Agenda Item 7C
April 18, 2017
Action
MEMORANDUM
April 14, 2017
TO:
FROM:
SUBJECT:
County Council
rv1
~
Josh Hamlin, Legislative
Attome~
Action:
Bill 49-16, Economic Development - Workforce Development -
Microlending Program
Planning, Housing and Economic Development Committee recommendation
(3-0):
Enact Bill 49-16 with amendments.
Bill 49-16, Economic Development - Workforce Development - Microlending Program,
sponsored by Lead Sponsors Council President Berliner and Councilmembers Navarro and
Hucker, and Co-Sponsors Councilmembers Floreen, Rice, EIrich, Katz and Council Vice­
President Riemer was introduced on December 13,2016. A public hearing was held on January
24 and a Planning, Housing and Economic Development Committee worksession was held on
March 6.
Bill 49-16 would:
• provide that the County's Workforce Development Corporation must administer a
micro lending program to provide financial and technical assistance to County
entrepreneurs;
• establish certain criteria for the operation ofthe micro lending program;
• require the Corporation's annual report to include certain information on the
micro lending program; and
• generally amend County law related to workforce development.
A memorandum from the Bill's lead sponsors is at ©8-9.
Committee-Recommended Bill
The PHED Committee recommends (3-0) enactment of the Bill with amendments. The
substance of the Committee amendments is as follows:
1.
Provide that the' micro lending program be administered by the County's Economic
Development Corporation as part of a microenterprise development strategy, rather
than the Workforce Development Corporation as originally proposed (©2-3, lines 18­
33 and 41-49);
2.
Provide that the Corporation may, rather than must, administer the microlending
program (©2, line 18); and
3.
Limit loans in the program to those without other access to capital (©2, line 27).
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Background
Under County Code Chapter 30B, Economic Development, the County is empowered to
designate a nonprofit corporation as the County's Workforce Development Corporation to
implement the County's workforce development policies. WorkSource Montgomery, Inc.
(WSM), has been so designated, and has as its mission:
(1)
to meet the talent attraction,
development, and retention needs of strategic industries; (2) to meet the needs of the
underemployed and unemployed; and (3) to develop career pathways that lead to sustainable wage
jobs and support a thriving mission.] Bill 49-16 would add the administration of a microlending
program to the responsibilities of the Workforce Development Corporation.
Under the micro lending program required under Bill 49-16, County residents with
businesses headquartered in the County would be eligible for loans of up to $15,000
("microloans"). Loan recipients would be required to participate in educational and technical
assistance that would be part ofthe program. The program could use non-County funds for capital
and program administration, and materials and assistance would have to be provided in multiple
languages. WSM would have to report on the status ofthe microlending program each year as part
of its annual report to the Executive and Council.
Public Hearing and Correspondence
There were eight speakers at the public hearing on the Bill held on January 24. Assistant
Chief Administrative Officer Lily Qi spoke on behalf of the Executive and, while applauding the
Council's desire to foster the growth of microenterprises, but expressed the view that success
would require a "more holistic approach" (©16-17). She questioned whether a microlending
program would be primarily a jobs program, or an entrepreneurial tool, and indicated the
Executive's preference that the Montgomery County Economic Development Corporation develop
a broader microenterprise strategy. The remaining seven speakers all spoke in support of the Bill.
Karen Miranda spoke of the importance of obtaining a microloan in growing her business
(©18). Angela Franco, of the Greater Washington Hispanic Chamber of Commerce, spoke in
support of a micro lending program, emphasizing the need for education and support of
entrepreneurs before and after they receive loans (©19-20). Isis Salmeron of the Latino Economic
Development Center also voiced support for the Bill, but suggested reconsidering the $15,000 limit
on loans in the program (©2l-22). Jayne Park, Executive Director of IMPACT Silver Spring
supported the Bill as a step in the direction of fully supporting and enabling locally-owned
businesses to thrive (©23-24).
Laura Wallace of Jews United for Justice noted that a microloan program would be critical
in helping workers move out of low-wage jobs and sustain their families by starting and
maintaining micro-businesses (©25). Life Asset Executive Director Markus Larsson offered
support for the Bill, highlighting the benefits of very small loans to entrepreneurs who otherwise
may not have access to capital (©26-28). Mr. Larsson answered several questions from
Councilmembers, and described the way Life Asset's loan program works. LaD on Love James,
owner of Lens and Love Photography and Life Asset member/participant, described her experience
to demonstrate the importance of microloans ©29). Rockville Economic Development, Inc. sent a
1
This
mission is consistent with the Policy Objectives of the County Workforce Development Corporation set forth
in
§30B-S.
2
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letter of support for the Bill, but suggested having the program administered by the Montgomery
County Economic Development Corporation (MCEDC) (©30).
Issues / Committee Recommendations
1.
How would the microlending program work?
Bill 49-16 would require WSM to administer a program that provides loans of up to
$15,000 to eligible applicants. WSM does not need to be the lender, and it is anticipated that WSM
would contract with one or more non-profits to operate the program. At the public hearing, Life
Asset and the Latino Economic Development Center (LEDC), spoke about how their microlending
programs functioned.
Life Asset's program is modeled after the Grameen Bank lending model.
2
The program
provides business training and small loans to entrepreneurs who have difficulty getting loans from
traditional banks.
3
Over 150 business loans have been made through the program, with over 98
percent payback rate. LEDC has been providing small loans ($50,000 or less) and technical
assistance to entrepreneurs and small businesses since 1997.
4
Background information on LEDC's
program is at ©31-32.
The County's Department of Economic Development implemented a "Micro-Enterprise
Loan Program" in FY08 to provide qualifying micro-enterprises with access to capital (see
Program Summary at ©33-34). The program was funded with $150,000 set aside from DED's
Small Business Revolving Loan Program budget, and provided direct loans to businesses with
gross revenues of less than $250,000 annually and fewer than five full-time equivalent employees.
The program struggled to attract credit-worthy applicants; in FY08 and FY09, a total of five loans
were made from the program. The program was discontinued after FY09. The program
administered pursuant to Bill 49-16 would differ in that it would utilize organizations already
operating and succeeding in the micro lending field, rather than have the County provide a similar
service.
2.
What would be the fiscal and economic impact of the program?
The Office of Management and Budget estimates that the County would, through WSM,
spend $572,000 on the implementation of Bill 49-16's microlending program over its first six years
(see ©11-13). This includes first-year funding of$312,000to launch the program, with much lower
costs, equally divided between program support and loan fund replenishment in subsequent years.
The Bill would not have an impact on revenues. The Department of Finance estimates that the
economic impact of the Bill would be minimal.
After the PRED worksession, Council staffmet with representatives of MCEDC to discuss
the Committee's recommendation that the Bill be amended to authorize MCEDC to administer the
program. In a follow-up letter to the Council (©42-43), MCEDC estimated that its cost to
administer the program would be $48,000. Of this, $18,000 would be incurred for the solicitation
and selection of a partner or partners to operate the program, and $30,000 would be dedicated to
http://grameenresearch.org/grameen-group-lending-model!
3
http://www.lifeasset.orgfour-programs!
4
http://Iedcmetro.orglour-programs/microlending
2
3
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ongoing partner management and program marketing. Assuming that the solicitation and selection
of partners would not be an annual expense, the annual cost after year one of the program would
be closer to the $30,000 number.
3.
Is
Worksource Montgomery the best-situated entity to administer the program?
At the public hearing, Lily Qi, speaking on behalf of the Executive, questioned whether
WSM was best suited to administer the program. At issue is whether a microlending program
would primarily be a jobs program or an entrepreneurial tool that would appropriately be part of
an economic development strategy focused on microenterprises. Council staff believes that the
program would fit within the mission of either WSM or the Montgomery County Economic
Development Corporation (MCEDC).
5
MCEDC has a broad mandate, and is charged with implementing the County's economic
development programs and activities.
6
More specifically, it is incorporated for the purpose of
serving as the County's Economic Development Corporation and implementing the County's
economic development strategic plan, adopted under §20-76 of the County Code, and related
programs.
7
WSM, as the County's workforce development corporation, has a much narrower
focus. WSM is responsible for the implementation of County workforce development policies
aimed at:
(l)
meeting the talent attraction, development, and retention needs ofstrategic industries;
(2) meeting the needs of the underemployed and unemployed; and (3) developing career pathways
that lead to sustainable wage jobs to support a thriving economy.8
Implementation of a micro loan program is consistent with the responsibilities of both
MCEDC and WSM. However, if the program is part of a broader micro enterprise strategy, as is
the Executive's stated preference, MCEDC, with its broader focus, may be a more appropriate
administrator of the program. Administration by MCEDC could provide opportunities for
synergistic business relationships between microenterprises served by the microloan program and
larger businesses operating in the County. David Petr, President and CEO of MCEDC has
submitted a letter in support of the micro loan program, and in support of the program being
administered by MCEDC (©35). The Executive also submitted a statement in support ofthe Bill
with amendments to have the program administered by MCEDC (©41).
MCEDC is Montgomery County's designated Economic Development Corporation under Article I of Chapter 30B
of the County Code.
6
County Code §30B-l.
7
County Code §30B-4(a)(3) provides that these programs must include:
(A) attracting and retaining businesses;
(B) facilitating economic, industrial, and commercial development in the County;
(C)
encouraging investment in commerce, industries, and businesses in the County;
(D) promoting job growth and talent attraction, in coordination with the Montgomery County Workforce
Development Board;
(E) advising and informing County officials on economic development matters;
(F) providing services to resident businesses in the County, including business retention, counseling, business
planning, and other services to maintain and grow the existing economic base;
(G) stimulating and nurturing the development of new business;
(H) supporting minority, female, and disabled owned businesses, including assisting minority, female, and
disabled owned businesses to gain access to capital; and
(I)
promoting the development of a vital and balanced economy.
8
County Code §30B-S.
5
4
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4.
Committee Recommendations
At its March 6 worksession, the PHED Committee discussed whether WSM or MCEDC
was the best entity to administer the program. The Committee recommended (3-0) to amend the
Bill to have MCEDC administer the program "as part of a microenterprise development strategy."
These amendments delete all changes to Article II (Workforce Development) of Chapter 30B in
the Bill, and add virtually identical amendments to Article I (Economic Development Corporation)
ofthe Chapter.
The Committee also discussed whether administration ofthe program should be mandatory
or discretionary, given the fact that its operation would be dependent on County budget
appropriation. The Committee recommended (3-0) to provide that MCEDC "may" administer the
program, a change from the introduced Bill's "must" administer language.
9
Finally, the Committee directed staff to recommend language that would focus the program
on serving entrepreneurs that are otherwise unable to secure necessary capital to maintain or
expand their businesses. The staff-recommended language is at ©2, line 27, and would add to the
residency and business location requirements for loan recipients a requirement that loans be made
only to those who "lack access to traditional means of capital financing."
The PHED Committee recommended (3-0) enactment of the Bill with the above
amendments.
This packet contains:
Bill 49-16
Legislative Request Report
Bill Sponsors' Memo
Fiscal and Economic Impact statement
Public Hearing Testimony
Lily Qi
Karen Miranda
Angela Franco
Isis Salmeron
Jayne Park
Laura Wallace
Markus Larsson
LaDon Love James
Rockville Economic Development, Inc. letter of support
LEDC Micro-lending Program Background Information
DED Micro-Enterprise Loan Program Summary
MCEDC letter of support
Possible amendments
County Executive Statement
MCEDC letter, April 7,2017
F:\LA
W\B
ILLS\1649 Workforce Development - Microlending\Action Memo.Docx
Circle #
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41
42
9
Compare the "Corporation may administer ..." at ©2, line 18 with "Workforce Development Corporation must
administer ..." at
©4,
line 77.
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Bill No.
49-16
Concerning: Economic
Development-
Microlending Program
Revised:
03/06/2017
Draft No. =-2_ __
Introduced:
December
13, 2016
Expires:
June
13, 2018
Enacted: _ _ _ _ _ _ _ _ __
Executive: _ _ _ _ _ _ _ __
Effective: _ _ _ _ _ _ _ _ __
Sunset Date: -'N:...:.;o=n=e_ _ _ _ __
Ch. _ _, Laws of Mont. Co. _ __
COUNTY COUNCIL
FOR MONTGOMERY COUNTY, MARYLAND
Lead Sponsors: Council President Berliner and Councilmembers Navarro and Hucker
Co-Sponsors: Councilmembers Floreen, Rice, EIrich, Katz and Council Vice-President Riemer
AN
ACT to:
(1)
(2)
(3)
(4)
provide that the County's [[Workforce Development]] Economic Development
Corporation [[must]] may administer a micro lending program to provide financial and
technical assistance to County entrepreneurs;
establish certain criteria for the operation of the micro lending program;
require the Corporation's annual report to include certain information on the
micro lending program; and
generally amend County law related to workforce development.
By amending
Montgomery County Code
Chapter 30B, Economic DeVelopment
Article [[II, Workforce Development]]
I.
Economic Development
Sections [[30B-8, 30B-12 and 30B-14]] 30B-5 and 30B-7
Boldface
Underlining
[Single boldface brackets]
Double underlining
[[Double boldface brackets]]
* * *
Heading or defined term.
Added to existing law by original bill.
Deletedfrom existing law by original bill.
Added by amendment.
Deletedfrom existing law or the bill by amendment.
Existing law unaffected by bill.
The County Council for Montgomery County, Maryland approves the following Act.'
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BILL No.
49-16
1
Sec.
1.
Sections [(30B-8, 30B-12 and 30B-14]] 30B-5 and 30B-7 are
amended as follows:
ARTICLE I. ECONOMIC DEVELOPMENT CORPORATION.
2
3
4
5
*
(
a)
*
*
Sec. 30B-5. Economic development program.
6
The Board of Directors must recommend economIC development
programs and associated performance measures to the Executive and
Council each year to advance the policy objectives and perform the
activities listed in Section 30B-l, including revisions to the County's
strategic plan for economic development established by Section 20-76(a).
7
8
9
10
11
(b)
In its economic development programs, the Corporation should
collaborate with the Montgomery County Workforce Development
Board to advance the County's economic development strategic plan
adopted under Section 20-76.
12
13
14
15
16
(c)
The Corporation's economic development programs may include a plan
for sponsorship of private investment, marketing, and advocacy
initiatives.
17
18
19
20
(
d)
The Comoration may administer. as part of a microentemrise
development strategy, a culturally proficient microlending program
under which:
21"
22
23
ill
(Zl
loans must not exceed $15,000;
loans must only be issued to Montgomery County residents:
CA)
who have resided in Montgomery County for at least 180
days before the loan application is made;
24
25
au
~
whose business is headquartered in Montgomery County;
and
lack access to traditional means of capital financing;
G)t:\Iaw\biIlS\1649 worKforce development - microlending\biIl2.docx
26
27
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BILL
No.
49-16
28
ill
ill
ill
ill
loan recipients must participate in educational and technical
assistance provided by the program;
non-County funds may be used as a source for capital and program
administration; and
materials and assistance are provided m multiple languages
reflective of the County's population.
29
30
31
32
33
34
35
36
37
38
39
40
41
The Board and staff must meet with the Executive and the Council at least
annually regarding the Corporation's activities and fmances.
*
30B-7. Report.
*
*
The Board of Directors must report annually on the activities and fmances of
the Corporation and provide an audited fmancial statement of the Corporation to the
Executive and Council by November 1 of each year. The report must also
include~
W
the Corporation'splan to solicit and receive additional public and private
funding for its operations; and
42
43
44
au
information on the microlending program including:
ill
the number of microloans issued during the prior fiscal year by
dollar value of the loan:
45
46
ru
ill
ill
ill
a description of the how each loan was used:
loan repayments received;
the rate of repayment and
non-County funds leveraged to support the program.
47
48
49
50
ARTICLE II. WORKFORCE DEVELOPMENT.
30B-S. Policy objectives.
51
52
53
(a)
The success of Montgomery County's economic development goals is
dependent upon a comprehensive and demand-driven system of
workforce development that:
54
o
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BILL
No. 49-16
55
56
57
58
59
60
(1)
meets the talent attraction, development, and retention needs of
strategic industries;
(2)
(3)
meets the needs ofthe underemployed and unemployed; [and] and
develops career pathways that lead to sustainable wage jobs to
support a thriving
economy[[~
and
ill
provides financial and technical assistance through micro loans to
County entrepreneurs to develop or expand small businesses in the
County]].
61
62
63
64
(b)
To achieve these goals, the County Government may designate a
nonprofit corporation as the County's Workforce Development
Corporation to implement the County's workforce development policies
established by the Workforce Development Board.
65
66
67
*
(a)
*
*
68
69
70
71
72
73
74
75
76
77
78
79
Sec. 30B-12. Workforce development program.
The Workforce Development Corporation's Board of Directors must
recommend
workforce
development
programs
and
associated
performance measures to the Executive, Council, and Workforce
Development Board each year to advance the policy objectives listed in
Section 30B-8.
(b)
The Workforce Development Corporation's workforce development
programs may include a plan for sponsorship of private investment,
marketing, and advocacy initiatives.
(c)
[[The Workforce Development Corporation must administer
~
culturally
proficient microlending program under which:
80
ill
ill
loans must not exceed
$15,000;
loans must only be issued to Montgomery County residents:
G
f:\law\bills\1649 workforce development - microlending\bill 2.docx
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BILL
No. 49-16
81
82
83
84
W
ill)
who have resided in Montgomery County for at least 180
days before the loan application is made; and
whose business is headquartered in Montgomery County;
ill
ill
ill
loan recipients must participate in educational and technical
assistance provided
by
the program;
non-County funds may be used as
~
source for capital and program
administration; and
materials and assistance are provided
reflective of the County's population.
ill
85
86
87
88
89
90
91
multiple languages
@]]
The Workforce Development Corporation's Board and staff must meet
with the Executive, the Council, and the Workforce Development Board
at least annually regarding the Workforce Development Corporation's
activities and finances.
92
93
94
95
96
97
98
99
100
*
30B-14. Report.
*
*
The Workforce Development Corporation's Board of Directors must report
annually on the activities and finances of the Corporation and provide an audited
fmancial statement of the Corporation to the Executive, the Council, and the
Workforce Development Board by November 1 of each year. The report must also
include[[;.]]
101
102
103
104
[[@2]]
the Corporation's plan to solicit and receive additional public and private
funding for its
operations[[~
and
®
information on the microlending program including:
ill
ill
ill
the number of microloans issued during the prior fiscal year
by
dollar value of the loan;
~
105
106
description ofthe how each loan was used;
107
loan repayments received;
o
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BILL
No. 49-16
108
109
110
Approved:
ill
ill
the rate of repayment; and
non-County funds leveraged to support the program]].
111
Roger Berliner, President, County Council
Date
112
Approved:
113
Isiah Leggett, County Executive
Date
114
This is a correct copy ofCouncil action.
115
Linda M. Lauer, Clerk ofthe Council
Date
@f:llaw\biIlS\1649WOrkfOrce development - microlending\bill2.docx
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LEGISLATIVE REQUEST REPORT
Bill 49-16
Economic Development
-
Worliforce Development
-
Microlending
DESCRIPTION:
Bill 49-16 would provide that the County's Workforce Development
Corporation must administer a micro lending program to provide
financial and technical assistance to County entrepreneurs.
Entrepreneurs often lack adequate access to capital even in the small
amounts necessary to start a small business
To increase the ability of County residents to start and expand small
businesses by providing small loans and technical assistance in a
culturally proficient manner to small business owners.
WorkSource Montgomery
To be requested.
To be requested.
To be requested.
To be researched.
Josh Hamlin, Legislative Attorney
To be researched.
PROBLEM:
GOALS AND
OBJECTIVES:
COORDINATION:
FISCAL IMPACT:
ECONOMIC
IMPACT:
EVALUATION:
EXPERIENCE
ELSEWHERE:
SOURCE OF
INFORMATION:
APPLICATION
WITIDN
MUNICIP ALITIES:
PENALTIES:
None
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MONTGOMERY COUNTY COUNCIL
ROCK
VILLE, MAR YLAND
ROGER BERLINER
COUNCILMEMBER
DISTRICT 1
CHAIRMAN
TRANSPORTATION, INFRASTRUCTURE
ENERGY
&
ENVIRONMENT COMMITTEE
MEMORANDUM
December 8, 2016
TO:
FROM:
Council Colleagues
Council President Roger Berliner
Councilmember Nancy Navarro, Chair, GO Committee
Councilmember Tom Hucker
Empowering Entrepreneurship and Economic Well-Being through Microlending
SUBJECT:
At our November 29
th
Council session, we were briefed on the extraordinary progress that WorkSource
Montgomery is making to transform workforce development in Montgomery County into a system that is
focused not just onjob placement for ajob seeker but on talent development, career pathways, and job creation.
Nationally and locally, micro and small local businesses are a driver ofa vibrant economy. These businesses
improve the economic wellbeing and self-sufficiency of our residents, particularly for our immigrant population
who often find themselves in low wage jobs, but have the creativity and desire to own and operate a wide
variety of businesses. This is why we are proposing the establishment of a County microlending program.
Last March, we convened a meeting with the leadership of the principal organizations in our county and
region that are currently working the most in this arena. Those organizations included
Impact Silver Spring, the
Latino Economic Development Center, Life Asset, Blessed Coffee, Crossroad Community Food Network, Asian­
American Homeownership Counseling, the Consumer Health Foundation, the Chinese Culture and Community
Service Center, and the Greater Washington Hispanic Chamber o/Commerce.
During our meeting, those
leaders all expressed the belief that our immigrant entrepreneurs would greatly benefit from a multi-pronged
assistance program - one that provides both the necessary technical assistance and access to microloans that can
help aspiring entrepreneurs turn their dreams into a reality. On its website,
Impact Silver Spring
says the
following:
• Jobs are simply not enough for people to achieve an adequate level of self-sufficiency and quality of life.
• The challenges and barriers that people in our Network encounter in starting their own businesses are
significant. These barriers include the lack of availability of legal and business development support
that is both reliable and geographically and linguistically accessible, and the lack of access to capital for
people with limited income, credit history, and experience with the formal banking system
(emphasis added).
STELLA
B.
WERNER OmCE BUILDING'
100
MARYLAND AVENUE,
6
TH
FLOOR, ROCKVILLE, MARYlAND
240-777-7828
OR
240-777-7900, TTY 240-777-7914, FAX 240-777-7989
WWW.MONTGOMERYCOUNTYMD.GOV
20850
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To that end, we are introducing legislation establishing a microlending program as a program of the
County's Workforce Development Corporation (WorkSource Montgomery). The legislation:
• Limits loans to no more than $15,000, although loans limits could be lower for the first years of the
program. We expect most loans will be in the $500 to $5,000 range.
• Limits loans to Montgomery County residents that headquarter their business in Montgomery County.
• Requires recipients to participate in appropriate educational and technical assistance. We heard loudly
and clearly at our March meeting that this is critical to the recipient's success. Non-profits such as
Life
Asset
and the
Latino Economic Development Center
lend to people with poor credit histories, people
who are currently homeless, and people with a dream and a product or service but limited business
experience, and still have extraordinarily high repayment rates.
• Encourages the program to leverage non-County funds to provide additional capital and operating
resources. Some organizations use crowd funding, foundations, and partnerships with financial
organizations as a source of capital and we hope that County funds can be used to creatively leverage
other resources.
We expect this program will benefit a wide range of energetic entrepreneurs but will be of particular
importance to our budding immigrant entrepreneurs. As you appreciate, many immigrants come to our county
with both the skills and the desire to start small business enterprises or expand the businesses they have begun.
Yet the roadmap to get from where they are to where they need to get to is complicated and completely
unfamiliar to them. Access to the small amount of capital that they may need for things such as a computer,
kitchen equipment, shelving or office furniture is formidable, ifnot totally beyond their reach. We believe our
County can and should playa more direct and aggressive role in bridging those gaps in order to ensure they
have every opportunity to succeed and prosper. We hope you will support us in this effort.
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ROCKVILLE, MARYLAND
MEMORANDUM
January 23, 2017
TO:
FROM:
Roger Berliner, President, County Council
Jennifer A. Hughes, Director, Office
Alexandre A. Espinosa, Director, Department
OfManagemen~dget
ofFin~~~
SUBJECT:
FEIS for Bill 49-16, Economic Development - Workforce Development -
Microlending Program
Please find attached fiscal and economic impact statements for the above­
referenced legislations.
JAH:fz
cc: Bonnie Kirklan4, Assistant Chief Administrative Officer
Lily Qi, Assistant Chief Administrative Officer
Joy Nurmi, Special Assistant to the County Executive
Patrick Lacefield, Director, Public Information Office
Lisa Austin, Offices of the County Executive
Pofen Salem, Office of Management and Budget
Naeem Mia, Office of Management and Budget
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Fiscal Impact Statement
Bill 49-16 - Economic and Workforce Development - Microlending Program
1. Legislative Summary
Bil149-16 requires the County's Workforce Development Corporation, WorkSource
Montgomery, Inc.,
to
provide financial and
tecbnic~
assistance through micro loans
to
County entrepreneurs to develop or expand small businesses in the County.
It
would
provide loans for up to $15,000 to businesses headquartered or residents residing in the
County for at least 180 days before submitting the loan application. The legislation also
requires recipients to participate in the educational and technical assistance program.
2. An estimate of changes
in
County revenues and expenditures regardless of whether
the revenues or expenditures are assumed in the recommended or approved budget.
Includes source of information, assumptions,
~nd
methodologies used.
WorkSource Montgomery, Inc. (WSM) will incur startup costs related to the design and
delivery of this program, including staff time to research and develop the program and
legal consultation
to
establish criteria for the program. Even if WSM partners with
another organization to administer thy program, there will be ongoing costs associated
with contract administration managed by the County.
It
is anticipated that WSM
will
initially request County funding
to
startup and administer the program and seed funding
for loans. The total cost for WSM's first-year funding is estimated to be $312,000 for
launching the program.
Below are the detailed assumptions used to formulate the cost estimate:
Annual
Cost
Operating Expenses
Comment
Seed Funds for loans
$100,000
Target 10 loans at an average of $10,000 each
Outreach
~~W'~£i;lW~~;\~!~:~~:~i'~'~'~~~~f~~i&~~~,~iX~~g~~f~~;~:~~~r!~~;~~t~,!i:~~:~~~~~~,;~~ty!"'}"{':
Total
$312,000
$50 000
,
Program marketing for initial branding and market
research
The proposed legislation does not impact revenues.
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3.
Revenue and expenditure estimates covering at least the next
6
fIScal years.
There is no estimated change to County revenues. Any interest on loans would be rolled
back into the fund.
It is estimated that $100,000 per year for the second year of the program with a gradually
declining requirement, contingent on outside funding being identified and obtained.
Below are the detailed assumptions used to formulate the cost estimate:
Program
Year
County Expenditures
Year 1
312,000
Year 3
75,000
Replenish-
loan fund
100,000
37,500
WSM Program Support
212,000
37,500
_ye~'i{i.:i'/}~.:';:~:::>\:~::>;;t~!~[i96:'P6Q{~\;;~::?:T;~::>?H~~~o:QliO~Wrt:)r~N::';:l,:--;:':;:;~;:;-::>:;');''5?','::':;:;t::;so,dbo'-.
:Y~a:r ~(\:;,
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e ';:
Year 5
25,000
12,500
12,500
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Note: Assumes that the program will be self-sufficient by Year 7.
4.
An
actuarial analysis through the entire amortization period for each bill that would
affect retiree pension or group insurance costs.
The proposed legislation does not affect retiree pensions or group insurance.
S.
An
estimate of expenditures related to County's information technology
(IT)
systems, including Enterprise Resource Planning (ERP) systems. ­
The proposed legislation does not affect IT systems.
6. Later actions that may affect future revenue and expenditures
if
the bill authorizes
_future spending.
­
The proposed legislation does not authorize
future
spending.
7.
An
estimate ofthe staff time needed to implement the bill.
It is estimated that the micro lending program will be added to the existing WorkSource
Montgomery contract where monitoring performance will be on-going basis. Minimal
staff time (less than 0.25 FTE) is expected for implementation ofthe Bill.
8. An explanation of how the addition of new staff responsibilities would affect other
duties.
The WorkSource Montgomery contract is administered by the Office of the County
Executive (CEX) and it is anticipated that additional scope will also be administered by
CEX to provide oversight and ensure success ofthe program. Participation by the
Department of Finance would be minimal
if
needed. There will be minimal impact on
other duties.
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9. An estimate of costs when an additional appropriation
is
needed.
See #2.
An
estimate of $312,000 is needed for design and implementation of the
proposed program.
10. A description of any variable that could affect revenue and cost estimates.
If WorkSource Montgomery
is
able to obtain outside funding sources
to
cover the cost of
starting and administering the program and providing seed funding, there would be
minimal funding required from the County.
If
WorkSource is unable to identify outside funding sources, on-going annual costs would
be significantly higher.
Below is an estimate of on-going costs if outside funding is not obtained:
Operating Expenses
Annual
Cost
Comment
Fund Replenishment
$50,000
Assuming some balance carried over from year to year
In
addition, the cost estimate provided in Question #2 is assumed to offer loans to 10
companies. The numbers of County businesses wishing to participate in this program
would inevitably affect the cost estimate.
11. Ranges of revenue or expenditures that are uncertain or difficult to project.
Not applicable.
12.
If
a bill is likely to have no fiscal impact, why that is the case.
Not applicable.
13.
Ot~er
fiscal impacts or comments.
Not applicable.
14. The following contributed to and concurred with this analysis:
Lily
Qi, Assistant Chief Administrative Officer, Office of County Executive
Judith Stephenson, Office of County Executive
Pofen Salem, Office of Management and Budget
Jennife
Office
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Economic Impact Statement
Bill 49--16, Economic'Development - Workforce Development - Microlending Program
Background:
This legislation would:
• Provide that the County's Workforce Development Corporation must administer a
microlending program to provide fInancial and technical assistance to County
entrepreneurs;
• Establish certain criteria for the operation of the microlending program; and
• Require the Corporation's annual report to include certain information on the
micro lending program.
Bill 49-16 would provide loans for up to $15,000 to businesses or residents headquartered or
residing in the County for at least 180 days before submitting the loan application. The
legislation also requires the recipients to participate in educational and technical assistance.
1. The sources of information, assumptions, and methodologies used.
• The
County's Department of Economic Development Micro Loan Program files from
2007 through 2009; comprised of34 applications and 4 approved micro loans of$1S,000
or less.
• American Economic Association
• Utah
Microenterprise Loan Fund
• Cuyahoga County Department ofDevelopment
2. A description of any variable that could affect the economic impact estimates.
The variables that could impact the estimates are the loan's operating procedures and
approval guidelines, total annual budget for the loan program, amount of the approved loan,
whether the recipients are required to participate in the educational and technical trainings as
a condition of receiving the loan or after receiving the loan, products and services provided
by the loan, and the general success of the funded small businesses in creating and retaining
jobs in the County.
3. The Bill's positive or negative effect,
if
any on employment, spending, savings,
investment, incomes, and property values
in
the County.
Bill 49-16 would have only a minimal effect on the employment, investment, and incomes to
businesses and residents in Montgomery County, unless a significant loan volume of several
hundred
is
approved per fiscal year. The County Department of Economic Development
operated a similarly structur!Xf.Micro Loan Program
as
a sub-program of the Economic
Development Fund from 2007 until 2009. The Program was discontinued due to its lack of
overall effectiveness. According to DED 's past experience, applicants had limited resources
and the loans were not large enough to have a significant impact. While limited, this past
experience suggests the economic impact ofthis
Bill
would be minimal.
Page
1
of2
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Economic Impact Statement
BiU 49-16, Economic Development - Workforce Development - Microlending Program
The measures of success and economic benefits of microloan programs have been debated
academically.
A
recent study of microcredit programs in several developing countries
reveals that the programs had little
to
no effect on the incomes of participants.
1
Examples of
programs in this country include the microenterprise loan funds of Utah and Cuyahoga
County
in
Ohio. Each of these programs offer loans up to $50,000, and have helped
individuals with low to moderate incomes supplement their earnings through ownership and
operation of their own small business.
2
4.
If
a
Bill
is likely to have no economic impact, why is that the case?
Bill 49-16
could have a minimal economic impact as stated in
#3.
5.
The following contributed to or concurred with this analysis: David Platt, Peter Bang,
Dennis Hetman, and Robert Hagedoorn, Finance.
I(~;},~, ,L,~N
Alexandre A. Espinosa, Director
Department of Finance
I
Date
Abhijit, Dean Karlan and Jonathan Zinman. 2015. "Six Randomized Evaluations of Microcredit:
Introduction and Further Steps." American Economic Journal: Applied Economics, 7(1): 1-21.
Inna 2014. "Economic
&
Community Development Institute Microenterprise Loan Program 2103-2104
Report" Cuyahoga County, OR
2
Kinney,
1
Banerjee,
Page 2 of2
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TESTIMONY ON BEHALF OF COUNTY EXECUTIVE ISIAH LEGGETI
ON BILL 49-16, ECONOMIC DEVELOP:MENT - WORKFORCE DEVELOP:MENT ­
MICROLENDING PROGRAM
January 24, 2017
Good afternoon Council President Berliner and Members of the County Council. I
am Lily Qi, Assistant Chief Administrative Officer, and I am here to offer
commentary on Bill 49-16 on behalf of County Executive Leggett.
We applaud the County Council's desire to grow microenterprises, and we fully
understand the need to empower the under-served communities to fulfill their
American dreams. However, we believe a successful rnicrolending program would
require a more holistic approach that takes into consideration the County's past
experiences in implementing a similar program.
A review of the County's previous efforts to provide financial assistance to
micro enterprises and small businesses show a number of challenges in designing a
program that addresses this need.
In
fact, 10 years ago, the former Department of
Economic Development started a very similar micro lending program that was
discontinued after just two years and only five successful loans. We want to make
sure the new program addresses some of the underlying issues so that it would
truly be an effective and successful economic development and empowerment tool.
First, there needs to be a cl.ear understanding of whether the micro lending program
is either primarily a jobs program or an entrepreneurial tool to start a
microenterprise. Placing it in WorkSource Montgomery certainly reinforces the
notion that it is a jobs program. We believe a microenterprise is still a business and
should be afforded appropriate services designed to ensure business success.
Second, a micro lending program supported by public funds should be designed to
ensure that a loan recipient has the support needed to establish sustainable
businesses. Programs are more likely to succeed when the organization
administering them or supervising them has the appropriate expertise and
capabilities such as experience with lending and underwriting and a system to
properly administer loans.
Third, it is imperative to fully understand what it costs to administer the program.
The actual cost of administering such a program can be significantly higher than
the loan size, as it takes the same amount of due diligence to underwrite a $5,000
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loan as it does a $15,000 loan.
In
the case of small loans of just a few thousand
dollars, the administrative cost could easily exceed the actual loan amount, not to
mention the high likelihood of default due to that fact that many of the recipients
who need such a program tend to be those who would not qualify for traditional
lending mechanisms.
For these reasons, we believe a better approach is to have the Montgomery County
Economic Development Corporation CEDC) convene a group of partner
organizations to develop a cohesive micro enterprise approach that advances the
County's economic development and economic empowerment objectives.
It
can be
administered by a community partner but with the EDC's involvement and
support. In fact, there is a strong desire in the small business and minority
communities to understand how they can work with the new EDC. W orkSource
Montgomery would still be a partner in the development and implementation of
training UIider the program.
Growing microenterprises is a worthy strategy that is also recommended by the
Comprehensive Economic Strategy adopted by the Council. We want to make sure
it is done in a way that best leverages existing programs, partners and resources
and is led by the appropriate agency whose primary mission aligns best with the
Bill's intended beneficiaries-those who run microenterprises in Montgomery
County or those who want to start a micro enterprise here.
Thank you for your consideration.
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January 24, 2017
Good afternoon!
My name is Karen Miranda, I was born in El Salvador. I arrived to this country 5 years ago, and my husband
and I moved to Montgomery County 4 years ago. I have been a Businesswoman since I started with Miranda's
Food Service 3 years ago. My company is legally registered and has all licenses demanded by the law.
When I arrived to this country, I had the chance to work in a company related to the food industry. There, it's
where I discovered about the existing great demand by our Hispanic community to buy fresh and traditional
food of our countries, and which has been expanding in other cultures.
Initially, I had the idea of finding a place in order to open a restaurant and catering service, but the high cost
of the rent as well as the requirements demanded by the county made me desist of my idea. However, I kept
searching for options and talking to different people and that's when I decided to buy a small Food Truck.
Thanks to everyone I talked to, I found out how the system of offering food in the construction areas works.
Slowly I got to know some of the project managers and employees. That's how one of the bosses offered me
to sell my food at one of the projects he was on charge in the county of Frederick.
I started offering lunch service to the 3 shifts that the employees of the project had to have lunch. Work was
increasing as some of the clients moved to work at other projects and asked me to follow them with my Food
Service.
That's the reason why I had to hire someone in order to help me. Actually I am offering food service for
breakfast and lunch to 4 projects.
Thanks to these projects I got to know new bosses and one of them talked to me about the opportunity of
offering my food services to a new project that his company is developing in Montgomery County, in the city
of Gaithersburg and in which there will be more than 200 persons working. Therefore I took the decision of
buying a second truck in order to attend this new project. I will as well have to hire another person to help me.
I am here giving my testimony as a county businesswoman, because I want to highlight the importance of
supporting small businesses and organizations such as Life Asset. With their small loans of microcredit and
technical assistance it can make a big impact in our community. I started with a loan of$1500, which allowed
me to arrange everything for my first truck. Recently I got my second loan of $3,000 that allowed me to pay
for the full price of the second truck. Thanks to these loans I have been able to start creating my credit and to
understand it better. All the meetings and training that they offer in their entrepreneurs network helped me to
organize myself and to understand the importance of the administrative part of a business. But the most
important part for me, is that it allowed me to discover a network of hard working women like me that are
here to find better opportunities for themselves and their families. And they are willing to learn and help so
everyone can improve in our small business and achieve to grow and generate more opportunities for us as
owners and of course for those who help us.
The group help model is a way to come together as a community and to learn and teach other about the
experiences that we live everyday in our business.
As a proud businesswoman in Montgomery County, I ask you to keep giving support to organizations such as
Life Asset so that every day we have more tools to improve and serve our community.
Thank you very much.
Karen Miranda
240-504-0975
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greaterwashington
"l"Sraric
ch;1n;~)e(
of
conlrnerce
TESTIMONY BY GREATER WASHINGTON
msp
ANlC CHAMBER OF COMMERCE
FOR
MONTGOMERY COUNTY COUNCIL
Bill 49-16, Economic Development - Workforce Development - Micro lending Program
January 24, 2017
Good afternoon Mr. Roger Berliner, President of the Montgomery County Council, and members of the
Committee.
My name is Angela Franco and I am the President and CEO of the Greater Washington Hispanic Chamber
of Commerce (GWHCC). On behalf of our team, I would like to thank you for the opportunity to be part of
this hearing - alongside such important organizations.
The GWHCC has been working in partnerships with non-profits, businesses, government, and the
community-at-Iarge to build and grow a sustainable business community through our Small Business
Technical Assistance Program across the region with the purpose of generating self-employment and
entrepreneurship.
In 2016 GWHCC hosted 76 business networking and promotional events, including educational activities
such as seminars, webinars, and workshops during the last year, engaging over 780 businesses and
entrepreneurs. [n addition, we conducted technical assistance sessions though local organizations to
improve the region engagement and development.
GWHCC would like to advocate our strong support for the Micro Lending Program. The financial and
technical assistance to the county's entrepreneurs will bolster their education and technical training in
business administration making them more to competitive in the job market, and equip them with the skills
to overcome language barriers and success in a global economy.
[n the small business community, micro loans are taken out for several reasons; a small business owner
may want to secure financing to maintain business operations, invest in equipment, start a new branch, or
any number of other motivations. These micro loans are beneficial for developing businesses, and are easy
to obtain through the multitude of lenders willing to partner with business owners with good credit scores,
stable incomes, and a strong business plan.
However, there is a risk that small business owners may lose all or part of their principal if they lack a
business education, management experience, or do not understand the financial risk of the frequency and
flexibility of payment deadlines.
[ personally worked in the financial industry for over 20 years here in the United States and overseas. [
closed on many loans myself with different financial situations, and that is why [ truly believe that the
success of the legislation and its goals wi II depend on:
I.
The development and follow through of a comprehensive and proper system with procedures in
place for screening and developing clear lending policies.
2. Preparing and educating the entrepreneurs before and after they receive the funding. Financial
education is critical and understanding the rules and regulations here in Montgomery County and
the United States is critical. To share an example, one of the situations [ always encounter when
doing loans was sharing with the Business owner that he had to provide a personal guarantee for
his business loan.
Page
1
of2
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gt~eaterwa5hington
;';sl'ar';c
chalr~"'r'
of
commerce
3. Working closely with the Montgomery County Office of Economic Development. It is critical to
work together as a team, especially now, when there is new leadership and openness to bring new
and successful business to Montgomery County.
We are pleased to see that MONTGOMERY COUNTY COUNCIL remains committed to a comprehensive
outlook with the goals of increasing entrepreneurship and furthering community development.
Thank you for your time and the opportunity to testifY.
Angela Franco
President
&
CEO
Greater Washington Hispanic Chamber of Commerce
afranco@gwhcc.org
www.gwhcc.org
202.728.0352
Page 2 of2
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LATINO
ECONOMIC
DEVELOPMENT CENTER
Stable Housing. ThriYing BusinEsses.
Strong
Communities.
www.ledcmetro.org
@Iedcmetro
January 24, 2017
Good Afternoon. My name is Isis Salmeron and I am a Loan Officer at the Latino Economic
Development Center-LEDC. I am delivering this testimony on behalf of our Executive Director,
Marla Bilonick.
LEDC's mission is to drive the economic and social advancement oflow-to moderate-income
Latinos and other underserved communities in the D.C. and Baltimore Metropolitan Areas by
equipping them with the skills and tools to achieve financial independence and become leaders in
their communities. Based on the belief that economic advancement is an avenue to equality; our
bilingual and multicultural staff of 36 support our clients to own homes, businesses, and their
right to preserving the integrity of their communities. On an annual basis we serve well over
4,000 low to moderate income residents. Scanning all of our programs, the majority of our
clients are Latino (60%) and a sizeable portion are African-AmericanIBlack (30%). The
remaining portions are White/Caucasian and Asian (10%).
LEDC believes in a model of supporting entrepreneurs through technical and financial
assistance. In addition to providing business coaching services, we provide our business clients
with access to micro loans in the amount of $5,000 to $50,000. We also provide smaller loans
between $1,000-$2,000 to help clients build up or repair their credit profiles. Lastly, we offer a
Citizenship Loan in partnership with CASA to defray the cost of the application for U.S.
citizenship.
During fiscal year 2016, we closed over 150 loans, investing almost $2 million in capital into the
communities we serve. Our combined small business technical assistance and lending efforts in
fiscal year 2015 supported/retained 379 full-time jobs, and we estimate has led to the creation of
142 full-time jobs during the 12 months following loan closing and/or assistance provided.
LEDC has served Montgomery County entrepreneurs since our inception 25 years ago in 1991.
Since 2006, for over a decade, we have had a physical office here and are grateful to have had
the County's support throughout that time to serve thousands of County residents with our Small
Business technical assistance, lending, and Housing services. LEDC is the only organization
with a Montgomery County office that is a certified Community Development Financial
Institution (CDFI)---meaning that we are regulated by the U.S. Department of Treasury to serve
as an alternative financial service provider in underserved communities and to individuals who
cannot access the traditional financial system.
Because we are intimately aware of the specific challenges that immigrant and other underserved
populations face when seeking a viable livelihood for themselves and their families in
Montgomery County; we are very pleased to support Bill 49-16, the Economic
DevelopmentlWorkforce Development Microlending Program. LEDC will always support
efforts to expand economic opportunities for our target population and this legislation has the
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potential to do just that by providing additional capital that can be leveraged for entrepreneurial
ventures in Montgomery County. This presents a great opportunity for County entrepreneurs.
We are very grateful to have been consulted, along with other partner organizations here today,
as this legislation was being drafted. We value the openness of Council to receive our input on
the unique challenges our constituents face and we welcome the opportunity to continue
discussing how this program might look in implementation.
LEDC wants to take this opportunity before you here to reconsider language in the legislation
that limits loan size to $15,000 and suggests the average range of loans hover in the $500-$5,000
range.
It
is our belief that this will limit the opportunity for entrepreneurs to actually or
successfully start business ventures and it will eliminate the opportunity for them to hire
employees within a reasonable time period after start-up. If the purpose of this program is to
create jobs, it is arguable that a small loan will neither provide employment for the entrepreneurs
themselves or for others. A small dollar loan can provide individuals with the opportunity to
formalize and legalize a business venture through the attainment of required licenses or permits
and/or through registering or incorporating at the County or State level. However, more capital is
required to purchase equipment, inventory, and/or employ others. Certifying a business does not
equal launching a business, nor does it set up a business to make sales or create jobs.
We would also like to work with the County to discuss how the Worksource Montgomery
Centers can be best positioned to attract entrepreneurs into this program. A marketing campaign
or other initiative will be required to drive entrepreneurs and small business owners to the
Centers to access the program since the current population served by the Centers is jobseekers.
All this being said, LEDC is very pleased to see continued proof that the Council cares about the
constituents we serve. This Bill is testament to the Council's recognition of and commitment to
our diverse community of entrepreneurs who contribute to the economy and character of our
County. We commend you for your forward-thinking and leadership.
Thank you very much for the opportunity to testify and be with you this afternoon.
-Marla Bilonick,
Executive Director
@
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',Mf>+\C~~
1
S~LVER SPRING~' ~--
IMPACT Silver Spring
PO Box 8397
Silver Spring, MD 20907
Phone: (301) 298-5117
www.impactsilverspring.org
Written County Council Testimony in Support of Bill 49-16
Good afternoon. My name is Jayne Park, Executive Director of IMPACT Silver Spring. I am here
to testify in support of bill 49-16. I commend you for the important step you are taking to
strengthen the local economic development system through the launch of a new micro-loan
program.
Various studies show that local businesses provide the foundation for meaningful economic
development, and that communities of color have closed income and wealth inequality fastest
when they own their own businesses. Thus, supporting individuals in increasing financial
security through business ownership is an essential strategy for addressing growing income
inequality, which has become a troubling trend throughout the nation, as well as here in the
st
County. A 2014 report revealed that Montgomery County is approaching the 1 quartile (top
25%) of areas with the largest income inequality gaps in the Country. Current u.S. Census data
estimates that about 75,000 residents live in poverty; of these, the vast proportions are people
of color.
Through our deep engagement work in low-income neighborhoods, IMPACT has supported
many struggling families on empowerment pathways - including supporting several economic­
focused circles and individuals in forming new micro-businesses in the areas of sewing,
catering, landscaping, and home improvement.
Through our work in supporting immigrant micro-entrepreneurs, we have directly experienced
the significant barriers, gaps and challenges that they face in accessing the supports they need
to succeed. The County must prioritize the strengthening of a local economic development
system that supports and enables locally-owned businesses to thrive. This bill is an important
step in this direction, but we need to do much more.
The following are examples of some of the barriers, gaps, and challenges that we hope can be
addressed moving forward:
• As you know, accessing capital is very difficult for people with limited income and/or
credit history. Again, this bill is an important step in addressing this gap, but we
need to continue to expand opportunities in this area. For example, a group of
IMPACT's micro-entrepreneurs have come together to form their own cooperative­
in direct response to the challenges they have encountered in accessing capital.
Each week, they contribute their own money into a shared pool, which their
members can access when business needs arise. In 6 months, they have already
raised over $18,000. We would like to work with the County and others to figure
out how to support this group in formalizing its cooperative structure.
New entrepreneurs, especially immigrants, need support in how to establish and run
their businesses - including obtaining necessary licenses and permits; establishing
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their business as a legal entity; and support with pricing, marketing; and accounting.
Few services ofthis sort are available that are reliable, affordable, and
geographically and linguistically accessible.
• For groups interested in forming worker-owned cooperatives, there is no legal or
technical support available anywhere in Montgomery County. This has proven to be
a significant challenge in our work to support the cooperative I mentioned earlier.
• More efforts and initiatives are needed to support entrepreneurs' ability to connect
to markets to successfully sell their products. Through our network-building
approach, IMPACT will continue to seek ways to facilitate connections to individual
purchasers at the neighborhood level, as well as local institutions including
nonprofits, churches, hospitals, schools, and county government. Related to this
point, a stronger "Buy Local" culture in the County is needed to help local
entrepreneurs compete and succeed.
The members of IMPACT's network stand open and ready to collaborate with you in generating
additional ideas, and co-creating solutions that will enable micro and small businesses to thrive
in Montgomery County. We look forward to being partners with you in moving this important
work forward.
Submitted by:
Jayne Park, Executive Director
IMPACT Silver Spring
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~
January 24, 2017
Laura Wallace
Montgomery County Community Organizer
Jews United for Justice
laura@jufj.org
Testimony in Support of Bill 49-16
My name is Laura Wallace, I live in Montgomery Village in District 2 and I am the Montgomery
County Organizer for Jews United for Justice.
I am testifying iii support of Bill 49-16, which will create a microlending program as a program of
Montgomery County's Workforce Development Corporation.
One of the
~reat
lewish
sa~es,
Maimonides, was a rabbi, physician, and a philosopher, so he
understood both the physical and spiritual needs of the members of his community. In one of his
most famous teachings, he said, "There are eight levels of charity, one above the other. The'
greatest level that has nothing above it is to strengthen the hand of one who has become poor and
give him a gift or loan or create a partnership with him or make up some work for him, so as to
strengthen his hand until he does not need to ask others [for help]."
This teaching stresses the importance of strengthening a person who needs assistance and helping
them attain to self-sufficiency. Maimonides specifically identifies using loans as a tool to give charity
that does not last just a day or a week, but can last a lifetime.
Jews United for Justice supports the goals of this bill to help the underemployed and unemployed of
Montgomery County and to develop pathways that lead to economic opportunity. We also support
the focus on creating opportunities for new immigrants, and applaud the language in the bill calling
for a "culturally proficient program" as well as "materials and assistance to be provided in multiple
languages reflective of the County's population."
This week in the annual cycle of
readin~
from the Torah, we are
readin~
the story of Exodus and
the redemPtion of the lewish people from slavery in
E~pt.
When we read this story, we are
reminded that the lewish people were
stran~ers
in a
stran~e
land.
Bein~ stran~ers
in the
stran~e
land creates
challen~es
of
lan~ua~e,
opportunity, and resources. A
tar~eted
microloan
pro~ram
will
help address these obstacles and provide an avenue for innovative, creative entrepreneurs to build
micro and small businesses that will benefit themselves, their families, and their communities.
This microloan
pro~ram
is critical for
low-wa~e
earners in our community, especially because they
are unable to iet by on an inadeQuate minimum waie that does not pay for their basic needs. Often,
micro business is the only available option for those seeking to provide for their families in
Montgomery County.
We appreciate the efforts of the sponsors of Bill 49-16, Council President Berliner, Councilmember
Navarro, and Councilmember Hucker, as well as the co-sponsors; Councilmembers Floreen, Katz,
and Rice. A microlending will lift up and strengthen those who need it most in our community. We
look forward to working with you on this legislation as well as other efforts to continue building a
just and equitable county for all those who live and work in Montgomery County.
Thank you so much.
JEWS UNITED
FORJUSTICE
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Life Asset
Bringing Ideas
to
Life!
2448A 18th Street NW
Washington, DC
20009
(202) 709-06521
LifeAsset.org
Testimony by Markus Larsson
Executive Director, Life Asset
in Support of Bill 49-16, concerning Economic Development - Workforce
Development - Microlending Program, in Montgomery County, MD.
January 24, 2017
Council Members, thank you for the opportunity to testify in support of the
proposed microloan program for entrepreneurs.
My name is Markus Larsson. I am representing Life Asset, where I serve as
Executive Director. Life Asset is a non-profit organization with the mission to
provide microloans and training to low-income entrepreneurs - creating jobs and
financial self-sufficiency through business ownership.
Life Asset's clients face many life challenges:
• 100% of our loan clients are low-income;
• 55% are unemployed;
• 23% are seniors
• 12% are disabled,
• 75% are immigrants, and
• 13% of our clients are homeless.
By investing in the entrepreneurial spirit that already exists in low-income
communities we are making a lasting difference:
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• In the past 12 months, we have helped start or expand over 100
microbusinesses in Montgomery County, by providing microloans coupled
with training to entrepreneurs who are having difficulties qualifying for a loan
anywhere else.
• Over 98% repay their loans in full.
• On average, our clients see a 33% increase in annual revenue as a result of
access to loan and training.
• Over 90% of the businesses we have supported are still in operation after 2
years. Finally,
• Each microbusiness that we support with loans and training, employs on
average 2-3 people (counting temporary and seasonal jobs).
The positive impact of our work is not just financial but also leads to a greater
sense of self-worth and dignity, a sense of belonging, a more positive outlook on
life, and hope for the future. The impact of our work is not just on our clients but
also on their families and friends and the community at large.
Our goal for 2017 is to double our impact by helping to create or expand at least
200 microbusinesses which will create or retain over 400 jobs (incl. temporary
and seasonal jobs) in Montgomery County. Life Asset's goal in 6-7 years is to
support an active network of over 1,000 microbusinesses in Montgomery County.
Council President Berliner, our experience at Life Asset makes me confident that
the proposed legislation for a microloan program will help expand existing
business and start new business, creating more jobs in Montgomery County.
May I make one more point? Even very small loans, $1,500 or less, can make a
big difference in the success of new entrepreneurs.
From our clients at Life Asset, here are examples of this kind of success:
• Hillary received a $1,500 loan to start a street vending business. Hillary is
currently in the process of applying for her fourth loan, expanding the
business that now provides for herself and her two children.
• Working hard to get out of addictions and homelessness, Jose needed $790
to get his real-estate agent license and business cards. Three months later,
2
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he closed his first deal, and more business followed. Jose is now living in his
own place, and he inspires others.
• Jay has been operating a successful mobile car washing business for over 5
years. To expand and better target high-end customers, he needed a new
van. With his own savings and a $1,500 Life Asset loan he was able to get
that new van. Since then, Jay has received a second, and a third loan. Life
Asset training and loans enabled Jay to expand his business and hire an
employee.
Council President Berliner, every day at Life Asset, I am inspired by people
who have very little money, but
who strive for better lives by becoming entrepreneurs and by growing
their businesses.
The proposed microloan program will be tapping into that same entrepreneurial
spirit. On behalf of Life Asset's clients, I welcome, to the community of
entrepreneurs, the new businesses that this microloan program will help create
and expand.
Thank you.
3
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MONTGOMERY COUNTY COUNCIL
100 Maryland Avenue, Fifth Floor, Rockville, MD 20850
Bill 49-16, Economic Development - Workforce Development - Microlending
Program [Jan. 24, 2017]
Thank you Montgomery County Council for allowing me to provide a brief statement on
the importance of supporting local homegrown businesses througll the Economic
Development - Workforce Development - Microlending Program under Bill 49-16.
Good afternoon, my name is LaDon Love James. I am the owner of Lens and Love
Photography. I am a member/participant with Life Asset. Thanks to micro-loan
received from Life Asset I was able to g row my business. The loan was used to
purchase equipment that has allowed me to provide better services and increase my
prices.
As a result of my engagement with Life Asset, I have been able to broaden my network
of women entrepreneurs in the Montgomery County area. When like-minded people
join together in community, amazing things that happens. For example, people
collaborate to have a large impact with and for their clients. Cross training takes place
when people get to know each other and find strength where they have a weakness.
Sales increase when personal testimony is shared with friends, family and clients about
the products sold by fellow entrepreneurs. These are just a few of the outcomes of a
program like Life Asset. The women join together in groups of five, and the ·flve connect
with eight groups of five. This becomes the center. At the center, we are offered a
space to discuss successes and challenges and strategize on ways to make our
businesses stronger. There is training that takes place too. With social media, there
are virtual communities that are created, as well. Life Asset goes beyond the typical
lender because the staff, the structure of the loan program and the people participants
have the same goal. .. build sustainable entrepreneurial businesses that grow, create
employment opportunities, and yield a profit.
When Life Asset is added to programs helping Montgomery County business owners,
Maryland will benefit. Life Asset will have a huge impact in the Maryland in the
Montgomery County area.
Report on The Status of Women in Montgomery County by the Montgomery County
Commission Form Women on June 7,2007.
• Montgomery County women-owned businesses represent 23 percent (31,964)
of women-owned business in the state. These businesses employ 34,571
workers, generate annual payrolls of $1.1 billion, and generate over $4.4 billion in
revenue.
Invest more in local women owned small businesses. A business creates the
opportunity for a dream to be realized.
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Rockville
Inc.
Economic Development,
Known for
trw
CompanIes We Kee
February 24, 2017
Montgomery County Council
100 Maryland Avenue
Rockville, MD 20850
RE: Letter of Support for Bill 49-16 -
Micro/ending Program
Dear County Councilmembers,
As an agency that works to provide support, guidance and training to entrepreneurs and start-up
businesses on a regular basis, Ro'ckvilJe Economic Development, Inc. (REDI) supports the proposed Bill
49-16
to establish a Microlending Program in Montgomery County.
One of the biggest challenges for entrepreneurs is access to the capital necessary to make an idea an
actual viable business enterprise. Providing another source of funding for these startups should have a
great impact on the success of local would-be entrepreneurs.
We would also support having the Montgomery County Economic Development Corporation (MCEDC) as
the administrator of the fund, as we believe this function is more aligned with economic development
efforts rather than with workforce development.
We also strongly support having these Microloans available to all residents and businesses in the County,
including those located in the municipalities of Rockville and Gaithersburg. As your
city
centers, both
municipalities are major employment centers and have concentrated residential areas. Excluding the
municipalities from this program would be a disservice to the County.
Thank you for your support of this request, and please feel free to contact me with any questions.
51 Monroe Street Plaza East 20. Rockville, MD 20850
. 301-315-8096
wwwJockvilieredi.org
(fd)
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www.ledcmetro.org
@Iecicmetro
Background Information: Micro-Lending Program
Since 1991 LEDC has provided training and technical assistance to low to moderate
income aspiring entrepreneurs and established small business owners in the DC Metropolitan
Area to help start, stabilize, and expand their businesses. Since 1997 we have provided micro­
loans (under $50,000) for the purpose of helping aspiring entrepreneurs start their business and
established owners expand their business. In 2003 we were certified by the U.S. Treasury
Deparment as a Community Development Finance Institution (CDFI) and in 2006 became an
SBA Micro lending Intermediary.
While our lending program has provided more than $11 million in capital to support over
1,000 entrepreneurs in the DC metro area, our small business technical assistance program has
served thousands of aspiring and established small business owners in the region. In FY 2016
our lending program made 126 loans to small businesses in DC, MD, and Northern Virginia
totaling more than $1.6 rnillion in capital. Our combined small business technical assistance and
lending efforts in fiscal year 2016 led to the creation of 63 businesses, supported/retained 385
equivalent full-time jobs.
Our lending program provides small business and consumer micro-loans. Our small
business micro-loans range from $5,000 to $50,000. Our consumer loans include a $680
Citizenship Loan to help clients cover the costs related to receiving US citizenship, and Credit
Builder Loan capped at $1,000 to help establish or repair credit.
In fiscal year 2017 we will begin piloting a new small business micro-loan, Seed Loan (or
Prestamo Semilla,
in Spanish), designed for low-income and/or low credit score clients and
returning citizens. The loan is aimed at individuals running startup (less than 12 months of
operations) small businesses or planning to launch a startup small business within the next 18
months. The goal is to help entrepreneurs improve their credit score and provide them access to
larger financial options.
As a community-based lender, we limit our market to entrepreneurs with small
businesses that are generally unable to obtain financing from traditional financial institutions
such as banks or legal residents applying to become new US citizens, but we strive to approve
loans only to borrowers who are able to repay their loan. As a CDFI LEDC's loan officers are
trained to provide comprehensive technical assistance to its borrowers. The technical
assistance includes analyzing and when necessary repairing credit reports, helping clients
separate their household expenses from business expenses, helpill9 clients develop profit and
loss statements, and helping clients produce revenue and expense projections. When in the
course of underwriting a loan it becomes apparent that a client is not yet ready for a loan they
are referred internally to our Small Business Development Program.
DC: 641 S Street NW Washington, DC 20001
I
(202) 588-5102
MD: 11002 Veirs Mill Road, Suite 503 Wheaton. MD 20902
I
1-866-977-LEDC
10 E North Avenue
I
Baltimore, MD
I
21202
I
(443) 708-7035
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SMALL BUSINESS LOANS
LEDC is as a certified
Community Development
Financial Institution providing
alternative
financing to build and grow small businesses in the Washington,
DC and Baltimore Metropolitan areas.
Build and Grow Your Small Business
REQUIREMENTS
./ Personal
&
business bank
statements
(3
most recent
months)
./ Personal
&
business tax
returns (2 most recent
years)
./ Collateral
./
RATE
&
TERMS
./
Loans from $5,000 to
USES
./ Vehicles
&
equipment
./ Inventory
$50,000
./
Fixed rates ranging from
7.50%
to
14%
./ Renovate or expand
business location
./ Hire more employees
Bridge
lending for
government grants capital
./ Terms from 6 months up to
5 years
./ $50 loan application fee
(includes one copy of your
credit report)
(i,dtiO.'1
,i!(iY L'L.
r,
'ft,lt ...
C,rt'(/iL
r:::
~.iD:-:I
LEDC is a signatory of the Small
Business Borrower( Bill of
Rights
resQQll?iblebusinesslending~
./
Business loans up to $50,000
./
Rates as low as 7.50%
./
No hidden fees
./
Business coaching available at no cost
./
Simple, fast application process
./
SBA lender
U.S. DEPARTMENT OF THE TREASURY
........
CERTIFIED CDFI
- - - CDFl FUND - - -
Fln:mci.llnltilllllom FOJIlerlnj:" Comml.lDil\ Crowth
DC Office: 641 S. Street NW Washington, DC 20001
I
(202) 588-5102
Wheaton Office: 11002 Viers Mill Road, Suite 503 Wheaton, MD 20902
I
1-866-977-LEDC
Bailimore Office: 10 E North Ave, Baltimore, MD 21202
I
(443) 708-7054
For further information please contact our lending staff at: (202) 540-7420
lending@ledcmetro.org
I
www.ledcmetro.org
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Isiah Leggett
County Executive
Steven A. Silverman
Director
DEPARTMENT OF ECONOMIC DEVELOPMENT
Micro-Enterprise Loan Program Summary
Montgomery County created the Micro-Enterprise Loan Program (Program) in Fiscal Year 2008 to support
micro-enterprises located in the County by providing financial assistance to these small businesses. The
Program facilitates business development through direct loans or participation in loans made by other financial
institutions, and is targeted at Montgomery County-based small businesses that have gross revenues of less
than $250,000 annually and fewer than five full-time-equivalent employees. To be eligible for consideration
for financial assistance from the Program, businesses must also meet one of two primary tests:
1)
Program
funds must assist the creation or expansion of the business; or 2) Program funds must help retain and stabilize
the business. In addition, the principals of the business must be at least 18 years of age and reside in
Montgomery County. The maximum loan amount under the Program is $15,000 for anyone micro-enterprise,
and loans will have maximum repayment terms of three years. Collateral may be required.
Applicants
to
the Program are rigorously screened and rated for the following elements of their
proposed/existing business:
1)
Financial history
(if
applicable, and including personal financial/credit history) and projections, including
2)
3)
4)
5)
balance sheets, income statements, cash flow statements and bank statements (if applicable);
The background, experience and financial commitment of the principal(s) and key management personnel;
Statement of the amount, timing and projected use of the County's assistance;
Projected employment growth, and/or other positive economic impacts that the County's assistance will
facilitate; and
The ability of the recipient business to generate sufficient income to service the requested loan.
Applications are further evaluated using the following "priority" criteria to arrive at a funding decision:
1) Priority is given to assistance that will improve the County's economy and advance the County's economic
development objectives and strategies;
2) Priority is given to cases where the County's assistance will function as a catalyst to the company's
subsequent capitalization;
3) Priority is given to women-owned or minority-owned businesses
4) Priority is given to cases where the company's business will create employment growth by creating new
jobs within three to five years of funding; and
5) Priority is given to cases where privatelbank financing is not available at the time of the Program
application.
In
order for the County to process a loan application, the applicant must submit with the application a payment of
$25 in the form of a check or money order made payable to Montgomery County, Maryland to cover the loan
application and credit report fee.
III Rockville Pike, Suite 800. Rockville, Maryland 20850. 240-777-2000, Fax 240-777-2001, TDD 240-777-2046, www.montgomerycountymd.gov/ded
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In order to receive loan funds from the Program, applicants must agree to receive counseling, mentoring and
training from the Maryland Small Business Development Center Network (and/or another outside party acceptable
to the County) and must agree to develop a Technical Assistance Plan to help achieve business sustainability.
Depending on the extent of analysis and research required to validate the proposed business concept/technology,
applicants should allow for a processing time of 30 - 50 working days from the County's application acceptance
date before receiving a funding decision. Once the applicant business accepts the County's funding offer, the
actual closing generally will occur within 20 working days, depending on the applicant's ability to prepare and
submit closing documents. Loans approved for funding by Montgomery County are subject to an origination fee
equal to the greater of $25.00 or 1% of the amount of the loan.
The remainder of this page is intentionally blank.
III Rockville Pike, Suite 800 • Rockville, Maryland 20850 • 240-777-2000, Fax 240-777-2001, TDD 240-777-2046, www.montgomerycountymd.gov/ded
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MONTGOMERY COUNTY ECONOMIC
DEVELOPMENT CORPORATION
February 26, 2017
Montgomery County Council
100
Maryland Avenue
Rockville, MD
20850
Letter in Support for Bill
49-16 -
Microlending Program
Dear County Council members,
In partnership with our Municipality, County and State colleagues, the Montgomery County
Economic Development Corporation works every day to retain, expand and recruit new business to
our county. Creating an environment for success in the entrepreneur, start-up and small business
area is a primary goal of our organization.
With that in mind, it should be known that the Montgomery County Economic Development
Corporation supports the proposed Bill
49-16
to establish a Microlending Program in Montgomery
County. Access to capital is an important factor in a young company's success and this program
will provide another source of funding.
The Montgomery County Economic Development Corporation also supports being the
administrator of the Microlending Program, as it is aligned with our economic development goals.
Thank you for support of this request and please feel free to reach out if you have any questions.
Sincerely,
David Petr
President and CEO
1801 Rockville Pike, Suite 320. Rockville, MD 20852 I 301.216.3832 I thinkmoco.com
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Possible amendments
These amendments would require the County Economic Development Corporation, rather
than the Workforce Development Corporation, to administer the micro lending program.
Amend line 1 as follows:
Sec. 1. Sections [[30B-8, 30B-12 and 30B-14]] 30B-5 and 30B-7 are
amended as follows:
Insert after line 1:
ARTICLE I. ECONOMIC DEVELOPMENT CORPORATION.
*
(a)
*
*
Sec. 30B-5. Economic development program.
The Board of Directors must recommend economIC development
programs and associated perfonnance measures to the Executive and
Council each year to advance the policy objectives and perform the
activities listed in Section 30B-1, including revisions to the County's
strategic plan for economic development established by Section 20-76(a).
(b)
In its economic development programs, the Corporation should
collaborate with the Montgomery County Workforce Development
Board to advance the County's economic development strategic plan
adopted under Section 20-76.
(c)
The Corporation's economic development programs may include a plan
for sponsorship of private investment, marketing, and advocacy
initiatives.
(d)
The Corporation must administer. as part of a microenterprise
development strategy. a culturally proficient microlending program
under which:
ill
loans must not exceed $15,000;
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ill
loans must only be issued to Montgomery County residents:
CA)
who have resided in Montgomery County for at least 180
days before the loan application is made: and
LID
QJ
whose business is headquartered in Montgomery County:
loan recipients must participate in educational and technical
assistance provided by the program:
ill
ill
non-County funds may be used as a source for capital and program
administration: and
materials and assistance are provided
reflective ofthe County's population.
III
multiple languages
W
The Board and staff must meet with the Executive and the Council at least
annually regarding the Corporation's activities and finances.
*
30B-7. Report.
*
*
The Board of Directors must report annually on the activities and finances of
the Corporation and provide an audited financial statement of the Corporation to the
Executive and Council by November 1 of each year. The report must also
include~
W
the Corporation's plan to solicit and receive additional public and private
funding for its operations: and
au
information on the micro lending program including:
ill
ill
the number of micro loans issued during the prior fiscal year by
dollar value of the loan:
a description of the how each loan was used:
loan repayments received:
the rate of repayment: and
non-County funds leveraged to support the program.
ill
ill
ill
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Amend lines
2
through
61
as/allows:
ARTICLE II. WORKFORCE DEVELOPMENT.
30B-8. Policy objectives.
(a)
The success of Montgomery County's economic development goals is
dependent upon a comprehensive and demand-driven system of
workforce development that:
(1)
meets the talent attraction, development, and retention needs of
strategic industries;
(2) meets the needs ofthe underemployed and unemployed;
[and]
and
(3)
develops career pathways that lead to sustainable wage jobs to
support a thriving
economy[[~
and
ill
provides fmancial and technical assistance through micro loans to
County entrepreneurs to develop or expand small businesses
in
the
County]].
(b)
To achieve these goals, the County Government may designate a
nonprofit corporation as the County's Workforce Development
Corporation to implement the County's workforce development policies
established by the Workforce Development Board.
*
*
*
Sec. 30B-12. Workforce development program.
(a)
The Workforce Development Corporation's Board of Directors must
recommend
workforce
development
programs
and
associated
performance measures to the Executive, Council, and Workforce
Development Board each year to advance the policy objectives listed in
Section 30B-8.
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(b)
The Workforce Development Corporation's workforce development
programs may include a plan for sponsorship of private investment,
marketing, and advocacy initiatives.
(c)
[[The Workforce Development Corporation must administer
~
culturally
proficient microlending program under which:
loans
- - ­
ill
- -
must not exceed $15,000;
ill
loans must only be issued to Montgomery County residents:
(A) who have resided in Montgomery County for at least 180
days before the loan application is made; and
ill.)
whose business is headquartered in Montgomery County;
ill
ill
ill
loan recipients must participate in educational and technical
assistance provided
by
the program;
non-County funds may be used as
~
source for capital and program
administration; and
materials and assistance are provided m multiple languages
reflective ofthe County's population.
@]]
The Workforce Development Corporation's Board and staff must meet
with the Executive, the Council, and the Workforce Development Board
at least annually regarding the Workforce Development Corporation's
activities and finances.
*
30B-14. Report.
*
*
The Workforce Development Corporation's Board of Directors must report
annually on the activities and fmances of the Corporation and provide an audited
financial statement of the Corporation to the Executive, the Council, and the
Workforce Development Board by November 1 of each year. The report must also
include[[~
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(ill]]
the Corporation's plan to solicit and receive additional public and private
funding for its
operations[[~
and
(hl
information on the microlending program including:
ill
ill
ill
ill
ill
the number of microloans issued during the prior fiscal year
.Qy
dollar value of the loan;
£!
description of the how each loan was used;
loan repayments received;
the rate of repayment; and
non-County funds leveraged to support the program]].
F:\LAW\BILLS\J649 Workforce Development ­ MicroJending\Possihle Amendments.Docx
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OFFICE OF THE COUNTY EXECUTIVE
ROCKVILLE, MARYLAND 20850
Isiah Leggett
County Executive
MEMORANDUM
March 1,2017
TO:
Roger Berliner, President
Montgomery County
~~
FROM:
~-
..
Isiah Leggett
~
~
County Executive
.
l'
r
SUBJECT:
Bill 49-16, Economic Development - Workforce Development - Microlending
Program
Thank you for sharing your proposed amendments to Bill 49-16 to establish a
microlending program. These amendments are reflective our suggested changes. We are pleased
to support this approach.
First, we support the change of designating the Montgomery County Economic
Development Corporation as the lead agent in charge of this program rather than WorkSource
Montgomery, whose primary focus is on growing talent rather than enterprises.
In addition, we agree that a micro lending program should be
part
of a
comprehensive micro enterprise development strategy, which was recommended in the Council­
adopted Comprehensive Economic Strategy. We believe a more comprehensive approach in
partnership with the existing business support network is called for to ensure the success of this
micro lending program as
an
economic development tooL
Thank you for your efforts to grow Montgomery County's microenterprises.
ILllq
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MONTGOMERY
COUNTY ECONOMIC
CORPORATION
DEVELOPM ENT
April 7, 2017
Montgomery County Council
100 Maryland Avenue
Rockville, MD 20850
Letter in Support for Bill 49-16 - Microlending Program
Dear County Councilmembers,
In partnership with our Municipality, County, and State colleagues, the Montgomery County Economic
Development Corporation (MCEDC) is committed to business success in our County. Creating an
environment for entrepreneurs, start-up ventures, and small business to grow and prosper is a critical
part of our commitment to this goal.
The MCEDC supports the proposed Bill 49-16 to establish a Microlending Program in Montgomery
County. Additionally, the MCEDC supports the amended Bill, recommended by the PHED Committee,
that would designate that the Microlending Program be administered by the MCEDC. We see this
amendment to Bill 49-16 as a change that is aligned with the aforementioned goal of our organization.
As administrator of the Microlending Program, the MCEDC will seek a capable partner organization to
implement the program. This partnership will be established through a competitive process. The
selected partner organization will utilize the funds for financial assistance and technical assistance to the
microloan borrowers. In its current form, we believe this Bill offers a degree of flexibility that will allow
the MCEDC to select and manage the appropriate partner organization, while securing the ability of the
MCEDC to carry out the vision of the program.
After meeting with community partners, the MCEDC would like to submit, that beyond administering
traditional micro loans, the intention is to utilize the Microlending Program to supplement current
community wealth programs. Harnessing the Microlending Program in this manner would offer an
opportunity to fund cooperative loan funds for cooperative micro-entrepreneurs - groups of businesses
collaborating on a common business activity.
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Employing the program in this manner can make an even larger impact on the micro-entrepreneurship
ecosystem. Adopting the practice of shared responsibility, this model could mitigate loan risk by having
a group of peers guarantee one another, while also having a broader impact by reaching more
borrowers. A program such as this enables micro-entrepreneurs to access their first loan while allowing
the opportunity to demonstrate capacity to handle larger loans with as they grow. This addresses the
problem of access but not capacity, therefore creating a mechanism of growth and sustainability.
Below are detailed assumptions to formulate the cost estimate for administering the Microlending
Program, as well as solicitation and selection of a viable partner for implementation:
Operating Expenses
Solicitation and Selection of Partners
Ongoing Partner Management and Program Marketing
TOTAL $48,000
The MCEDC is very excited about the opportunity to administer this important program. Thank you for
the support of this request. Please feel free to contact me if you have any questions.
Sincerely,
Annual Cost
$18,000
$30,000
David Petr
President and CEO