Rural Matters

Redwood Valley

From the Association for Enterprise Opportunity (the trade association for domestic microenterprise development): On Wednesday, November 18, 2009 Connie Evans, president and CEO of the Association for Enterprise Opportunity (AEO) participated in President Obama’s Small Business Financing Forum, hosted by Treasury Secretary Timothy Geithner and Small Business Administrator Karen Mills held at the Treasury Department. The invitation-only Forum included Senator Mary Landrieu (D-LA), Representative Nydia Velazquez (D-NY), Secretary of Agriculture Tom Vilsack, Grady Hedgespeth, SBA Director of Financial Assistance, Gene Sperling, Counselor to the Treasury Secretary, small business owners from around the country including a borrower from a micro lending institution, CDFI leaders, and bankers.

The purpose of the forum was to provide ideas to President Obama on what additional steps the Administration can take to improve access to capital to the small business community. Evans acknowledged the good relationship AEO has with both the SBA and the CDFI, and thanked both Administrator Mills and Secretary Geithner for their inclusion and attention to the smallest of businesses served by the microenterprise development community which includes both CDFIs and SBA Microloan intermediaries. Evans continued with these specific remarks when recognized from the floor:

“Our members are receiving ten times the number of bank referrals for loans per week as compared to before the economic crisis. They are spending more time providing technical assistance in making these loan applications viable. We ask that you allow technical assistance funds to be advanced to microloan intermediaries in the SBA Microloan program in order to have cash available to provide these critical services. We support the President’s recommendation to increase the individual microloan limit from $35,000 to $50,000 and suggest that it could be increased even further to $75,000 since banks are not lending to small businesses at this level. It is important to ensure that we are increasing capital to the intermediaries as they make larger loans and recommend that the loan limit to intermediaries be increased to $5 million. Lastly, we have heard from the panelist this morning how well guarantees work within all the other SBA loan programs to leverage bank capital. We need the SBA to apply that same guarantee component to the microloan program as an additional tool in getting needed capital to Main Street.”

Later in a breakout group with Secretary of Agriculture Tom Vilsack, Evans asked that the USDA look to restore the balance between the funding of technical assistance and funding for loan capital and stressed the need for greater technical assistance funding within the Rural Microenterprise Assistance Program. She asked the Secretary to ensure that caps are removed from technical assistance funding and allow the full legislated 25 percent of outstanding loan portfolio be the measure for applying technical assistance funding. The Secretary directed Victor Vasquez, Deputy Under Secretary of Policy and Planning to look into this issue. AEO will follow-up with Mr. Vasquez, who also informed Evans that it is still their goal to release the notice of funds for the Rural Microenterprise Assistance Program in December.

The proceedings of today’s forum will be compiled into a Conference Report, presented to President Obama and made available to the public on both the CDFI and the SBA website. The SBA website for the report will be: http://www.smallbusinessforum@sba.gov__ This is just one of recent indicators that the role of Main Street – small and microbusiness- is gaining some traction during this time of economic rebuilding.
See also Suddenly, America Digs Farming