CalFOR Report

CalFOR: A Guide to Access to Capital for Small and Micro-business in California

In December 2011, Glenda Humiston, the California Director for the U.S.D.A. Rural Development, convened eighty leaders from financial institutions, economic development organizations and government agencies in order to explore how to improve access to capital for California’s small businesses. The group, California Financial Opportunities Roundtable (CalFOR), is part of a statewide initiative supporting development of regional industry clusters to provide jobs, entrepreneurial opportunities, business growth, public and private sector investment in value-chain infrastructure and thereby build sustainable communities throughout California.

Claudia Viek, C.E.O. of CAMEO (and happens to be on the front cover!), was appointed to chair the working group on local investing in the broad sense. The taskforce recommended actions that would facilitate capital to locally owned businesses, using intermediary platforms such as crowd-funding sites, nonprofit lenders and non-accredited private investors. Claudia’s participation, along with other CAMEO members, ensured that micro-business is seen as an integral piece of the economic growth strategy for California.

One of the key strategies the Roundtable recommends for California is to support micro-business (pp. 6-7 of the report.) When micro-business owners receive small loans (under $50,000) combined with targeted technical assistance (e.g. market research, financial planning and/or management assistance) over 80% survive and thrive during the first three-to-five years; furthermore, they generally create two jobs in addition to the owner over 36 months. Strengthening the micro-business sector will stimulate local economies and raise state revenues; public and private sector investment in this sector can reap large rewards.

Working with a wide array of partners, other recommendations include:

  • Innovation in Capital Markets and new sources of investment for projects and business growth.
  • Expansion of regional food systems and associated value chain opportunities.
  • Growth of biomass utilization, biofuels and renewable energy production.
  • Development of region-specific industry clusters and related business networks.
  • Improved Rural-Urban collaboration and related infrastructure deployment.

The process also revealed that many options for capital access already exist but that most businesses, entrepreneurs and their business advisers often are unaware of the resources.That lack of awareness directed CalFOR’s efforts toward development of this guidebook. It’s the first step toward a healthy capital ecosystem – one where large, small, and micro-businesses, communities a.nd people can all thrive. The next step is to pursue implementation of the recommendations.

Download the full CalFOR Handbook