CEO'S Letter

Running on Empty: If Small and Micro Businesses are the Economic Engine of our Economy, where is the Fuel?

If small and micro businesses are the economic engine or our economy, they should be the focus of stimulus dollars, especially in CA where the real unemployment rate is closer to 20% and where the recession has hit hardest, in the. Central Valley, LA and San Diego, for example..

Let’s look at the facts: there has been less than a trickle of stimulus dollars coming to our state:

• Last two rounds of CDFI dollars have brought less than $4 million for small business lending, and, surprisingly, none of it going to Southern CA.
• SBA PRIME just opened up funding to CA, awarding $750,000 to 9 nonprofits in CA, out of only $5 million nationally. That comes to an estimated 300 businesses benefiting @ $2500 spent per client.
• SBA Microlending capital and TA funding should triple the amount of loans – to 500 statewide. But the loan loss requirement may prevent MDOs from participating, given cutbacks in corporate and foundation grants along with increased loss rates due to recession.
• There is over $400 million in new Workforce Investment funding to the State. But it can’t support self employment training due to an arcane performance measure at DOL. An estimated 150,000 unemployed persons in CA could be successfully self employed if training and technical assistance were available.
• USDA is making $8 million available nationally for Rural Micro Enterprise development. If CA gets its fair share, that would be $1.5 million for rural lending and TA. If half that - $750K is reserved for loan capital, then we are looking at a total of 75 businesses at $10K each with an additional 225 clients getting training and TA – another drop in that “fuel tank”.

Furthermore, to make a bad situation worse, our State leaders raided the Small Business Loan guarantee Trust Fund, thus eliminating any remaining incentives for banks to lend to struggling Main Street businesses.

Because of this environment, CAMEO has focused our work on advocating for capital and funding for our members. We are pleased with the fact that our efforts to open up the PRIME program paid off, with California MDOs getting 15% of the funding. And we want to thank Bank of America for its first generous grant supporting our Rural Initiative, letting us increase MDO capacity and keep the heat on USDA and DOL in Washington DC and on the State HCD to increase funding for rural Micro Enterprise.

There are some encouraging signs of positive change:

• More banks are making investments in our members’ micro loan funds.
• Community foundations are beginning to look at supporting microfinance and MDOs in their regions.
• Some CAMEO members are experiencing exponential growth and collaborating with smaller MDOs to increase overall reach.
• New web-based platforms, such as Accion Texas, are available to increase the scale of microfinance in CA.
• Greater public consciousness of the role of microfinance in the US, which we expect to leverage to benefit CA.

Despite the gloom and doom, it has been gratifying to CAMEO’s Board and staff to see such high participation in all of our programs this year: the Annual Meeting, Legislative Day, the Rural Initiative, VIVA Symposium and CA-Self Employment Tax Initiative, plus training scholarships were all enthusiastically supported. Building the Micro Enterprise community is another way to fuel our local economies. CAMEO is committed to strengthening our constituency so that resources begin to flow to rev up entrepreneurship.

Thanks for all you do,

Claudia Viek
Chief Executive Officer — California Association for Micro Enterprise Opportunity, San Francisco

Client Success Story

Cammy La faced many challenges growing up in post-war Vietnam. Also, being part Chinese, she suffered ethnic discrimination, especially when Vietnam and China fought a bloody border war in 1979, driving tens of thousands of ethnic Chinese to flee out of the country.

Cammy decided to escape Vietnam in search of freedom and prosperity at a young age. Once safely in the U.S., Cammy learned English and studied business at San Francisco State University. She worked in information systems for several years, then in real estate, before discovering AnewAmerica and fully realizing her dream to start her own business. As a student in AnewAmerica’s Virtual Business Incubator—Assets for New Americans program, Cammy learned how to write her business plan. AnewAmerica helped connect her with investors and contacts that were instrumental in helping her launch her business.

“AnewAmerica is always there for me,” she says. “They empower women and they empower minorities.”

Cammy’s business, Vi Gallery, sells unique woodcarvings, silk scarves and other items imported from her native Vietnam, as well as decor made by local artisans. She first operated the Gallery out of her garage. Then, in 2006, she moved the store to San Francisco’s upscale Embarcadero Center. Last year the business grew profitable enough for her to hire an assistant.

“It’s a big blessing. My dream come true,” Cammy says gratefully of her gallery’s success.

Currently, Cammy is working with Anew America to market her wares on eBay, through the E-Store on WorldofGood.com by eBay. She’s also working with Anew America to take steps to green her business operations and become an AnewAmerica Certified Green Business.

For more information about Vi Gallery, click here

Member Program Highlight

The E-Store is AnewAmerica’s innovative program that brings the benefits and opportunities of e-commerce to low-income, new American entrepreneurs by empowering them with the technology skills and resources to succeed in online sales and strengthen their small businesses. With support from the California Consumer Protection Foundation, 10 entrepreneurs who completed our Business Training Course have received advanced technology training in ecommerce, 1-on-1 assistance to launch their online storefronts, and direct access to a premier online marketplace that reaches millions of consumers across the globe, Worldofgood.com by eBay. AnewAmerica will soon expand the program to include 20 more entrepreneurs.

All E-Store participants receive a series of advanced technology trainings, photography and copywriting assistance from professional volunteers, and access to e-commerce customer service and marketing tools.

WorldofGood.com is the world’s first online marketplace to convene thousands of People Positive and Eco Positive sellers and products all in one place, empowering the public to shop in ways that align with their personal values. WorldofGood.com provides an established electronic venue with substantive client base where AnewAmerica entrepreneurs with socially and environmentally responsible products will make immediate sales and gain exposure to online business and marketing. As a Trust Provider on worldofgood.com, AnewAmerica verifies vendors as socially and environmentally responsible businesses.

To read more about AnewAmerica on worldofgood.com:Click here

To see our E-Store businesses:Click here

AnewAmerica’s website: www.anewamerica.org

CAMEO Annual Member Survey

A big thank you to all CAMEO Members that filled out our annual survey. This data is important in assisting our capacity building efforts, and to advocate for support of the Micro Enterprise (MDO) sector in California. Below are some of the highlights from the survey.

• The number of businesses served increased by 20% over 2007 – from 20,000 to 24,000.
• The number of jobs created by client businesses increased 58%, from 9,000 in 2007 to 14,200 in 2008.
• Services to Latinos: Latinos represent 36% of client base overall.
• 29 MDO's serving most rural regions in State; reporting
  services to 4200 clients in 2008. Rural micro enterprises represent 18% of all clients served by CAMEO members.

We got a 68% response rate but a stronger response rate will validate the data even more. We hope you will take part in next years survey. To view the full report, click here.  

Policy Updates

State Tax Credit for Small Businesses (20 or fewer employees): CAMEO successfully advocated for a new state tax credit as part of the mid-year budget negotiations which allows business owners to deduct up to $3,000 for new employees. This credit may be claimed for up to 7 years or until the $400 million is exhausted. For more details please visit www.ftb.ca.gov

SBA-PRIME: CAMEO and our members successfully lobbied for both an increased appropriation and the broadening of eligibility to include MDO's in all states in the SBA-PRIME program which is an important source of funding for training and TA. Nine California programs received 15% of awards made- $750,000 out of $5 million. Now we need to work even harder to further increase this real source of economic stimulus for our communities!

USDA Rural Microentrepreneur Assistance Program will award $8 million in loan funds, TA and capacity building grants in 2010, and is slated to increase to by another $5 million through the federal budget process, totaling $13 million in awards in 2010. Again, CAMEO, our Rural Initiative members and Townsend Public Affairs worked hard to make the case. Public comments are currently being sought on the draft grant guidelines. Please visit the following website for details on the draft and how to submit your comments. www.rurdev.usda.gov

State Housing & Community Development: In November CAMEO will convene a special meeting with members, rural legislative leaders and executives within the State HCD to look at systemic changes needed to expand funding for Micro Enterprise development in the non-entitlement rural and small cities. CAMEO will present proposals created by our Rural Initiative members who have long been frustrated by HCD’s handling of this critical funding resource.

Workforce Investment: CAMEO has taken the lead nationally to obtain a policy change in DOL performance measures that would effectively open up funding for self employment training and TA. Thanks to Senator Barbara Boxer’s staff in DC for their support. Stay tuned for developments!

Member Program Updates

Training and ongoing capacity building is an integral part of CAMEO’s mission. Individualized training opportunities for the remainder of 2009 have been published. Members, this is one of the most valuable benefits to your membership, please don’t hesitate to take advantage of this great program! Click here for the scholarship application.

CA-SETI

CAMEO will be entering the 3rd year of a three year demonstration project. This is a great opportunity for organizations to increase their marketing outreach to target populations. Please contact senglish@microbiz.org if you would like to be involved! Generous support from H&R Block, Citi, and CFED make this innovative program possible.

VIVA Las Micro Empresas!

Many thanks to the Latino Business Chamber of Greater Los Angeles for co-hosting a very successful one day symposium in Los Angeles entitled “Harnessing the Power of Latino Entrepreneurs”. Maria Conteras Sweet, CEO of Promerica Bank kicked off the event as our keynote speaker, and Bob Gnaizda from Greenlining Institute closed the event with a strong call to action to advocate for policy changes at the local, state, and national level. Thank you Maria and Bob for your inspirational speeches! In between, we were treated to a wealth of information and high level knowledge from our members who served as panelists and facilitators. Special thanks to Liz de Renzy (WISE), Cynthia Amador (CHARO), Roberto Barragan (VEDC), Bob Holguin (LBCGLA), and Eduardo Figueroa (Hispanic Business Consultants) for their panel participation. Of course, we thank our funders, Comerica Bank and Citi for making the event possible.

If you are an individual or organization serving Hispanic clients, please reach out to participate in this program. We are presently putting together program ideas for 2010 and we welcome your input and support!

Upcoming Training and Member Events

10/29/09 – RURAL Training Seminar with Kathy Moxon

11/3/09 – Bay Area Member Luncheon

11/4/09 – CDBG / HCD Meeting in Sacramento

11/11/09 – Train the Trainer Informational Meeting (tentative)

11/13/09 – Fresno Area Member Luncheon

11/18/09 – Webinar Training: Credit Builder Alliance

12/9/09 – Los Angeles Area Member Luncheon

12/14/09 – Train the Trainer Webinar (tentative)

Rural Initiative Update

CAMEO's Rural Initiative is moving forward on many fronts reflecting the input from our members.

• We have launched the Rural Network: a not-quite-monthly forum for our rural members to discuss issues, connect with each other and learn about cutting edge programs. So far, we have heard from Humboldt County's IDEO program and The Enterprise Fund's Greenstone Project. On Oct. 29th we plan to have our third Network meeting focusing on regional collaboration strategies. Please join us!
• CAMEO is developing ideas for helping our rural members use CDBG funds for microenterprise development. We are working with HCD to make these funds accessible for quality rural economic development.
• The regulations for the Rural Microenterprise Assistance Program (RMAP) from the 2008 Farm Bill are now out and CAMEO is crafting comments to help ensure access to these funds for our members.
• The Rural Initiative has a limited program in providing organizational development assistance to members. Our goal is to build capacity in our rural microenteprise programs.

Please call Susan Brown, our Rural Initiative consultant, with your questions or comments. 530-918-9045 e-mail at susan@susanrileybrown.com

Board Moves

At the July Member Meeting in Sacramento CA, CAMEO members voted in three new Board Members who will assume responsibilities in January 2010.

Karuna Jaggar, Women’s Initiative, Oakland.

Elizabeth Makee, Accion San Diego.

Namoch Sokhom, PACE, Los Angeles.

CAMEO staff would like to thank departing Board Members Cooke Sunoo (APISBP) and Julie Abrams (WISE) for their dedication, support, and thoughtful work over the last few years. We appreciate everything you do!

[forward-Forward this newsletter to a friend.]
[subscribe-Subscribe to this newsletter.]

Our mailing address is:
275 Fifth Street, Fourth Floor
San Francisco, CA 94103
(415) 348-6214
©2009 California Association for Micro Enterprise Opportunity. All rights reserved.