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.