AEO and D&B Expert Panel At DNC Details Capital Access Challenges Faced By Small And Microbusinesses
Association for Enterprise Opportunity (AEO) Outlines 2016 Policy Agenda
PHILADELPHIA, July 27, 2016 /PRNewswire-USNewswire/ -- A panel during the Democratic National Convention sponsored by the Association for Enterprise Opportunity (AEO) and Dun & Bradstreet (D&B) today outlined access to capital challenges faced by many Main Street businesses owners. AEO, a trade association for U.S. microfinance and microbusiness, also unveiled an agenda urging policymakers to help entrepreneurs start, sustain, and grow their businesses.
The panel, "The State of Microbusiness and Microfinance in the US: Investment, Innovation and Inclusion," featured Jonathan Snyder, Director of Business Financial Resources for Philadelphia's Department of Commerce; and Alyssa Thomas, manager of Kiva Philadelphia, a lending platform for business owners to get the financing they need to grow and create jobs. A third panelist, Latasha Sampson, talked about the challenges she has overcome as owner of Chocolate City Hair Studio and Day Spa.
"Small and microbusinesses face many challenges on their path to profitability, but access to capital should not be one of them," Mr. Snyder told the brunch gathering at the Hotel Monaco. "The Department of Commerce's newest initiative, the Capital Consortium, connects microbusinesses directly to lenders in order to help them open, thrive, and expand."
Ms. Thomas explained the importance of the Kiva program, noting its innovative model for channeling capital to small businesses.
"Kiva is challenging the traditional lender model and creating real opportunities for microbusinesses," she said. "Instead of being dictated strictly by financials, Kiva considers the character of the business owner and support of the community to determine creditworthiness. This accessible, non-traditional model has given 90 microbusinesses in Philadelphia access to much-needed capital since the program began in 2014."
AEO President and CEO Connie Evans, who moderated the panel, said there is a "market failure" in business lending, with the Treasury Department acknowledging that 8,000 business loan requests are declined each work day by financial institutions. Across the country, she noted that there are 11.2 million small businesses in low-wealth communities, with 2.2 million of them actively seeking capital. Ms. Evans said the success of these businesses is critical because their hiring can spur a ripple effect of economic growth.
"It is really critical that we recognize the significant contributions of our small business owners and entrepreneurs—women and men who are fueling the engines of our economy with their hard work," Ms. Evans said. "We can support them by harnessing technology innovations that provide a better way for even the smallest businesses to do everything from access capital to manage their books. Getting innovations in the hands of Main Street and community businesses should be our priority."
Judy Hackett, Chief Marketing Officer, Emerging Businesses, Dun & Bradstreet, said, "It's imperative that small and micro businesses have the opportunity to grow and thrive, spurring job creation and fueling our economy."
"Our event today highlighted programs that can be the catalysts for this kind of opportunity," Ms. Hackett said. "The partnership between Kiva and the City of Philadelphia is already stimulating growth in this City, and can be replicated for similar strong results across the country." She added that AEO's policy platform "highlights policies that will help ensure access to capital for the smallest businesses. Dun & Bradstreet is proud to create a showcase for these programs and policies and looks forward to continuing to help support entrepreneurs growing their businesses."
The AEO policy agenda included:
- Pathways to Alternative Capital - borrowers need to be aware of options for business loans that exist outside traditional banks. Connecting entrepreneurs to these organizations – particularly after loan applications are denied – is important to ensuring that appropriate sources of capital are fully utilized. Policymakers should support efforts like SBA's LINC tool and AEO's Tilt Forward Initiative by investing in partnerships that yield pathways to alternative capital.
- Prioritize Underserved Women & Minorities at the Treasury Department – Treasury's Community Development Financial Institutions (CDFI) Fund helps promote access to capital in urban and rural low-income communities by supporting mission-based lenders. Policymakers should create pools of funds within the CDFI Fund dedicated to underserved populations.
- Provide Adequate Funding for Federal Lending Programs - The use of federal lending programs is at an all-time high. The next Administration and Congress should ensure that funding levels are maintained or increased to keep up with growing demand. Policymakers should continue to invest in proven lending and counseling programs that support the needs across the continuum of entrepreneurs.
- Promote a Network of Trusted Guidance - A nationally coordinated program is needed to align resources and share information between organizations. Nonprofit organizations in underserved communities are in the best position to support the entrepreneurs in their neighborhoods. Policymakers should support efforts to redefine entrepreneurial training and to clarify goals, targets and metrics of business development services.
"The recommendations represent bold thinking," said former Cleveland Mayor Jane Campbell, an AEO Board member and Director, Washington Office, National Development Council. "Capital access challenges are especially acute in low-wealth communities, as well as among women and minorities anxious to launch and grow their businesses. Affecting change through the right policy levers can stimulate growth throughout the country."
Contact:
Michael K. Frisby
202-625-4328 [email protected]
SOURCE AEO
WANT YOUR COMPANY'S NEWS FEATURED ON PRNEWSWIRE.COM?
Newsrooms &
Influencers
Digital Media
Outlets
Journalists
Opted In
Share this article