and their families looking to start new businesses
  • Tap into the ingenuity and creativity of America’s youth and provide annual fellowships to youth social entrepreneurs who are working to bring solutions to local and global problems. The fellowships will provide these budding entrepreneurs with the skills they need to be successful business owners.

Tax cuts and tax incentives for small business are also important, but an honest investment like the one we suggest would show a true commitment to US entrepreneurs. Small businesses need our help now more than ever and the microenterprise development field is hoping for your support.


Sincerely,

The Association for Enterprise Opportunity