Microenterprise Opportunities and the BEED Initiative Carrie Henderson – moderator

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

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

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

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

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

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

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

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)

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

BEED pilot update Grants totaling $700,000 to 9 Community Action Agencies to help capitalize their loan funds were funded in late 2010/early 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

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