Page 142 - 1-Entrepreneurship and Local Economic Development by Norman Walzer (z-lib.org)

Building Communities through Entrepreneurship Development 131

find funding, recruit participants, find qualified staff, and build trust in the
IDA programs (Bailey et al. 2006).
These insights suggest that IDA programs alone may not provide the
asset-building boost that rural entrepreneurs need to build the personal as-
sets for business start-up; As part of an entrepreneurial support system,
however, IDAs are an important tool that many communities and states cur-
rently use to help rural entrepreneurs gain the initial capital needed to
launch a business enterprise.
Business start-up is often financed through alternative financing institu-
tions, specifically microenterprise programs and community revolving loan
funds. Microenterprise programs have grown dramatically throughout the
United States during the past 20 years. These programs provide loans, and
often technical assistance, to businesses with fewer than five employees and
that require $35,000 or less in start-up capital. Most microenterprise pro-
grams have been funded through a combination of foundation and public
sources. The industry has been well-documented through the efforts of the
Aspen Institute’s FIELD (The Microenterprise Fund for Innovation, Effec-
tiveness, Learning and Dissemination) program (Edgcomb and Klein
2005). In 2000, microenterprise development programs served between
150,000 and 170,000 individuals.
Microenterprise development programs provide an important source of
capital for rural entrepreneurs who are starting businesses. Of the 554 mi-
croenterprise programs documented in the United States in 2002, 60 per-
cent (332) serve rural markets (AEO 2005). Many of these programs re-
ceived funding from the U.S. Department of Agriculture’s Rural Business
Enterprise Grant (RBEG) program.
Microenterprise programs provide access to small loans that entrepre-
neurs would not receive from banking institutions. Borrowers often have
limited or poor credit history, limited assets and collateral, and frequently
limited experience with credit and financing. The microenterprise programs
provide more than capital to entrepreneurs. They provide the support,
training, and mentoring assistance vital to a small entrepreneur in the start-
up phase.
One example of a successful rural microenterprise program is the Moun-
tain Microenterprise Fund (MMF) which serves the 12 western-most coun-
ties in North Carolina. In addition to providing access to capital for mi-
croentrepreneurs, MMF offers an eight-week business plan course,
Foundations, on a sliding fee scale. Graduates of the Foundations course can
enroll in the Membership program, providing them with access to addi-
tional counseling and other resources. Participants in MMF programs be-
come part of a network of microentrepreneurs who can offer support during
the business start-up process. Graduates can also become an important re-
source for MMF by helping new entrepreneurs just getting into the program.