AEO Calls for Full Funding of Program for Investment in Microenterprise (PRIME).Applauds Obama Administration's Support of Microentrepreneurs
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 microcredit, the extension to poor individuals of small loans to be used for income-generating activities that will improve the borrowers' living standards. The loans, which may be as little as $20 for very poor borrowers in some developing countries, typically are services to nascent businesses across the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. .
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 (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. 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 support services Psychology Non-health care-related ancillary services–eg, transportation, financial aid, support groups, homemaker services, respite services, and other 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 (Return On Investment) The monetary benefits derived from having spent money on developing or revising a system. In the IT world, there are more ways to compute ROI than Carter has liver pills (and for those of you who never heard of that expression, it means a lot). 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 SBA
Small Business Administration
Noun 1. SBA - an independent agency of the United States government that protects the interests of small businesses and ensures that they receive a fair share of government ) on behalf of microenterprise:
* Re-instate PRIME to all 50 states, the District of Columbia District of Columbia, federal district (2000 pop. 572,059, a 5.7% decrease in population since the 1990 census), 69 sq mi (179 sq km), on the east bank of the Potomac River, coextensive with the city of Washington, D.C. (the capital of the United States). and Puerto Rico Puerto Rico (pwār`tō rē`kō), island (2005 est. pop. 3,917,000), 3,508 sq mi (9,086 sq km), West Indies, c.1,000 mi (1,610 km) SE of Miami, Fla. ;
* Make SBA microloan mi·cro·loan
A very small, often short-term loan made to an impoverished entrepreneur, as in an underdeveloped country. technical assistance funds more accessible to non profit financial intermediaries Financial intermediaries
institution that provide the market function of matching borrowers and lenders or traders. 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.