2014: It Was A Productive Year

2014: It Was A Productive Year

By Ann Sullivan and Martin Feeney

With the holidays upon us, and 2014 drawing to a close, we wanted to take this opportunity to reflect on our policy victories over the last twelve months.  From the release of the Micro Capital Task Force’s recommendations at the 2014 National Conference in New Orleans to the introduction of legislation to improve the Microloan Program to a Congressional Briefing hosted in the Senate Small Business Committee’s hearing room, AEO had a number of resounding successes in 2014.  The key to our victories was the engagement of our members in the advocacy process — the countless meetings, letters, calls, and emails you wrote were vital to supporting our policy objectives in 2014. We could not have achieved all that we did without our members.

So let us recount this year’s achievements...

In the face of reduced overall government spending and calls to reduce or eliminate programs supporting microbusinesses,AEO has successfully executed a campaign to educate elected officials of the importance of providing services and capital to the smallest of businesses.  Our efforts have createdbroad support for business lending and entrepreneurial development programs on both sides of the aisle, despite partisanship at an all-time fever pitch.  Despite significant cuts in the federal budget, AEO succeeded in securing funding increases for many of AEO’s priority programs, despite overall funding levels that were ten percent below the President’s FY2015 Budget request.  The programs and the corresponding increase are listed below.


SBA PRIME                             $5 M (42% increase)

SBA Micro Lending                $25 M (continued)

SBA Micro TA                           $22.3 M (12% increase)

SBA WBC Program                $15 M (7% increase)

SBA SBDC Program              $115 M (2% increase)

SBA Boots to Business         $7.5 M (7% increase)

SBA 7(j) TA                               $2.8 Million (continued)

SBA 7(a) Lending                   $18.75 Billion in Loan Authority

Treasury CDFI Fund[1]           $230 M (2% increase)

It is not an exaggeration when we say that very few programs across government received funding increases this year.  These increases are a testament to our efforts to make the case to Congressional appropriators.  But it is not only in the funding realm that AEO has established itself.  Over the last year, AEO has continued to cement its position as a thought leader and industry expert when it comes to Capitol Hill and federal agencies.  Not only has AEO’s President and CEO, Connie Evans, been invited to testify before the Congress, so have AEO’s members and those they serve. 

For example, Veronica David testified before the Senate Small Business and Entrepreneurship Committee in July about her experience at the Washington Area Community Investment Fund (WACIF, an AEO member).  Similarly, when it comes to access to capital, underserved entrepreneurs, and business assistance policies, AEO’s research has been increasingly cited in Congressional hearing memos and Committee reports.  AEO played a pivotal role in the development of two Senate Small Business and Entrepreneurship Committee reports, the “Wealth Gap Report” and “21st Century Barriers to Women’s Entrepreneurship,” and our research is cited extensively in both. A third report on minority access to capital that has not yet been released, but we worked with the authors to provide input and data. 

Coming off a successful Conference in May from the jazz-filled streets of ‘Nola, where U.S. Treasury Acting Assistant Secretary for Financial Institutions Amias Gerety (affectionately known as the Treasury Secretary’s “point man for protecting the nation’s financial system from emerging threats”) came in to headlinethe Micro Capital Task Force (MCTF) Summit, AEO took its recommendations to Capitol Hill.  In July, Senate Small Business Committee Chair Maria Cantwell (D-WA) served as the keynote speaker at AEO’s MCTF Congressional Briefing

The room was packed with Hill staffers and agency officials eager to learn more about what the MCTF found during its yearlong fact finding mission.  The recommendations include:

·         Fostering increased coordination between the Small Business Administration’s Microloan and Community Advantage lending programs and the CDFI Funds offerings, resulting in increased scale and reach of smaller dollar loans programs and reducing program and overhead costs.

·         Ensuring securities crowdfunding is established as a viable financing tool for small businesses through a regulatory framework that is void of onerous and cost-prohibitive requirements.

·         Establishing regulatory exemptions for certified CDFIs to co-invest in Main Street businesses via crowdfunding and peer-to-peer platforms.

·         Enabling Main Street business loan applicants to opt into privately automated referral networks of approved lenders and services providers.


Not interested in resting on our laurels, AEO convened a group of microlenders during the summer months to identify concrete proposals to help improve Main Street access to capital, specifically for the Microloan Program.  After an extensive review period, AEO submitted a set of recommendations that would enable microlenders to more effectively and efficiently deploy capital through the program.  AEO’s proposals were incorporated in the Women’s Small Business Ownership Act of 2014(S. 2693/H.R. 5585), including: eliminating the 25%/75% restrictions on use of technical assistance grants, eliminating the minimum state allocation formulas (“1/55th rule”), increasing the intermediary lending limit to $7 million, and increasing loan terms for borrowers and intermediaries.  In a Congress taking very few votes and passing very few bills, it was incumbent upon us to find another way to create change.  We are delighted that the FY2015 Omnibus spending bill passed in December included a special directive requiring the SBA to assess the impact of the requirement that only 25 percent of funds for Microloan TA may be used for pre-loan TA submit recommendations to the Congress within 90 days.  This is our first opening to review this rule that is currently on the books.  It will afford AEO the opportunity to work with the SBA in the coming months to develop recommendations, both on the 25/75 requirement and other improvements we have already identified.

Another advocacy goal is changing the narrative with respect to entrepreneurship within the federal government.  Under the mantra of “starting a business is job creation,” AEO’s years-long advocacy effort to allow Department of Labor-supported job-training centers to provide entrepreneurship training has been successful.  Our efforts culminated in April of this year when AEO and a coalition of partners sent a letter to Vice President Joe Biden, tasked with reviewing the workforce system and suggest improvements.  Our persistence paid off: The DOL agreed to rewrite its regulations to allow those who become self-employed to be counted as a successful outcome within the workforce system after a multi-year effort on AEO’s part. Look for the new proposed rules expected in January 2015.

As the year comes to a close, AEO says thank you to two of our microbusiness Champions in the Congress. Senator Mary L. Landrieu (D-LA), who served for years as Chair of the Senate Small Business & Entrepreneurship Committee, lost her seat during the mid-term elections. She was particularly focused on underserved communities and the opportunity entrepreneurship presents them. Senator Cantwell, who took over for Senator Landrieu when she switched Committees earlier this year, is moving to serve as Ranking Member of the Energy and Natural Resources Committee in the new Congress. We will really miss Senator Cantwell’s determination to put AEO’s priorities into legislation.  When the 114th Congress convenes in January, there will be new Chairs for the House and Senate Small Business Committees.  In the House, outgoing Chair Sam Graves (R-MO), who was term limited, will be replaced by Rep. Steve Chabot (R-OH).  In the Senate, Sen. David Vitter (R-LA) will become Chair of the Committee and Sen. Ben Cardin (D-MD) will become the Ranking Member.

I encourage you to sign up to receive AEO’s policy updatesas well as check out Connie’s year-end messageto members, which included an exciting announcement on the Tilt Forward Initiative.

On the policy front, 2014 was a productive year policy-wise for AEO.  I suspect 2015 will be challenging with the new changes in Congressional leadership, but we continue to believe that supporting entrepreneurship is not partisan and expect the Congress to work together to assist microbusinesses prosper.   We see the change in Congress as an opportunity to make new friends and form new relationships.

On behalf of the AEO Government Relations team, we wish everyone Happy Holidays and a Happy New Year.

For the CDFI Fund, the bill included the following: $18 M for the Bank Enterprise Awards Program, $1 M in TA funding for CDFI expansion into underserved communities, and authorized the CDFI Bond Guaranty Program at $750 B.


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