Latest Blog Posts

2014 WOVEN Event Info

AGENDA || SPEAKERS || LOGISTICS

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.

WOVEN AGENDA

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

introduces

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, www.ThinkLikeANegotiator.com

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.

Resources

Download a Woven Flyer and help spread the word!

CAMEO thanks our following supporters:

Job Creators

PacificWesternBank_vertical_PMS288

Start Ups

East-West-Bank-2013seacoastlogo

Catalysts

Federal-Home-Loan-of-San-Francisco-2014-(b-&-w)

First Republic Bank - 2014

Friedman-Family-Foundation-2013

Military Home Loan logo

Union-Bank-2013

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. Aliloan.com 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 Taobao.com 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
Details and Registration

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

Pittsburg, CA
Tuesday July 21, 2015
Details and Registration

Seaside, CA
Wednesday July 22, 2015
Details and Registration

Santa Cruz, CA
Wednesday July 22, 2015
Details and Registration

Santa Paula, CA
Thursday July 23, 2015
Details and Registration

Atwater, CA
Friday July 24, 2015
Details and Registration

Murrieta, CA
Friday July 24, 2015
Details and Registration

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 www.calcompetes.ca.gov.  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 visit:www.business.ca.gov.

Micro Lending Academy: Advanced Balance Sheets

Advanced Balance Sheets

Now that we all know what a balance sheet is and how it operates, what type of analysis can we do with it? In this webinar we will review some common balance sheet ratios used by lenders, but then move onto analysis that is useful for business owner management decisions:

  • How much working capital does the business need to operate and to grow? Are there ways to manage working capital more efficiently?
  • What is the operating cycle of a business and can it tell the owner about business operations? Particularly, how is the owner managing inventory, bills and collections?
  • What does the balance sheet tell us about how a business has used debt and how much the business might qualify for? What type of debt does the business need most?
  • Finally, even if you work with businesses that don’t have balance sheets, how can you use this knowledge to direct clients to better business development decisions?

Watch and listen to the webinar (79 minutes)

About the Presenter

SusanBrownSusan Brown is a Business & Community Development Specialist with a specific focus on Business Finance and Rural Microenterprise. CAMEO engaged Susan to implement our Rural Initiative in 2008 and is now managing our partnerships with Kiva and LiftFund’s MMS platform. Through her consulting service Susan provides strategic planning, facilitation, program development and grant writing services to non-profit organizations and government agencies as well as consulting services to small business owners.

MicroLending Academy Newsletter: Commitment 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 capacity building and lists several opportunities for training, whether they be peer calls, webinars or tools you can use.

In this Issue…

  • Success Story:  Opportunity Fund, A Commitment to Scale
  • A Banker’s Perspective: Fred Mendez, Union Bank
  • Excellence in Lending: Refining the Process for Efficiency
  • Best Practices: Cash Flow and Balance Sheets
  • MMS Update: Welcome Our Newest Lender
  • Research:  Crowdfunding by the Numbers
  • News

box_bottom.gif

Success Story: Opportunity Fund, A Commitment to Scale

1000947586Earlier this month, Opportunity Fund announced a collaboration to grow responsible lending with Lending Club, the world’s largest online credit marketplace. With a seamless technology integration forged between Opportunity Fund and Lending Club, the potential for scale is unprecedented and the customer experience will be unparalleled.

In fact, Opportunity Fund has said that they want to invest $100 million in microlending over the next five years.  Susan Brown, our microlending guru, spoke to several members of the Opportunity Fund staff about how they are well on their way to accomplishing their goal.

A Banker’s Perspective: Fred Mendez, Union Bank

1000947586Fred Mendez, long known as a champion of micro business development and lending in California, recently assumed the position of Managing Director of Corporate Social Responsibility for the Americas for MUFG Union Bank, NA.  Prior to taking on this exciting new role, Fred ran the Community Development program for Rabobank for 8 years, creating a legacy of innovation in expanding small business lending in under-served rural regions.

Fred agreed to talk with Claudia Viek, our CEO, about his new job.  He was also willing to share his perspective on opportunities confronting CDFIs doing small business lending to LMI borrowers and why he thinks they should take more risk in this market.

Excellence in Lending: Refining the Process for Efficiency

1000947586Our Excellence in Lending program started with an assessment of operations and performance, and became the focus of our annual Microlending Forum in January.  We are following up with quarterly peer calls to discuss lending models and fine tune some metrics.

Our goal 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.

Brandon Napoli, Director of Microlending at VEDC, presented on how they close 300 deals per year with a modest staff and little automation.  Brandon has codified, in detail, all the steps in their lending process: who does what, how, and by when.  From packaging to assessment to underwriting to closing — VEDC is a well-oiled machine.  They can get a deal through their process in a week or two.  VEDC has also created a three-tiered incentive system, based on individual, team, and portfolio performance.  He said:

We cultivate a mission-driven, sales culture.  We strive to meet community needs by increasing scale while maintaining quality.  We don’t hide behind a non-profit orientation that doesn’t call for efficiency.

Other successful CDFIs will present their secrets to success at future meetings – Working Solutions, Opportunity Fund, Fresno CDFI, to name a few. Please RSVP for our next call on Wednesday July 15 from 1:30 – 2:30pm.

Best Practices: Cash Flow and Balance Sheets

Register for our last MLA Best Practice Webinar on  July 8 – Balance Sheets Part II.  You will gain an understanding of how management decisions impact the balance sheet so trainers can steer clients in the right direction.

You can watch the other three webinars in the series online (just click on the title)

Technology: MMS Update – New Lender

A big hearty welcome to Economic Development and Finance Corporation of Mendocino.

John Kuhry, Executive Director of EDFC, was initiated into the wonders of LiftFund’s (formerly Accion Texas) Microlending Management System on May 13, 2015.  John wants MMS to underwrite his deals so he can focus on increasing capitalization and outreach.

EDFC has historically been a small business lender with an average deal size of $60,000.  They will be the first MMS user in the CAMEO group to use the system for bigger deals up to $250,000.  But he is also looking forward to building up his microloan portfolio, now that he has MMS to help.

Contact Susan Brown if you’re interested in learning more or participating.

Research: Crowdfunding by the Numbers

Dr. Richard Swart directs the research program in Entrepreneurial and Social Finance at UC Berkeley. He also is a partner and directs research for Crowdfund Capital Advisors, the world’s leading advisory firm in Crowdfunding and Alternative Finance.

He spoke at the CrowdFunding Beat Conference in 2014.  He shares his observations on crowdfunding activity and where the challenges and opportunity lie. His first observation is crowdfunding “is an extremely successful and viable way of funding low-risk equity investment into microenterprises.” Start the video at 4:00.

Also, the SBA recently published an Issue Brief – “Equity-based Crowdfunding: Potential Implications for Small Business Capital“.

Demystify crowdfunding with this primer.

News

Micro Lending Academy: Balance Sheet Basics

Balance Sheet Basics

We don’t often get to analyze Balance Sheets with our microenterprise clients, but it’s important for all business consultants and trainers to understand them to provide quality advice on cash management, structuring debt, inventory management and much more. This webinar, the first of a two-part series, will be an introduction to Balance Sheets accounts, what they mean and how they work together. We have a fun exercise (you can use it in your classes!) that demonstrates how the Balance Sheet changes with each business transaction. We’ll also take a read on what additional Balance Sheet topics the group would like for the “Balance Sheets Part II” webinar in July.

Watch and listen to the webinar (65 minutes)

About the Presenter

SusanBrownSusan Brown is a Business & Community Development Specialist with a specific focus on Business Finance and Rural Microenterprise. CAMEO engaged Susan to implement our Rural Initiative in 2008 and is now managing our partnerships with Kiva and LiftFund’s MMS platform. Through her consulting service Susan provides strategic planning, facilitation, program development and grant writing services to non-profit organizations and government agencies as well as consulting services to small business owners.

A Banker’s Perspective: Fred Mendez of Union Bank

Fred Mendez, long known as a champion of micro business development and lending in California, recently assumed the position of Managing Director of Corporate Social Responsibility for the Americas for MUFG Union Bank, NA. Previous to taking on this exciting new role, Fred ran the Community Development program for Rabobank for 8 years, creating a legacy of innovation in expanding small business lending in under-served rural regions.

Fred agreed to talk with Claudia Viek, our CEO, about his new job. He was also willing to share his perspective on opportunities confronting CDFIs doing small business lending to LMI borrowers and why he thinks they should take more risk in this market.

Claudia Viek: Now that Union Bank has expanded into not only a national, but global arena, tell us what your role entails in promoting corporate social responsibility [CSR].

Fred Mendez: Right now I am managing all the outreach staff for the Foundation as well as the Corporate Communication and Government Affairs staff. I see my role as a bridge between everything a global bank has to offer in terms of products and services, and the needs of the communities where we have a presence – from Canada to Argentina. I hope to define what CSR can mean in the whole of the bank, but always keeping in mind the importance of supporting and strengthening processes in the U.S., of course. For example, we would like to explore how to open more TRAC [Technical Resource and Assistance Center] centers, such as we did in Fresno. And we are really excited about the branches we have opened in three high schools where we also offer financial capability training.

CV: What is your take on current opportunities for nonprofit CDFIs that do microlending?

FM: Speaking pragmatically, borrowers are engaging in the disruptive, online lending, so CDFIs need to connect more with these disruptors, these platforms. While banks will continue to provide capital funding to CDFIs, banks are limited in how innovative they can be, and can’t easily reach the micro borrower. CDFIs need to look beyond banks and towards virtual and customized products and find a way to provide financial education and credit technical assistance as their value added.

CV: Can you suggest ways CDFIs can better reach Low-Mod Income borrowers?

FM: Boy, I’d love to see the State Loan Guarantee Program, the FDCs, cover the total capital investment, the EQ2s, rather than just individual loans to borrowers. It would increase efficiency and allow CDFIs to take more risk. Let’s remember that CDFIs are chartered to take more risk and more losses than conventional lenders. Also, banks could be serving more high-risk markets, served by the FDCs, because these loans have performed extremely well.