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Ms. CAMEO Goes to Sacto and New Online Lending Report

  • Ms. CAMEO Goes to Sacramento
  • New Online Lending Report
  • This week’s National Women’s Small Business Month bits: 1) Women Impacting Public Policy’s new report – Do Not Enter! Women Shut Out of U.S. Government’s Biggest Contracts and 2) Accion has a resource page for women business owners.
  • The Goodies – This week’s highlight is the Small Business Saturday Bootcamp on October 27 from 4:00-7:00pm at 100 Montgomery Street, Suite 1650 (16th floor) in San Francisco (for your clients).

Ms. CAMEO Goes to Sacramento

On Tuesday, the Assembly Committee on Jobs, Economic Development, and the Economy (JEDE) hosted CAMEO, Opportunity Fund, Small Business Majority, Funding Circle and the SBA for an informational workshop on what small businesses need to thrive. Our goal was to educate legislative and state agency staff on 1) small business trends, including the growing numbers of self-employed using on-demand platforms; and 2) access to capital issues, including the pitfalls of alternative, online lending. Terry Norris, owner of Precision Labs in the Inland Empire, shared his story of how the high rates and indifference of online lenders caused him to lose a big customer.

We suggested policies the State should consider, such as increasing funding for SBDCs and WBCs, re-instating COIN and preserving the CalCap program. We were pleased with the synergies of our presenters and the full room – over 20 legislative offices were represented as well as several important agencies that work with small business, including Governor’s Office of Business and Economic Development (Go-Biz), Department of Business Oversight, and Treasury’s California Pollution Control Financing Authority. Big thanks to Toni Symonds and Matt Hurley of the JEDE Committee for their work and encouraging CAMEO’s initiative to create this event.

The highlights:

  • Claudia provided an overview of the landscape of small businesses in California, the five C’s they need for success (coaching, capital, connections to markets, climate i.e. policy, and culture). The State should continue and increase support for small business through the network of SBDCs and nonprofits that demonstrate big ROI for the small levels of funding.
  • Rhea Aguinaldo (Small Business Majority) explained how the landscape of capital options for small business has evolved from the decline in traditional bank lending to the rise of online lending.
  • Gwendy Brown (Opportunity Fund) presented results from their report – “Unaffordable and Unsustainable: The New Business Lending on Main Street.” The report analyzes data on the loans and cash advances being offered to small businesses by short-term, high-cost alternative lenders. Cliff notes on findings: 94% interest rates; average payment is 1.78x income.
  • Casey Gillece Gordon (Funding Circle) discussed the balance between innovation and protecting small business owners from predatory lending practices and what Funding Circle does to provide responsible lending products.
  • Joe McClure (US SBA) summed up the importance of educating small business owners about online lending and how districts can find information for their clients.

CAMEO is eager to follow up with the interested legislative staff members and our partners to ensure that small business owners have access to responsible lending products. We expect an active 2017!

Photo from l to r: Rhea Aguinaldo, Northern California Outreach Manager for Small Business Majority, Joe McClure, District Director of the U.S. Small Business Administration, Sacramento District Office, Gwendy Brown, Vice President, Research and Policy of Opportunity Fund, Heidi Pickman, Communications and Policy for CAMEO, Claudia Viek, CEO of CAMEO, Casey Gillece Gordon, Deputy General Counsel for Funding Circle, Terry Norris, CEO of Precision Labs Calibration, Toni Symonds, JEDE Staff Consultant.

New Online Lending Report

On a related note, PLEASE share this information with your clients!

NerdWallet recently released a special report on the merchant cash advance industry and a new MCA educational portal.

The report details:

  • How MCAs compare to other forms of business lending on interest rates. (MCA’s effective APR can top triple-digits – far higher than other small business financing).
  • While the MCAs officially prohibits multiple “stacking of loans, in practice the industry perpetuates this debt cycle.
  • Like payday loans, minority-owned businesses appear to be targets of this form of predatory lending.
  • How the brokers who sell MCAs earn large commissions but are not licensed, so “becoming a broker is as easy as imagining that you are one.”
  • Small business owners often don’t understand the terms of onerous repayment schedules, taking on more debt than they can afford.

The MCA educational portal include​s​:

  • Profiles of small business owners who ran into MCA debt trouble.
  • A breakdown of how MCAs work.
  • A look at Ondeck as a major player in online small-business lending.
  • A calculator to help small business owners determine the real cost of MCAs.

Merchant cash advances are the most controversial form of online small business lending, an industry that whoever wins the White House will be examining in 2017​ ​as the Consumer Finance Protection Bureau (CFPB) is expected to turn its attention to small business online lending. Frontrunner Hillary Clinton has pledged her administration would help small businesses “harness the potential of online lending platforms and work to safeguard against unfair and deceptive lending practices.” CFPB moves follow a May U.S. Treasury report calling for vigilance in this space and U.S. House subcommittee hearings in July.

And if you haven’t already, read and share Claudia's op-ed in American Banker –  How to Tame the Wild West of Marketplace Lending #microbiz #Fintech.

The Goodies

New opportunities for training, conference information, funding, scholarships, and other information that have crossed our desks since the last Must Know. I have posted a running tab of current Industry Goodies on the CAMEO website that lists items that were in past emails. Check it out to make sure you’re not missing anything, like grants whose deadlines are still alive!

Member Kudos: JPMorgan Chase is more than doubling the size of its global Small Business Forward program by committing $75 million over the next three years to support women, minority and veteran-owned small businesses. This includes a $1.9 million grant to the Association for Enterprise Opportunity (AEO)! Congrats to AEO and thanks to Chase for supporting the sector!

For Your Clients: Our colleagues at WIPP are hosting a Small Business Saturday Bootcamp on October 27 from 4:00-7:00pm at 100 Montgomery Street, Suite 1650 (16th floor) in San Francisco. Small business expert Rhonda Abrams who will provide actionable tips for small businesses to rally and recruit customers, market their businesses, and help maximize the entire holiday shopping season.

Professional Development: CALED is partnering with the California Academy for Economic Development, Fresno State, and the University Business Center, to bring you the Introduction to Economic Development Certificate Program. Register for this certificate program that is designed as an introductory course for people who are generally interested in knowing more about how local economic development works, as well as for those people whose responsibilities include economic development assignments. The course runs from October 24-27, 2016 at Fresno State, Craig School of Business. Fees: $700 CALED Member Rate (you must be the listed CALED member) or $800 Non-Member Rate (includes a one-year membership in CALED).

For Your Clients: Small Business Majority hosts Access to Capital 101: Funding Options to Start and Grow Your Business every other Wednesday, the next ones are November 2 and 16. They present an overview of alternative lending options including community development financial institutions, SBA’s loan guarantee program and reputable online options, key questions to consider when seeking funding, the Small Business Borrowers’ Bill of Rights and helpful tools and resources.

Conference: Save the Date for the 6th Annual Asset Building SymposiumFostering Economic Equity in a Changing Bay Area on November 3, 2016.

Funding Opportunity: Communities are invited to apply for a new round of planning assistance from Local Foods, Local Places. The application deadline is 11:59 pm ET on November 6, 2016. Local Foods, Local Places helps communities create more livable neighborhoods by promoting local foods and is supported by a slew of federal agencies.

For Your Clients: La Cocina’s Food and Entrepreneurship Conference, presented by Whole Foods Market, will kick off on Sunday, November 13 with a full day of conversations, workshops and food with a focus on how small businesses can be activists for change in their communities. On Monday, November 14, we’ll be hosting guided walking tours (with plenty of eats!) to experience food entrepreneurship on the ground.

For Your Clients: AEO is partnering with the Federal Reserve System to survey existing and pre-start stage small business owners/managers. This survey is designed to better understand the credit landscape for small business and the experience of small business owners. As in prior years, the Federal Reserve System will release a national report of the survey findings. This year, they will also share custom data reports. They are seeking your help in distributing an important national survey of small business credit to your applicants and clients. The survey will be open now through November 23.

For Your Clients: The Equal Employment Opportunity Commission (EEOC) recently launched a resource center for small business owners. The site contains information on owners’ responsibilities under federal employment discrimination laws and responses to frequently asked questions. It also provides information on hiring decisions, training, and other workplace issues.

Entrepreneur Tracker: Join the seven CAMEO members who are using FIELD’s Entrepreneur Tracker. The tool offers a credible, affordable way to collect and understand outcomes achieved by small business and microbusiness clients. Such outcomes include: Business start and survival rates, jobs, changes in revenue, hourly wages paid to workers, and client movement out of poverty. To discuss pricing and learn more about EntrepreneurTracker, please contact Lavanya Mohan.

New Report: The SBA’s Office of Advocacy has a new report – The Arrival of the Immigrant Entrepreneur. Over the last 20 years, the role of immigrant entrepreneurs has grown. The percentage of the self-employed who were born abroad more than doubled between 1994 and 2015, growing from 8.6 percent to 19.5 percent. This report shows that the growth was caused by three changes — an increase in the size of the population born abroad, an increase in self-employment among those born abroad, and a decrease in self-employment overall.