AN ACT ESTABLISHING A PILOT MICROLOAN PROGRAM FOR MICROENTERPRISES.

This bill establishes a pilot program to help new and existing very small businesses (i. e. , microenterprises) obtain the technical and financial resources they need to grow. The program does this by relying on existing organizations that specialize in helping small businesses identify their needs and finding the appropriate public or private programs to address those needs (microloan generating organizations).

The bill establishes the program by requiring the economic and community development commissioner to make a grant to the nonprofit Community Economic Development Fund (CEDF), which must disperse it to microloan generating organizations that meet the bill's criteria. The bill requires the commissioner to report on its status and results to the Commerce Committee by June 30, 2007.

Under the bill, CEDF must allocate the grant to microloan generating organizations. In doing so, CEDF must consider:

1. where an organization receives its operating funds and whether they are sufficient,

2. the extent to which the organization can provide the services the bill calls for, and

3. the organization's success in helping small businesses apply for and receive assistance from programs similar to the pilot program.

The bill requires micrcoloan generating organizations to use the grants to help microenterprises obtain business loans (i. e. , microloan applicants). In doing so, an organization must use the grant to:

1. identify appropriate microloan applicants throughout the state,

2. evaluate the need for the product or service in the community where the applicant operates or proposes to operate,

3. evaluate the extent to which the community supports that business,

4. work with other public and private organizations to help the applicant prepare and complete its business plan,

5. help prospective applicants identify and access technical and financial assistance from other organizations,

6. track the services the organization provides to clients and measure the results,

7. promote microenterprises, and

8. coordinate the way other microenterprise support organizations deliver services to microenterprises.

Microloan generating organizations may use the grants to assist only microenterprises, which are new or existing businesses employing 10 or fewer people and grossing less than $ 500,000 a year. These enterprises include those based in homes and those operated by the owner.

Established by law in 1993, CEDF helps economically distressed neighborhoods develop businesses and create jobs. It does this by making and guaranteeing loans to small businesses, including microenterprises.

Yea

Nay

(03/14/2006)

Yea

Nay

(03/31/2006)