Kaine announces expanded opportunities for microbusiness loans
Gov. Timothy M. Kaine on Thursday announced that the Virginia Department of Housing and Community Development (DHCD) will provide three Regional Service Providers (RSP) with up to $108,000 each for their microenterprise efforts through the agency’s Virginia Enterprise Initiative (VEI) program. The organizations – ECDC Enterprise Development Group (Arlington), New Visions New Ventures (Richmond), and People Inc. Financial Services (Abingdon) – will provide entrepreneurial resources such as credit, capital, training and technical support to underserved entrepreneurs to start and expand their businesses.
“Today we see more and more business owners affected by decreasing access to credit, and turning to their local micro-enterprise organization for loans for payroll, supplies and overhead,” Gov. Kaine said. “With the funding they receive from VEI, service providers will be able to provide loans and training for these small-business owners to help them navigate through these rough times. The focus of this program is on creating jobs, and we are committed to meeting this goal.”
Microbusinesses are the smallest of the small businesses, defined as those with five or fewer employees and less than $35,000 in capital needs. Additionally, as the U.S. unemployment rate has reached 9 percent, more Americans are deciding that now is the time to become their own boss and start their own business. Through funding from VEI, regional service providers will provide training and loans to current and potential micro-business owners, developing business plans and providing loans averaging $8,000.
In the wake of the 2001 recession, Americans created nearly 900,000 jobs per year – through 2005 – by starting their own business. Today, this trend continues, and many Americans are turning to microenterprise nonprofit organizations to start or expand their microbusinesses.
In Virginia nearly 800,000 workers are employed by firms with fewer than five employees, representing 15.6 percent of the workforce. Nationally, micro-enterprises account for nearly 18 percent of all private employment and 87 percent of all businesses, according to the Association for Enterprise Opportunity (AOE).
VEI, established in 1995, ties funding to RSPs to three primary outcomes: jobs created, businesses/business plans created, and number of loans made. In fiscal years 2007 and 2008, VEI has seen the creation and retention of 2,126 jobs, 832 businesses created and/or strengthened, and 363 microloans made.
For more information on DHCD or VEI, visit: www.dhcd.virginia.gov.
– News Release