Center staff testify in favor of changes to Microenterprise Assistance Program

Small Business
Contact(s)

Johnathan Hladik, policy director, johnathanh@cfra.org , 402.687.2100 ext. 1014; Teresa Hoffman, senior communications associate, teresah@cfra.org, 402.687.2100, ext. 1012

LINCOLN, NEBRASKA – On Tuesday, Center for Rural Affairs staff testified in support of two bills aimed at providing much needed stability for Nebraska small business owners during  hearings before the Nebraska Legislature’s Appropriations Committee. 

Legislative Bills (LB) 759 and 1090 are seeking improvements to the state's Microenterprise Assistance Program, which helps entrepreneurs start or grow their business. 

“This program allows us to provide technical assistance and loans to entrepreneurs who are unable to secure bank financing due to lack of collateral, credit obstacles, or a local bank’s inability to fund business startups,” Kim Preston, lending services director at the Center for Rural Affairs, said during the hearing on LB 759, introduced by Sen. Myron Dorn

The Nebraska Small Business Collaborative, which includes the Center for Rural Affairs, Catholic Charities of Omaha, Community Development Resources of Nebraska, and the Nebraska Enterprise Fund, has been using Microenterprise Assistance Program funds to provide small business loans and technical assistance since the program’s inception in 2012. 

“Members of the Collaborative do not compete with banks in any way, shape, or form,” Preston said. “Instead, we provide a lifeline to aspiring entrepreneurs when bank financing isn’t an option.”

While the Microenterprise Assistance Program, administered through the Business Innovation Act, has been successful, the group has identified a small number of changes that could make it even better. 

State law currently limits loans to $100,000 or less. LB 759 would raise that limit to $150,000. Reasons for the change, Preston said, include cost of living increases and potential clients requiring larger loans, which means providers have to identify secondary sources of funding to meet the entrepreneur’s business needs. 

“This small step will make a big difference to our clients, increasing the likelihood of program success and ensuring we as administrators can use limited program funds as efficiently as possible,” she said. 

Testifying in support of LB 1090, Center Policy Director Johnathan Hladik said for these small business owners, the past two years have been anything but easy. LB 1090, also introduced by Sen. Dorn, would allow lawmakers to award up to $3 million in funding for the program. 

“From forced closures to supply chain disruptions, entrepreneurs have found new challenges at every turn,” Hladik said. “Established specifically to help these businesses overcome obstacles through training, technical assistance, and targeted lending, the Business Innovation Act’s Microenterprise Assistance Program was designed to meet this moment.” 

In fact, Hladik said the program is exceeding expectations right now. In 2020, the collaborative  received $500,000 for technical assistance and $500,000 for lending. Each organization then provided a 35% match, using non-state funds, to maximize impact.

“This small investment had a multiplying effect that created impressive results,” Hladik said, noting 6,307 small business clients received technical assistance and classroom training; 164 small businesses accessed direct loans to grow their business; and more than $4.1 million in new capital was put to work.

Microentrepreneurship is a key source of employment in the state. Nebraska features 145,000 microenterprises, which account for 86 percent of all businesses. Approximately 74 percent of Nebraskans report a microbusiness as their sole source of income. 

Sisters Ana Gonzalez and Veronica Ramos, owners of A&V Enterprises, LLC, in Grand Island, have used the Microenterprise Assistance Program to secure loans and receive technical assistance. Both praised the BIA in their testimony before the committee. 

“I strongly believe the Business Innovation Act Microenterprise Assistance Program is a great program because it has made a huge difference in my business,” said Gonzalez, who also owns Enchanted Bakery. “Without access to the funds it would have been difficult for me to obtain a loan for my business.” 

Gonzalez and Ramos said the technical assistance they received also helped them better understand and manage their businesses. 

“The individualized attention and support made it easier to overcome obstacles and roadblocks as I started and grew my business,” said Ramos, who also owns Blossom Beauty. “The trainings have made a huge difference and I’m always learning something new.”