In mid-October, 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.