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Merrill Lynch Provides Grant to VEDC & API SBP

Credit Facility, Grants Part of Comprehensive Effort To Support Micro-Enterprises
 
LOS ANGELES – Merrill Lynch today announced that it will provide a $1 million credit facility for the Valley Economic Development Center in Van Nuys as part of a broad effort to bolster the capabilities of organizations providing loans for micro-enterprises in California.

In addition, the Center will also receive a $50,000 grant to develop a simplified loan underwriting program and another micro-enterprise lending assistance organization. In addition, Merrill Lynch is awarding the Asian Pacific Islander Small Business Program in Los Angeles a grant of $40,000 to increase its capacity to support micro-enterprises.

The two awards are part of $250,000 in grants to assist and support micro-enterprises throughout California.

"In today's economy, it is critical that we foster entrepreneurship among small enterprises in communities where economic growth is so needed," said Terri Ludwig, President of the Merrill Lynch Community Development Company. "These community groups understand the needs of micro-enterprises and, with improved resources, can better deliver important services to the businesses they serve." 

The Valley Economic Development Center is the largest non-profit business development corporation in Southern California, offering financial assistance, consulting, training, and workforce solutions to small and medium sized businesses throughout Southern California for more than 30 years.

The Center will use the $1 million credit facility in part to increase its lending to micro-enterprises in Southern California.

Merrill Lynch has been working closely with the California Association for MicroEnterprise Opportunity (CAMEO), an association of organizations, agencies, and individuals dedicated to furthering microenterprise development in California.

CAMEO recently estimated that only 1,900 California micro-enterprises, businesses launched with five or fewer employees and with less than $35,000, received loans from micro-enterprise lenders in 2006 and 2007, with an average loan size of $8,900.  With more than 2 million microenterprises in California, CAMEO believes an infusion of capital could help create jobs, boost tax revenue and begin an economic recovery in California.

"The need for micro-enterprise lending is dramatic," said Claudia Viek, chief executive officer of CAMEO. "Micro-businesses are job creators and we hope Merrill Lynch's significant investment will begin a renewed focus on very small business start-ups in local communities."
 
In response to the capital gap, CAMEO earlier this year issued a report, Micro Lending Action Plan for California, that calls on government, business and non-profit organizations to work together to build micro-lending and provide below-market interest rates to these businesses.

The CAMEO report also recommended that micro-enterprise groups collaborate to increase scale and efficiency and included a request of the financial services industry help raise $1 million in grants for operations and technical assistance.

"Merrill Lynch today demonstrated it understands that entrepreneurship is a vital ingredient to economic recovery," Viek said.

"VEDC is extremely proud to partner with Merrill Lynch in this time of severe credit crunch when micro and community development lenders are experiencing greater demand than ever," said Roberto Barragan, Executive Director of the Valley Economic Development Center (VEDC). "Over the last four months, we have seen a quadrupling of demand and are only limited by available loan capital.  Merrill Lynch has in less than 45 days made $1 million available to VEDC in order that we can continue to make loans to micro and small businesses into the new year.  Over 100 jobs will be literally saved over the holidays from their strong commitment to the California economy."

"Merrill Lynch looks forward to partnering with CAMEO and micro-enterprise lenders to create new, innovative approaches to expand micro-enterprise lending in California," said Dan Letendre, managing director of the Merrill Lynch Community Development Company, who spearheads the Community Development Company's activities in California. "We are committed to building both the capacity of micro-lenders and the amount of capital available to support micro-enterprises in California."

Merrill Lynch Community Development Company (MLCDC) is a community development investment bank established in 2001 to provide financing solutions and support to underserved communities. Leveraging Merrill Lynch's intellectual and financial capital, MLCDC establishes strategic partnerships with community leaders to develop projects that benefit low- and moderate-income areas and individuals. MLCDC looks for lending, investment, and program development opportunities.  MLCDC seeks collaborative partnerships with governmental and quasi-governmental entities, non-p rofit and for-profit intermediaries and other financial institutions in a broad range of community development activities that fulfill Merrill Lynch banks' community reinvestment goals under the Federal Community Reinvestment Act (CRA). While its activities are national in scope, MLCDC concentrates its efforts in communities in California, New Jersey, New York and Utah.