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‘Sharing Economy’ Hearing in the House

The hearing — “The Disrupter Series: How the Sharing Economy Creates Jobs, Benefits Consumers, and Raises Policy Questions” — was held on Tuesday, September 29 at the Subcommittee on Commerce, Manufacturing, and Trade, chaired by Rep. Michael C. Burgess, M.D. (R-TX).

“The sharing economy is an example of American innovation at its finest. With over 80 million Americans taking advantage of the many e-sharing options, we will work to better understand how this growing sector of our economy works, what it means for consumers and job creators, and what hurdles these businesses are facing across the country,” said Burgess. “This hearing will continue our subcommittee’s review of emerging technologies and the effect these innovations have on consumers, businesses, and our economy.”

We have spent a lot of time looking at the technology tools that are facilitating self-employment. Companies are challenging existing business models and creating exciting opportunities for consumers and entrepreneurs, but we must also be mindful of consequences and make sure that we’re not creating a race to the bottom. The hearing examines issues that impact the sharing economy from state and local regulations, liability insurance, federal regulations, competition with incumbent industries, and the appropriate role for the federal government moving forward.

Jon Lieber of Thumbtack (we just held a webinar with them) and made two key points:

  • Marketplaces like Thumbtack empower small businesses in a way that many “on-demand” services don’t. Policymakers should be mindful of these differences, and how these platforms are likely to change going forward.
  • Decoupling what have traditionally been thought of as employment benefits from employers would benefit both small businesses and members of the growing (but poorly tracked) contingent workforce.

You can read his full testimony on the future of work.

You can listen to the full hearing on how the sharing economy creates jobs, benefits consumers, and raises policy questions.

The Case for A Publicly Supported Ecosystem For Innovation and Entrepreneurship

Boku Kodama, Renaissance Entrepreneurship Center

Peter Drucker, the notable business thinker of the 20th Century once said that business was simply about two things: marketing and innovation. But he defined innovation not as possessing brilliant ideas but in being conscientious. Using Drucker’s definition of innovation, we – as leaders, as a municipality, as a state – need to more radically implement a conscientious policy of supporting entrepreneurship and innovation centers as a mandatory institution that services each community’s wellbeing just as we expect to find fire and police departments, public schools, libraries, parks and medical centers in every city. Lest we forget, it is new startups that are creating the most new jobs and new revenue, according to the Kauffman Foundation. Policymakers need to tie their economies with entrepreneurial growth.

With no disrespect to our municipal small business assistance centers, the Small Business Development Centers (SBDC) or to the chambers of commerce, we need to get our heads around those facts that drive our economy. While these institutions provide a valuable service to small businesses, what’s blatantly obvious is that their services are utilized randomly than as an inclusive culture that we as a community should expect in our economic agenda. If over 60 percent of businesses fail by the third year that should be evidence enough that our existing methods of supporting entrepreneurs needs a lot of improvements.

Innovation and Entrepreneurship Keep Our Economy Strong
Innovation and business development should be at the heart of a healthy community because they create new jobs and generate the revenues necessary to provide our public services. China is an example of this as are more and more nations such as Denmark, Finland, Sweden, Hungary and New Zealand – all with higher startup rates per capita than the United States. (Source: Gallup World Poll)

Moreover, as our jobs economy migrates at a rapid pace towards a self-employed workforce, we must consider a new method of supporting their wellbeing in the same way as employees have an Employment Development Department. According to the Freelancer Union, the self-employed workforce will be at least 40 percent of all workers by 2020 even by conservative estimates. Being proactive to support this growing trend now will serve our economy far better than continuing to ignore the importance of entrepreneurship and innovation as natural and necessary change agents.

Innovation is critical for our economy to grow but it must go hand-in-hand with entrepreneurs who can run with the idea and bring it to market. No matter how great an idea, if it doesn’t become marketable, it has no value to society. True entrepreneurs are doers – and they calculate the risks and go after what they believe is the right course of action with a sense of passion and urgency.

Growth in Jobs and the GDP Only Comes with New Entrepreneurial Activities
Think about it this way, jobs and the national GDP growth rarely follow innovation. But growth in jobs and the GDP will always follow the rise of entrepreneurial activities. Both the Gallup polls and the Kauffman Foundation have compiled enough data on this factor to indicate that while innovations are valuable, they are not always of value to the customer; thus having no economic or social benefit.

According to the Kauffman Foundation, nearly 100 percent of the US net new jobs are coming from new, small businesses (one to 19 employees). Yes, these are entrepreneurs who oftentimes are sweating the finances and working ungodly hours creating jobs and increasing the local tax base, usually with little support or capital infusion. These are the very jobs that job training programs are servicing and for which a community almost unknowingly gains economic benefits. By periodically taking away incentives for entrepreneurship, those businesses go away and job training programs become irrelevant.

We need continuous support of our innovators as the federal government has done for the sake of the economy, but it’s the entrepreneurs who gladly take on the role of instigators; who experiment and iterate, who figure out how to market and sell these new innovations. It’s the entrepreneurs who are asking the critical questions: 1. Who are the customers? 2. What value is this innovation bringing to them? 3. How many customers will buy this? 4. How will we deliver it better than anyone else?

Every local community needs to finance and support an economic ecosystem consisting of innovators, entrepreneurs, entrepreneurial support systems, and policymakers working hand-in-hand in a circular system. Like a garden, we need seeds, water, fertilizer and sunshine. Cut out one and the garden dies.

5.4 Million Businesses Justify A Stronger Support System
The demise of many entrepreneurs was felt during the Great Recession of 2008. Until that point, new startups outpaced business failures by 100,000 each year. But from 2009 to 2014, the annual failures outnumbered new startups by 70,000 – 470,000 failing to 400,000 new startups. It was the first time in American history when the numbers went in reverse. (Source: Gallup Poll, 2014)

In terms of jobs, this translates to a high of 138,000,000 employed at the start of the 2008 to the elimination of over 8,000,000 jobs at the low point in January, 2010. As startups are beginning to come back, the number of jobs has also risen to an all-time high of 142,000,000 as of August 2015. (Source: Bureau of Labor Statistics) Of this amount, the US Small Business Administration estimates that 63 percent are employed by firms with one to 19 employees.

While 2015 looks promising with more startups since 2008, the United States still lags behind 11 other nations in business startups. According to Kauffman, new startups are the biggest generators of jobs. Overall, there are 6 million businesses in the country with 3.8 million of them having four or less employees. Companies with 5 to 9 employees are one million strong. 600,000 firms have 10 to 19 employees (meaning 5.4 million or 90 percent of all businesses have under 20 employees). 500,000 businesses employ 20 to 99. There are 90,000 companies with 100 to 499 employees, 18,000 have 500 employees or more and 1000 firms have over 10,000 employees. (Source: Gallup Poll, 2014)

Getting Our Heads Around A Formal Economic Ecosystem
If the Kauffman study is correct, that young firms are the greatest engine for job creation (1.5 million new jobs per year by firms less than a year old), we need to rethink our local policies encouraging a beehive of entrepreneurial activities in every city. If we change our paradigm of innovation and entrepreneurship centers as new income generators for the local economy, the improved odds for businesses to succeed means a long lasting revenue stream for the city coffers.

Specifically, these centers would include hands-on training, one-on-one advising, access to capital, incubators with a systematic support system, shared workspaces, post-launch support services, community-wide business launch festivals and specialized network gatherings. In addition, public schools need to update their curriculum to prepare students for the emerging economy by introducing entrepreneurship, creativity and financial literacy as experiential training rather than classroom lectures.

Economists may present data showing the historical turbulence of our economic system but we also haven’t supported a publicly funded economic ecosystem. We seem to be caught in a time warp where we continue to believe in entrepreneurs as lone wolves who prefer operating without anyone interfering. We know that when this happens, 63 percent of them go belly-up by the third year. And we also know that when entrepreneurs work in tribes, putting their ideas out there to discuss and improve, 89 percent of them get to the five-year benchmark when steady customers and profits are realized.

The facts are staring us in the face: entrepreneurs bring innovation to market. They produce nearly 100 percent of the net new jobs in America. Profitable businesses pay their fair share of taxes and contribute their expertise to the market which then creates an exponential aftereffect allowing others to thrive. It’s time to shift our thinking and develop a conscientious innovative solution. What we need is an economic ecosystem invested through public funds with every expectation of generating jobs and strong revenues.

Social Entrepreneurship Venture Challenge

Thanks to Betsy Densmore, Founder/Managing Director of Academies for Social Entrepreneurship

The Social Entrepreneurship Venture Challenge will bridge the gap between venture philanthropists seeking financial and social impact AND well-vetted social enterprises that can deliver double bottom line returns. After integrating due diligence reviews, mentoring and business plan/pitch development, the Challenge will showcase the most promising social entrepreneurs to a select audience of impact investors.

Traditional methods of solving chronic social issues have failed to move the needle to end poverty in America. Leaders from all sectors are calling for new approaches, especially ventures that blend the best of what each sector offers. Social enterprises do just that- using market-driven mechanisms to address social problems ranging from environmental clean up to employing ex-offenders to bringing fresh produce to neighborhood “food deserts”.

The SocEnt Challenge seeks to re-direct expertise and money which has historically been locked in conventional financial markets into social enterprises that build healthy communities. Last year’s pilot program drew over 60 ventures, addressing social needs in education, technology, homelessness, environment, urban revitalization, veterans’ needs, and health. Drawing on you and other colleagues to help us spread the word, our goal is an even more diverse and vital pool this year. Examples of already-identified ventures are recycling bicycles, producing clothing for cancer survivors, serving as brokers for sustainably caught seafood and super effective STEM programming.

Contestants may be for-profit, not-for-profit or hybrid early stage social enterprises. We are seeking ventures that have a proven concept, indicated by either having been in operation for at least three months and having begun selling their product or by having outside investors. We seek ventures that:

  • Directly address a particular social problem;
  • Influence systems, not just symptoms of the problem;
  • Have a proven leadership team;
  • Project significant social and financial returns; and
  • Prioritize social impact over financial gain for its owners

Applications are due by October 30, 2015.

MicroLending Academy Newsletter: Opportunities to Scale

The MLA newsletter is chock-a-block with articles, resources, technology, success stories, interviews, and big picture ideas on all Lending Academy features. This edition focuses on the many opportunities CAMEO is extending to its members in order to scale.

In this Issue…

  • CAMEO in Action:  SB 197
  • Success Story:  Southern Girl Desserts
  • MMS Update: Fresno CDFI onboard, Q3 Update
  • Loans to Lenders: Capital for Lending Programs
  • Excellence in Lending: Scaling for the Mission
  • Best Practices: OFN’s Risk Rating System
  • Research:  Financial Inequality – Credit to Wealth
  • News

CAMEO In Action: SB 197

SB 197 (Block) is making its way through the California Legislature.  It’s passed the Senate, Assembly Banking and Assembly Appropriations.  Next stop is the Assembly floor later this month.  CAMEO is co-sponsoring SB 197 with Opportunity Fund.

The bill would remove a competitive disadvantage that currently affects licensed commercial lenders in California. The bill would allow them to pay referral fees to those from whom they receive business, subject to certain restrictions intended to promote responsible lending. In essence, the bill would allow CAMEO’s microlenders to pay referral fees to consultants, non-profits (e.g. TA providers) and others who refer successful loans. It also will give your clients more information about affordable lending products.  CAMEO is co-sponsoring SB 197 with Opportunity Fund.

Success Story: Southern Girl Desserts

SouthernGirlDessertsFor an example of the type of business SB 197 would help, check out the story of Southern Girl Desserts who got into some hot water with a couple of online lending products.

Catarah Hampshire began baking southern-style cupcakes as a hobby, until she realized how much people loved the comforting, delicious taste of southern hospitality. Who isn’t curious about trying a Hennessey and Coke cupcake? Or having a chicken and waffles treat for dessert? Indulging in a tiny pecan pie-cake?

She officially opened Southern Girl Desserts in 2007 in Los Angeles. When business took off, her and her partner Shoneji Robison needed financing to purchase extra equipment.  Find out about their troubles when they took a Merchant Cash Advance and how Opportunity Fund helped them take control of their business finances.

Technology: MMS Update

MMSQ3Y2 2With three months still to go in this program year, each MMS organization has nearly met or exceeded the number of microloans they made last year. We project a 38% growth over the first year of the program, and a 116% increase over the 2012 base year. At a projected 132 loans, the MMS cohort is now the fourth largest lender in the CAMEO network and growing!

Next week, Andrew Cole and Susan Brown will travel to Fresno to train the Fresno CDFI staff on MMS.  Fresno CDFI closed 50 microloans in 2014 and aspires to grow their program in the coming year.  MMS will support this growth by allowing Fresno’s staff to focus on building the loan pipeline and servicing to maintain high repayment rates.

We are looking forward to including Fresno in CAMEO’s MMS family that now includes Working Solutions, Women’s Economic Ventures, CDC Small Business Finance, Opening Doors,  Economic Development & Financing Corporation (EDFC), and soon, Mission Economic Development Agency/Adelante Fund.

Contact Susan Brown if you’re interested in learning more or participating in the MMS program.  MMS, developed by LiftFund (formerly Accion Texas), provides instant risk assessment and fast, quality underwriting to support microlenders in scaling up and maintaining strong portfolio performance.

Loans to Lenders: Capital for Lending Programs to Scale

  increase your loan capital VEDC is forming a $20 million National Microfinance Fund (NMF) to expand its small business loan portfolio to include lending to microlenders across the country.  VEDC recognizes the lack of readily accessible capital for non-profit microlenders.  Through a national platform, quicker and easier access to capital will enable microlenders to scale.

Join CAMEO and Brandon Napoli on August 19, 2015 at 2:00pm to discuss the benefits, eligibility requirements and application procedures for this new program.

Excellence in Lending: Scaling for the Mission

1000947586The goal of our Excellence in Lending program is to digest big picture topics important to our CDFI members: the frameworks, processes and goals that underlie programs and lead to greater success.  These calls are for the big picture thinker at each CDFI, to support greater competitiveness, volume and efficiency.

Our next call is August 27, 2015 at 2:00pm when Opportunity Fund will talk about scaling to reach more underserved businesses.

As merchant cash advances and other online lenders pour millions of dollars into disadvantaged communities at 50 percent  and higher annual interest rates, it is increasingly incumbent upon each of our CDFIs to consider scaling up to the hundreds-of-loans-per-year level.  Without this, the neediest in our communities have no viable alternatives to these ubiquitous and usurious online loans.  The technology and organizational models for this volume of lending is established and proven.

CAMEO invites leaders and the big thinkers to a presentation from Opportunity Fund on their lending process on August 27, 2015 at 2:00pm.  Their process —  which does not use high tech algorithms or online applications — led them to close 1,560 microloans this past year.  The business model that allows such scale has elements that leaders in the CAMEO lending network need to consider.

Opportunity Fund makes a strong case that scale is a key component of their tremendous success in increasing grants from funders, capturing new sources of capitalization and establishing innovative partnerships.  As Marco Lucioni, their Executive Vice President of Lending, said in a recent interview with us, ‘anyone committed to scale could do what we are doing.’

Best Practices: OFN’s Risk Rating System

Don’t roll the dice on your portfolio.  A risk rating system is an essential part of running a professional, sustainable loan program.  It can help you:

  • Preserve your capital
  • Improve your understanding on what makes for a strong, successful credit
  • Get clearer on what credits to avoid in the future
  • Improve how you structure deals
  • Anticipate problems while they’re still salvageable
  • Determine which businesses need post-loan business coaching
  • Get a read on both big and small-picture strengths and weaknesses in your portfolio
  • Gather information on where to focus goals in the coming months
  • Improve your marketing and outreach to businesses whose profiles match your strong deals.

About 73 percent of CAMEO’s lending members have a risk rating system in place.  Sixty percent review a risk rating report monthly, quarterly or annually.  For those of you looking to scale up your loan volume, be sure to get a good risk rating system in place and invest time into using it regularly.  A great place to start would be OFN’s Risk Rating Systems Memo.

Research: Financial Inequality – Credit to Wealth

Financial inequality starts with basic access to traditional credit, like a bank loan or credit card.  About 54 million people in the United States have no credit standing, i.e. they are “credit invisibles (video).  The Consumer Financial Protection Bureau broke it down by race and ethnicity: “Whites are the least likely racial or ethnic group to be credit invisible….Blacks and Hispanics…, are notably more likely to be credit invisible or to have an unscored record than Whites.”

Without basic access to capital, the wide racial wealth gap continues to increase over time; millions of families nationwide lack enough assets to offer better opportunities for future generations.  The Federal Reserve presented some evidence as to the extent and implications of racial wealth inequality in a webinar: Racial Wealth Inequality at the Metropolitan Area and National Levels: Findings and Implications.

So what can we do about the gap?  CAMEO supports alternatives to FICO scores as we feel that will give more people access to basic capital and create more business owners.  The evidence keeps mounting that business ownership is a key wealth generating strategy that can help close the wealth gap.  Business assistance programs play a role to ensure that business owners have access to reasonably priced, appropriate capital as the type and amount of credit accessed influences the amount of wealth a business owner can create.


2014 WOVEN Event Info


US SBA 2013November 6, 2014 · 8:00 am – 5:00 pm
Bob Hope Patriotic Hall
1816 Figueroa Street
Los Angeles

The U.S. Small Business Administration, Los Angeles District Office, and our Host Committee*, and CAMEO presented a special intensive business training for women veterans and military spouses, as part of Veterans Small Business Week.

SBA’s participation in this cosponsored activity is not an endorsement of the views, opinions, products or services of any cosponsor or other person or entity. All SBA programs and services are extended to the public on a nondiscriminatory basis.
This Web site is provided as a public service under Cosponsorship Authorization #14-0914. It is not an official U.S. government Web site and may contain links to non-U.S. government information. Inclusion of such links does not constitute or imply an endorsement by SBA. SBA is not responsible for the content, accuracy, relevance, timeliness or completeness of linked information. Please use caution when considering a product, service or opinion offered by a linked Web site.


8:00a Networking Continental Breakfast

9:00a Welcome

Representative Judy Chu (invited)
Lindsey Sin, Deputy Secretary, Women Veterans Affairs, California Department of Veterans Affairs

10:15a Morning Breakout Workshops

A) Demystifying Entrepreneurship/Business Ownership (Start Up)

  • What it is and isn’t
  • What makes a good business owner
  • Self-employment/business readiness assessment
  • Resources

Presenter: Betsy Densmore, Director and Archie Holton, Program Leader at Academies for Social Entrepreneurship

This session brought to you courtesy of Pacific Western Bank

B) Intro Microlending (Start Up, Stable, Stretch)

Do you really need a loan? What does it take to get your first loan? What do lenders look for in a loan applicant?

Presenters:  Valery Belloso (Accion San Diego), Brandon Napoli (Valley Economic Development Center), Daniel Fernandez (Opportunity Fund)

C) Government Contracting (Stretch)

If you’ve ever tried to get your SDVOB certification so that you can do business with the federal government, you know it’s tedious and confusing. Many veterans give up, but shouldn’t. Even thought it could take more than two years to obtain, a SDVOB certification opens a lot doors. This workshop will walk you through the process, clear up any confusion and point you in the right direction for your certification.

Presenters:  Garnett Newcombe, CEO of Human Potential Consultants LLC and Women Impacting Public Policy (WIPP) National Partner member; Sandy Schneeberger, Founder of Sanberg Group, Inc. and President of L.A. Chapter Elite SDVOB Network; Veronica Soto Moderator: Mike Sabellico, Executive Director, Disabled Veterans Business Alliance

11:45a Networking Lunch 

Grab your lunch and meet other veterans who have same interests.  Sit with like-minded participants at a table with a designated topic or create your own.  Suggestions: regional (e.g. city), industry-specific (e.g. energy, specialty food), business issue specific (e.g. marketing, accounting).

Karen Bates photoSpecial Guest Keynote 
Marsha Bailey, CEO, Women’s Economic Ventures
CEO/Founder, Women’s Economic Ventures
Chair, Association of Women’s Business Centers


Karen Bates (photo left)
Founder of Military Loans
President, The VApro Network
Juggling With Fire

JuggleWFireAs a woman in business, you hold amazing super powers when juggling all aspects of your busy life…at times, it may even feel as though you are juggling with fire. And that fire can fan the flames to new levels of success OR leave you feeling burned.  Instead let your fire take you to a new level!  Three take-aways from Karen’s talk:

  • The 3 most common fires that leave women business owners burned
  • How your feminine super powers are the true key to your success
  • The one business booster (vs. an entirely new business plan) you need to catapult your business in 2015

Karen combined her military background with her financial expertise and founded Military Home Loans. Her passion is to ensure Veterans never miss the opportunity to experience their American dream. In 2014, loaded with 10 years of knowledge and experience from closing over 600 VA transactions, Karen and her husband Ken created The VApro Network. Karen is California’s 2013 Mortgage Professional of the Year and was featured on Yahoo Finance for earning and retaining $1 million as a female entrepreneur.

Networking Cookie Bar

1:45p Afternoon Breakout Workshops I

A) Business Planning Step 1: Clarifying Your Vision, Mission and Values (Start Up)

This session will help you to develop your vision and mission statements, and identify your business’s shared values. The workshop will be facilitated using Centro’s Business Planning Tool, a mobile app that takes entrepreneurs through a guided, step-by-step process to create a basic business plan.

It is recommended that you download the app and complete the following activities: Personal Values, Vision, Mission and Shared Values. If you are unable to do so, you will still be able to participate in the activities.

Presenter: Daniel J. Healy, Entrepreneurship Trainer and Program Manager, Centro Community Partners

B) Developing a Brand (Stable, Stretch)

All brands have personalities, and these define everything from how you tell your brand’s story to how you design your packaging. This interactive session hosted by IDEO will introduce you to the design thinking process, help you create or refine your brand, and provide feedback on how this may impact the design of your product packaging, retail space, or service.

Presenters:  Lisa Baird, business designer, IDEO and Misa Misono, business design lead, IDEO

C) Financing for Growth (Stable, Stretch)

Are you ready to grow, but need cash to make it happen? in this session, you will learn about

  • the important role that capital plays in the growth process and why you need to get it right;
  • the difference between credit planning and planning for growth;
  • what is necessary to be a successful loan applicant and overcome some of the barriers; and
  • Direct Public Offerings and crowdfunding.

Presenters: Kim Arnone (Director of Crowdfunding, Cutting Edge Capital), Sharon Evans (Business Resource Group), Jesse Torres (CA SBDC Lead).

3:15 Afternoon Breakout Workshops II

A)  Business Planning Step 2: Walk a Mile in Your Customers’ Shoes  (Start Up, Stable)

Put yourself in your customers shoes.  Who are they? What do they want?  Understand your customer and how to provide them value.  Learn how to do a customer analysis, figure out what their priorities are, and brainstorm ways to reach them.  The workshop will be facilitated using Centro’s Business Planning Tool, a mobile app that takes entrepreneurs through a guided, step-by-step process to create a basic business plan.

It is recommended that you download the app and complete the following activity: Customer Analysis. If you are unable to do so, you will still be able to participate in the activities.

Presenter: Daniel J. Healy, Entrepreneurship Trainer and Program Manager, Centro Community Partners

B)  Developing a Brand (Start Up, Stable)

All brands have personalities, and these define everything from how you tell your brand’s story to how you design your packaging. This interactive session hosted by IDEO will introduce you to the design thinking process, help you create or refine your brand, and provide feedback on how this may impact the design of your product packaging, retail space, or service.

Psst, if you already have packaging for your product, bring it with you and you’ll be able to get feedback!

Presenters:  Lisa Baird, business designer, IDEO and Misa Misono, business design lead, IDEO

C) Think Like a Negotiator (Start Up, Stable, Stretch)

Negotiation is simply discussions to agree on a deal. Whether you are negotiating a multi-million dollar deal or simply where to meet for dinner, improving your negotiation skills will give you more confidence and better results. Learn how to find more power, negotiate better deals and create win-win results. You will be energized, empowered and educated to be a better negotiator and understand the art and language of negotiation.

Presenter: Eldonna Lewis Fernandez, MSgt USAF Retired,

4:40 Wrap Up and Drawing

*Host Committee
Academies for Social Entrepreneurship • Accion San Diego •
Asian Pacific Islander Small Business Program • Business Resource Group •
California Department of Veteran Affairs • CDC Small Business Finance •
Disabled Veteran Business Enterprise • Elite SDVOB Network • Inland Empire
Women Veterans Collaborative • The Jonas Project • Long Beach Small Business
Development Center • Pacific Asian Consortium in Employment • Pacific Coast Regional
Small Business Development Center • RISE Financial Pathways • VEDC •
Women Veterans Connect • Women Veterans Unity Group

California has 1.8 million veterans, the highest number of any state, a large majority of them located in Los Angeles County: 18% are women; 16% of women veterans reported being unemployed and 28% reported they were unemployed and not looking for work.

Micro-business and self-employment offers veterans, and especially women veterans and veterans with disabilities, increased opportunities to maximize their strengths and skills, to achieve their financial and career goals, and to customize their employment to accommodate their challenges.


Download a Woven Flyer and help spread the word!

CAMEO thanks our following supporters:

Job Creators


Start Ups




First Republic Bank - 2014


Military Home Loan logo


Ms. CAMEO Went to Shanghai to Talk Microfinance

Last week Claudia was in China to talk about microfinance and how to bring a CAMEO-type organization to China. Here’s what she had to say about the exchange:

On July 29th I had the privilege of being the honored guest at a Micro Finance Roundtable hosted by Dr. Ting Lowery, Director of the Center for Chinese Entrepreneur Studies at the prestigious Tsinghua University in Beijing. Senior managers from the Alibaba Group (the Chinese version of a combined Amazon, EBay, Google, and PayPal) and CreditEase (a massive, new peer-to-peer microcredit platform that has facilitated $400 billion in urban and rural lending in the past five years) attended, along with local small business owners.

Our conversation focused on reaching low-income entrepreneurs, particularly those in rural areas. I was fascinated to see how vertically and horizontally integrated both companies are in serving the credit needs of low-income microentrepreneurs as well as college students and workers. I realize that this is due to limited financial and credit services in China that we enjoy in the U.S., e.g. few use credit cards, banks don’t make small business loans, etc… And competition as we know it in the West, does not figure into China’s centrally controlled economy. Still, the scale and cost efficiency obtained by the Chinese – around $3 per loan made – are breathtaking.

CreditEase sponsors an “Inclusive Finance” program that serves college students and workers as well as entrepreneurs. The program provides value-added services, such as industry research, business consulting, credit evaluation and loans that average $9,000 at 3% interest rate.

Alibaba has Alipay, like our PayPal, that facilitates 8.5 million transactions daily and fills the need for online payments for retail and wholesale, due to lack of a strong credit card system in China. operates on the basis of providing small loans, short-term with flexible maturity on a huge scale. It lent $27.5 billion to 642,000 borrowers in 2013. Their e-commerce platform has been organized into Taobao Villages in 20 rural regions. Returning students and migrant workers help villagers start e-commerce businesses. These villages have become clusters that use e-commerce to boost the regional economy, for example in Chinese organic food. (I had the chance to feast on locally farmed and caught food on Chong Ming Island off Shanghai- incredible and completely different from Chinese food in the US!). The Taobao Villages strategy could be adopted by a number of rural regions in California. It is an intentional way to connect rural businesses to global markets and strengthen local supply chains. It combines hands- on TA with online capacity.

CreditEase and Alibaba are concerned about building trust, credibility, and transparency and responding to the microfinance market. A number of NGOs are engaged in microfinance in China, but there is no CAMEO-style network of business assistance providers and support to advocate on behalf of these necessary services. The roundtable participants asked me how to develop such a support system. Hopefully, Dr. Lowery will convene a future conference where this conversation can be developed further.

Food for Thought: how can our highly segmented and inefficient microlending system be integrated and scaled up without losing touch with individual borrowers’ needs for business advice and support? Perhaps mainstream could banks recognize a “microfinance market” like the Chinese companies do, and partner with nonprofits to delivery of trusted, non-predatory products and services? Could we learn a few things from China in this regard?

Micro, Meet Tech; Tech, Meet Micro

Square Event JulyCAMEO has been on a quest to bring you information about the technologies that are empowering self-employment and microbusiness. Last week, we co-hosted a lunch for our Bay Area members at Square’s offices with representatives from Square, LinkedIn, Salesforce, and Twitter to discuss how their tools help small businesses. Andrew took notes on how the different tools work with businesses.

Lana Khavinson, LinkedIn
The social media space is always changing: new platforms are constantly emerging and established platforms adapting. It’s important to think about where a business’s clients congregate online and build a presence there, rather than trying to chase every platform. LinkedIn is all about businesses answering questions for each other, such as, how do I attract customers? how do i retain customers? LinkedIn has several free tools. Urges everyone to have at least a basic LI profile, naturally. How do you find partners investors vendors or suppliers on LI? Service providers should DEFINITELY have a presence on LI. Retailers and food trucks probably not going to be best served by the platform, unless they’re specifically looking for B2B connections.

Karen Martell, Square
The Square reader lets you accept credit cards on your phone or tablet, for which they charge a 2.75% fee and offer next day deposits. They also sell a stand that serves as a more full service POS register. They’re interested in providing their users with a more complete backend service, so they’ve recently rolled out an invoice solution, plus inventory management services and analytics. Square integrates with QuickBooks and other online accounting services.

A lot of salons rely on Square for their register needs, and so Square has started to offer an appointments program for businesses to book their clients. They’ve also started to move into microlending, launching a capital program to their users. Businesses can run their payroll through Square, too, for a small fee per employee per month.

Nelson Huang, SalesForce
SalesForce is focused on Customer Relationship Management. The product covers the entire sales cycle from attraction to post-sale follow-up. They offer packages for nonprofits and small businesses, which provide a smaller list of features at a reduced rate,. Many users rely on SalesForce for their contact database, but they offer even more beyond; SalesForce grows with the business, so companies can expand their database as they increase in size and complexity. Many email programs like MailChimp and Vertical Response integrate with SalesForce, and there’s a robust app ecosystem covers a wide variety of user needs.

Will Heidrich, Twitter
Will helps nonprofits get the most out of Twitter. He walked us through the basics of using Twitter (and other social media) effectively: have a plan, first and foremost. What do you want to use Twitter for? Are you connecting with customers? Raising money? Developing community? Start tweeting once a day then respond to people as they talk to you. Slowly grow your post frequency as you get more comfortable with the platform. Create a brand voice; establish basic rules around what kind of face you present. Are you friendly? Informative? Be careful with hashtags; look at what other users are doing with that hashtag before you use it.


Microloan Program Reform Gains Traction, But Misses Key Changes

Thanks to AEO for this update.

The SBA’s Microloan Program certainly caught the eye of the 114th Congress. Advocacy efforts to reform the program, spearheaded by AEO, raised the much-needed issues of modernization and expansion to Members of Congress.

This month, the House passed legislation that would address some, but not all of the concerns of the microlending community. The bill, the Microloan Modernization Act (H.R. 2670), would:

  • Increase the microloan intermediary lending limit to $6 million.
  • Permit an SBA waiver of the 25/75 rule.
  • Extend the repayment terms for loans above $10,000 to a 10-year maximum.
  • Provide an additional ability to offer lines of credit.
  • Requires a GAO study that looks at the program and why so few intermediaries enroll and an SBA Office of Advocacy study into the impact of mandatory retirement savings  for microenterprises.

Notably, the House Small Business Committee, chaired by Representative Chabot (R-OH), did not pass amendments to the legislation that would have removed the third-party contractor technical assistance restrictions or the 1/55th rule.  Instead of allowing intermediaries to decide when technical assistance is necessary by doing away with the 25 percent pre-loan and 75 percent post-loan requirement, the House Committee granted a waiver.  To us, that seems like a whole lot of paperwork instead of a common sense solution.

On Wednesday, July 29th, the Senate Small Business Committee passed the House-passed legislation, sending the bill to the whole Senate for consideration. Nebraska Senator Deb Fischer led on the legislation.  Since the bills are not identical, a “conference” would be held – where differences are hammered out and a final bill emerges.  That happens after the Senate passes its version of the bill.

AEO would have preferred the provisions of another bill introduced by Senator Fischer, the Microloan Act of 2015 (S. 1445). It would remove the 25/75 requirement, the 1/55th rule and 3rd party restrictions all together. Congresswoman Chu offered a package of amendments to the House bill that would have reflected these changes but unfortunately, the House Small Business Committee rejected them.  S. 1445 is yet to be considered by the Senate Small Business Committee.

AEO will continue to advocate for the needed modernizations and expansions to be added to any Microloan Program modernization.  Our members largely feel like the bill passed by the House and Senate Small Business Committees are at best mediocre and at worst more paperwork and more rules for a program that badly needs more flexibility, not less.

Popularity of SBA 7(a) Loans

Our colleague from the SBA, Patrick Kelley has moved on to a new position. He partnered with Brayden McCarthy of Fundera to write an op-ed in The American Banker about raising the cap for the SBA 7(a) program, which was raised this week. The article had some interesting thoughts on why the program is so popular.

  1. Non-SBA bank lending is broken.

About 80% of small-business owners who apply for a non-SBA bank loan get rejected. It’s tempting to think that this is merely a knock-on effect of the financial crisis. But while there’s no question that the crash is partly responsible for the 10% decline in small-business lending compared to the pre-crisis boom, that’s not the whole story. The fall is part of a decades-long shift: in the 1980s, small-business loans made up about half of banks’ total loans. Today, they account for less than 30%.

A number of factors have led banks to pull back from small-business lending, including the loans’ higher transaction costs and the difficulty of assessing creditworthiness in a standardized, scalable manner.

Banks have increasingly turned to the SBA guarantee to take risk off the table. That is particularly true for borrowers seeking longer-term loans. An estimated 30% of all loans with a maturity in excess of three years are supported by an SBA guarantee, according to our analysis of call report data from the Federal Deposit Insurance Corp. SBA lending is also a boon for borrowers situated in higher-risk sectors who otherwise might not be eligible for bank financing, such as people in the restaurant and construction businesses. SBA loans are also three to five times more likely to go to minority-owned businesses and five times more likely to go to young firms, according to the Urban Institute.

  1. Technology has made SBA lending more efficient.

Myriad operational improvements introduced by SBA since 2009 are bearing fruit. Reduced or eliminated fees and higher loan limits have helped spur lending, as have efforts to cut paperwork, automate processes and let banks use more of their own underwriting models to decision loans. Going forward, technology is the real fulcrum of SBA’s modernization efforts. According to the SBA, the online lending platform SBA One in particular will reduce loan processing times for average SBA loans by 64%. This means that for some SBA products, processing times will fall from 100 business hours to a little over 24 business hours.

  1. Higher capital requirements have pushed banks toward the SBA guarantee.

Greater regulatory vigilance and new capital requirements looming under Basel III have made banks more averse to risky loans, making the SBA guarantee even more attractive.

Under traditional commercial lending methods, a lender funds 100% of its loans and includes the loan in full in its risk-based asset calculations. However, banks fund 100% of SBA loans but include only the unguaranteed portion of the loan, which can run from 15% to 25%, in their calculations. That alone can dramatically improve a bank’s capital ratios.

  1. Secondary markets for small-business loans are heating up.

Resurgent secondary markets have also spurred banks’ 7(a) lending. A sizable secondary market for small-business loans doesn’t exist outside of SBA lending, which makes non-SBA loans both more costly for banks and less desirable.

Secondary markets took a big hit during the financial crisis, with unit volume falling 40% in 2009, according to SBA data. But last year roughly 30% of 7(a) loans were sold on the secondary market, according to the SBA. This has helped lenders grow profits more rapidly while preserving strong capital ratios and a conservative balance sheet. It also provides quick returns for banks looking for fee income generation and incremental yield.. In fact, secondary markets are willing to pay average market premiums on guaranteed portions of SBA loans of 10%-15% of the loan’s face value.

  1. The SBA’s other lending program is underutilized.

Strength in 7(a) volume is also due to weakness in the SBA’s other flagship loan program, 504 loans. Lenders only minimally support this program. In 2014, for example, 56% of lenders made only one 504 loan, while 74% made two loans or less in that category. Rather, lenders are turning to the 7(a) program to make commercial real estate loans, which constitute 40% of all 7(a) volume — precisely the kind of loans that 504 was created to support.

Given rising commercial real estate values and a looming rate hike by the Fed, Congress and lenders must grapple with the question of why 504 loans are underutilized.

Part of the reason is that 504 is a fixed-rate product. In a low-rate environment with a rate hike imminent, that’s less attractive. But the crucial reason is that the economics of 504 loans are generally less favorable for banks.

Because banks cannot sell their 504 loans in secondary markets, they hold them on balance sheets, undermining capital ratios. We estimate that these economics produce a risk-adjusted return on capital of roughly 6% for a $1 million 504 loan, versus 41% for a similarly-sized 7(a) loan sold into the secondary market. Congress ought to insist that the private sector establish a secondary market for 504 loans, which would spur 504 loan volume and address liquidity and capital needs of community banks.

Absent SBA loan options, millions of small businesses would have little alternative but to max out personal and business credit cards or borrow at much more expensive rates with online alternative lenders, some of which carry interest rates reaching the triple digits. Further delays to raising the 7(a) lending limit risk removing a vital, low-cost lifeline upon which small businesses depend to finance expansion and hiring. Lawmakers ought to raise the 7(a) lending limit in short order.

Brayden McCarthy is head of policy and advocacy at Fundera and was formerly senior economic policy advisor in the Obama White House and SBA. Patrick Kelley is a vice president at Live Oak Bank and was previously deputy chief of staff at SBA. Follow them on Twitter at @btmccarthy and @jpatrickkelley.

California Competes Tax Credit Workshops

GO-Biz is Holding Statewide California Competes Tax Credit Workshops

The Governor’s Office of Business and Economic Development (GO-Biz) is holding a series of California Competes Tax Credit technical assistance workshops throughout the state:

Sacramento, CA
Tuesday July 14, 2015
Details and Registration

Visalia, CA
Thursday July 16, 2015
Details and Registration

Fresno, CA
Thursday July 16, 2015
Details and Registration

Vacaville, CA
Monday July 20, 2015
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Santa Rosa, CA
Monday July 20, 2015
Details and Registration

Pittsburg, CA
Tuesday July 21, 2015
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Seaside, CA
Wednesday July 22, 2015
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Santa Cruz, CA
Wednesday July 22, 2015
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Santa Paula, CA
Thursday July 23, 2015
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Atwater, CA
Friday July 24, 2015
Details and Registration

Murrieta, CA
Friday July 24, 2015
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Vernon, CA
Monday July 27, 2015
Details and Registration

Camarillo, CA
Tuesday July 28, 2015
Details and Registration

Lancaster, CA
Tuesday July 28, 2015
Details and Registration

Torrance, CA
Wednesday July 29, 2015
Details and Registration

Redlands, CA
Wednesday July 29, 2015
Details and Registration

Cathedral City, CA
Thursday July 30, 2015
Details and Registration

Rialto, CA
Thursday July 30, 2015
Details and Registration

Tustin, CA
Friday July 31, 2015
Details and Registration

San Diego, CA
Friday July 31, 2015
Details and Registration

Ceres, CA
Thursday August 6, 2015
Details and Registration

Watsonville, CA
Thursday August 6, 2015
Details and Registration

Bakersfield, CA
Friday August 7, 2015
Details and Registration

Online Webinar
Monday August 10, 2015
Details and Registration

The California Competes Tax Credit was created by Governor Brown and is focused on helping businesses grow and stay in California. In the 2014-15 fiscal year, GO-Biz allocated approximately $150 million to 212 companies that are projected to create over 29,400 jobs and make over $7.1 billion in investments. Companies interested in applying for California Competes tax credits can apply during the next application round which begins July 20. Applicants complete a free, user friendly application available on-line at  Applicants can access an application guide, FAQs, schedule of application periods, and other technical assistance documents here.

About California Competes
The California Competes tax credit is part of the Governor’s Economic Development Initiative (GEDI) which Governor Brown signed legislation to enact in 2013 (AB 93 and SB 90). GO-Biz evaluates the most competitive applications based on the factors required by statute, including total jobs created, total investment, average wage, economic impact, strategic importance and more. Companies are exempted from paying state income taxes in the amount awarded.

About GO-Biz
The Governor’s Office of Business and Economic Development (GO-Biz) serves as California’s single point of contact for economic development and job creation efforts. GO-Biz offers a range of services to business owners including: attraction, retention and expansion services, site selection, permit streamlining, clearing of regulatory hurdles, small business assistance, international trade development, assistance with state government, and much more. For more information