Advocates say the program helps small-business owners in underserved communities get capital that they may not qualify for otherwise.
“To me it’s additional services to help entrepreneurs who don’t come with a lot of the financial literacy tools they need to start a business but have a good idea,” said Ann Sullivan, who heads the Association for Enterprise Opportunity’s policy team.
SBA officials identified PRIME as one of several that could have its funding scaled back or eliminated in a tough economic climate, calling it “duplicative” of other efforts within the agency.
“With the work of our microlenders and new efforts to recruit community-based lenders, we can continue to provide technical assistance in a more cost-effective way,” SBA Administrator Karen G. Mills told the House Appropriations Committee in March.
As lawmakers work in the coming weeks to reconcile competing versions of the budget for next fiscal year, Sullivan said the association will push Congress to fund the program even at a reduced rate.
The local nonprofits receiving PRIME grants earlier this month included the Aspen Institute, the Microenterprise Council of Maryland, ISED Solutions and the Credit Builders Alliance.
The nonprofits’ roles are not always obvious. The Credit Builders Alliance, for instance, is an organization that reports an entrepreneur’s history of repaying microloans to credit bureaus.
Executive director Vikki Frank said low-income entrepreneurs that develop a positive credit history will be more attractive to traditional lenders, such as commercial banks, which ultimately allows the business to pursue larger sums of capital. The alliance received $167,498 from PRIME this year.
“As micro-entrepreneurs are making the transition and starting small businesses. . . building that credit history is just essential in helping that business get the access to capital that it needs to continue,” Frank said.