Microenterprise Opportunities and the BEED Initiative

1. Microenterprise Opportunities and the BEED Initiative Carrie Henderson – moderator

2. Microenterprise Development • Defined as a holistic approach, embracing poverty alleviation, human development and economic development strategies • Programs support people starting and growing small businesses through • Business & technology training • Technical assistance • Access to capital • Access to markets

3. What is the definition of Microenterprise? • A microenterprise is a business with fewer than five employees and small enough to require initial capital of $35,000 or less • There are an estimated 2 million micro entrepreneurs in America today (source AEO) • Common microenterprises include specialty foods, repair services, cleaning services, jewelry, arts and crafts gifts, clothing and textiles, computer technology, and child and adult care services

4. Why is there a need for microenterprise ? • Loss of “middle class” jobs • Downsizing and Outsourcing • Changes in the “safety net” • Growth in immigration • An aging population • Declining rural economies • Balancing work and families

5. Who does it help? • Anyone who has a passion to start or grow their own business • Some programs are tailored to help the needs of specific target groups (i.e. lower income families or refugees), while other programs serve a certain geography

6. IHCDA’s BEED Pilot Initiative Business Expansion and Entrepreneurship Development (BEED)

7. BEED Introduction Important facts to note • Funded by Community Services Block Grant (CSBG) Discretionary $$ • IHCDA is providing loan capitalization dollars, operating assistance and technical assistance • IHCDA has allowed many different loan program models

8. BEED Program Description • Assist and foster microenterprise development through helping to establish community Revolving Loan Funds (RLF) throughout the State of Indiana • Part of a community’s comprehensive poverty reduction strategy • The Community RLF provides loans to start up and existing businesses who are very small (5 employees or fewer including the owner) • The Community RLF also provides training and technical assistance to borrowers either directly or through partnerships

9. BEED Goals • To have a Statewide impact on microenterprise development • Create new jobs for low income individuals (200% poverty) • Help participants become more self sufficient and financially literate • Help to create new businesses • Help to grow existing businesses • Help to build assets (community and personal)

10. CSBG – BEED pilot funding source • Low income requirement • Prohibited use of funds include: Real estate and building purchases or related improvements, Refinancing of existing debt, religious worship, political activities

11. BEED pilot update • Grants totaling $700,000 to 9 Community Action Agencies to help capitalize their loan funds were funded in late 2010/early 2011 • 3 agencies grew their existing loan program • 6 agencies started a new loan program • BEED pilot covers 37 out of 92 counties in Indiana • Through June 30, 2011, there have been 18 loans made totaling $193,700 • The loans made are expected to create 17 new full time jobs

12. Panelists • Sherry Aden and Jose Hernandez from Community Action of Northern Indiana • Tom Hiatt representing Grameen Indianapolis • Linda Gilkerson from Indy’s Kitchen