AEO Calls for Full Funding of Program for Investment in Microenterprise (PRIME).
ARLINGTON, Va. -- In an effort to grow the number of entrepreneurs across the country, the Association for Enterprise Opportunity (AEO), the national association representing microenterprise development organizations, is calling on Congress to fully fund PRIME (Program for Investment in Microenterprise), which provides federal dollars for intensive training, technical assistance and microcredit services to nascent businesses across the United States.
If fully funded, PRIME would create and retain over 18,300 jobs annually in low-income rural and inner city communities at a cost of approximately $830 per job.
"Microenterprise is an important solution to the country's efforts to recover from the current economic crisis," said AEO President and CEO Connie Evans. "The inability to obtain credit, coupled with rising unemployment, has resulted in a sharp increase in demand for small business training and entrepreneurial support services in rural and urban areas. With proper funding, AEO and the U.S. microenterprise development industry will transform this demand into new businesses and new jobs."
Microenterprises are defined as U.S. businesses that require seed money of $35,000 or less. They represent 87% of all U.S. businesses and are responsible for one-third of all new jobs created. During the 2002 recession, microenterprise jobs grew by 3.4%, while total U.S. jobs declined 3%. As with the previous recession, much of the increased demand for small business assistance is from laid off workers seeking to launch their own businesses as an alternative to unemployment, and existing business owners cut off from business credit normally provided by traditional banks.
PRIME funding is specifically targeted to low-income entrepreneurs. Continued Evans, "We know PRIME grants are effective job creation tools that provide significant ROI to the economy - as much as $2.72 for every dollar invested. We are pleased by the renewed focus on microenterprise by President Obama and respectfully request that Congress fully fund this important component of American small business."
President Obama's FY2010 budget includes $3.1 million for PRIME technical assistance. PRIME is fully funded at $15 million.
In addition to PRIME, AEO members benefit from a range of other federally funded programs. Among the other requests that AEO made to the U.S. Small Business Administration (SBA) on behalf of microenterprise:
* Re-instate PRIME to all 50 states, the District of Columbia and Puerto Rico;
* Make SBA microloan technical assistance funds more accessible to non profit financial intermediaries that offer loans to microentrepreneurs;
* Increase the maximum loan that SBA intermediaries may provide entrepreneurs to $75,000 from the current $35,000;
* Raise the permissible funding limit for the highest performing SBA-approved microlenders to $5 million from the $3.5 million permissible today; and
* Partner with AEO to increase the number of intermediaries, create a technical assistance program and provide extra assistance to underperforming intermediaries.
About Association for Enterprise Opportunity
AEO is the national leadership organization and voice for the U.S. microenterprise development movement. AEO represents more than 400 microenterprise development associations who are committed to achieving sustainable, robust development of microenterprise in the U.S. and to helping aspiring and existing entrepreneurs gain the technical knowledge, business training and funding necessary to launch or expand their businesses. For more information about AEO, please visit our website at www.microenterpriseworks.org.
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|Date:||May 14, 2009|
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