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Boxer-Feinstein PRIME support letter

Office of U.S. Senator Barbara Boxer
112 Hart Senate Office Building
Washington, D.C. 20510
phone (202) 224-3553
fax: 202-224-0454

Office of U.S. Senator Dianne Feinstein
331 Hart Senate Office Building
Washington, D.C. 20510
Phone: (202) 224-3841
Fax: (202) 228-3954


The Honorable Dianne Feinstein
United States Senate
331 Hart Office Building
Washington, DC 20510

Dear Senator Feinstein:

I am writing on behalf of ORGANIZATION NAME to thank you for your continuing support of the Micro Enterprise industry and request that you advocate to restore the $8 million in SBA PRIME funding in the FY2012 budget.

Last year, California’s share of the PRIME funds amounted to approximately $1 million and created an estimated 300 jobs with a potential for a total of 1,000. These small businesses create jobs and this small amount of SBA money has meaningful impact in our state. (ADD HOW PRIME IMPACTED YOUR PROGRAM HERE)

The PRIME program funds business technical assistance, a crucial element to the success of entrepreneurs. Small business owners that receive assistance have an 80 percent success rate versus the 80 percent failure rate of small businesses that don’t seek help. Also, entrepreneurs that receive assistance and start their own businesses on average create two jobs in addition to their own, over a three-to-five year period. Business assistance is a very cost effective job creation strategy –an average of $1,000-$3,000 per job compared to $50,000+ for a public works infrastructure project job.

The key difference between PRIME and the Microloan TA is who is eligible to receive funding and the scope of the training. PRIME recipients are non-lender entrepreneurship training programs while Microloan TA funds are restricted to lenders. Whereas PRIME funds programs that train entrepreneurs at the start-up phase of their business before they are ready for a loan, e.g. writing business plans, preparing cash flow statements, providing market research, Microloan TA funds programs that train businesses that are ready for growth. Thus these programs serve very different populations with different needs. Without the pipeline of suitable applicants at the start-up phase that PRIME funding supports, loan demand is low and default rates high. And that means slower job creation.

We are concerned about the funding for technical assistance and wish it to be restored to the FY 2010 levels of $8 million. As you know, the Senate funded PRIME at $0 and the SBA Microloan TA fund at $22 million; the House funded PRIME at $5 million and the Microloan TA fund at $14.5 million.

Thank you for your consideration of this request. We look forward to working closely with you to maintain maximum funding for these vital job creation programs for federal fiscal year 2012.