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Responsible Small Business Lending ‘Week’ and Prospera

  • Responsible Business Lending Week
  • October is National Co-op Month (in addition to National Women’s Small Business Month)
  • The Goodies – This week’s highlight is to sign on to the CDFI Coalition’s CDFI appropriations letter to support the CDFIs in the FY16-17 budget. Deadline is October 31, 2016.

Responsible Business Lending Week

It’s not really an officially designated week, but might as well be, at least from where we sit with the introduction of the BBoR 2.0 and the SMART Box.

First, the coalition that brought you the Small Business Borrowers Bill of Rights (BBoR) has come up with BBoR 2.0 that incorporates the feedback that BBoR supporters have shared over the past year. You can read a draft of the BBoR 2.0 with new language highlighted in yellow and deleted provisions indicated with the strike-through marks.

Your comments on BBoR 2.0 can be submitted by email or via an online survey by November 18, 2016. Also, stay tuned for a webinar for a chance to ask questions. In December, after considering all submitted input, the BBoR 2.0 will be released.

We feel that this effort is important for the entire microbusiness community. Business assistance providers, you can weigh in as an endorser but even more important you should be letting your clients know about responsible lending. And microlenders, you can become a signatory and put these principles into practice. If an organization wants to become a signatory/endorser but something is standing in their way this would be a great way to communicate it.

Second, the Innovative Lending Platform Association (ILPA), a trade body comprised of Kabbage, CAN Capital and OnDeck, three of the country’s largest online lenders for small businesses, has launched a new tool by the name of SMART Box. (Not to be confused with the Marketplace Lending Association – which was founded by Lending Club, Prosper and Funding Circle.) SMART Box stands for Straightforward Metrics Around Rate and Total Cost and is a tool is designed to allow business owners to compare financing options. The tool is receiving mixed reviews:

On the pro side: “AEO believes the SMART Box could be a game-changer and we are proud to have served as the engagement facilitator for this initiative,” said Connie Evans, President and CEO.

On the con side: Fundera will not be adopting the SMART Box, stating that the current structure could lead to “information overload” for borrowers when attempting to compare multiple loan options. To be fair Fundera spokesperson does say it’s an improvement over the status quo. And the coalition that brought you the BBoR say, “While SMART Box is a positive step forward in promoting greater transparency for small businesses seeking financing, especially around the disclosure of APR and average monthly payment, the Responsible Business Lending Coalition (RBLC) believes it does not go far enough.”

As we mentioned last week, CAMEO is eager to follow up with interested state legislative staff members and our partners to ensure that small business owners have access to responsible lending products. We expect an active 2017!

October is National Co-op Month

October is National Co-op month in the U.S. From utility co-ops that provide everything from energy to the internet, to credit unions and community-owned grocery stores, cooperatives create a fairer, more democratic, and sustainable economy. CAMEO is proud to count among its members – Prospera.

Inequality and a lack of economic mobility define today’s economy, putting the American Dream out of reach for the vast majority of low-wage workers. This is particularly true for the many immigrants employed in the U.S. service sector, who, despite their determination and tenacity, often struggle to make ends meet. Prospera partners with low-income Latina women so they can achieve economic prosperity through cooperative business ownership. When women have ownership over their lives and work, they can transform their families and communities.

A Happy National Co-op Month and Happy National Women’s Small Business Month to Prospera and all the CAMEO members who empower women to become their own bosses.

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!

For Your Clients (and all trainers!): NerdWallet recently released a special report on the merchant cash advance industry and a new MCA educational portal.

For Your Clients: According to AB 2883, beginning January 1, 2017 all business workers’ compensation insurance policies, including in-force policies, will be required to cover, among others, certain officers and directors of private corporations and working members of partnerships and limited liability companies that may have been previously excluded from coverage. Insurance companies are required to identify and provide notice to each employer that may have employees that were previously excluded from coverage and are affected by the new law.

Take Action: The House and Senate leadership are working on the FY 2017 spending bills and plan to finish by November 15. The subcommittees have their allocations and staff are presently working to identify and negotiate differences in the House and Senate bills. The CDFI community must act quickly to engage appropriators to ensure the highest level of funding for the CDFI Fund programs. The CDFI Coalition is asking organizations to sign on to the CDFI appropriations letter and make your voice heard. The letter closes on Monday, October 31, 2016.

CAMEO Member in the News: Kathleen Minogue wrote “How Crowdfunding Opened Doors and Follow-On Funding for a Healthy Food Market” on the Locavesting blog. The article tells the story of a client that used rewards crowdfunding as a path to bankability.

For Your Clients: California Capital Hosts Hispanic Business Success Forum at La Familia Maple Neighborhood Center, 3301 37th Avenue in Sacramento, on Tuesday, November 1, 2016 from 5:30-8:30pm.

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.

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.