Academy for Green Microenterprise Development Peer Network

Facilitated by Liz Penney, Director of Community Outreach, ACE/Georgia Green Loans

Jason Friedman, PrincipalFriedman Associates

Funded in part by U.S. Small Business Administration PRIME Program

Background

• ACE was awarded a grant from the SBA Program for Investments in Microentrepreneurs Program (PRIME) to build the capacity of MDOs seeking to develop green microenterprise training and/or lending programs for low-income entrepreneurs. ACE has developed an innovative platform for green small business loans – Georgia Green Loans.

• ACE is partnering with Jason Friedman of Friedman Associates. Jason has 25 years experience in microenterprise development, CDFI and asset development field.

Purpose of the Peer Network

• This is new territory!

• Large firms have resources to learn and invest in sustainability (but the little guys don’t).

• Practitioners are eager to learn about what “green” means and how to translate it to their clients.

• Unprecedented opportunity to share our collective experiences in this exciting arena and form peer relationships to further the field.

Our Objectives Today

Introductions

What do we mean by ”green” microenterprise?

What are our colleagues doing in this area?

What are our goals for a Green Microenterprise Program?

Issues identified by members for further exploration and discussion.

Network Members in Action!

• META, Boise, Idaho

• Opportunity Fund, San Jose, CA

• ACCION USA, New York

• Adelante Empressas, Forest Grove, OR

• SNAP Financial Access, Spokane, WA

• Urban Solutions, SF, CA

What Do We Mean by “Green?”

The Green Economy

Consumer spending in the green economy is growing rapidly.

In 2005 in the U.S. alone, there was a $228.9 billion market for goods and services focused on health, the environment, social justice, personal development and sustainable living.

These include purchases related to renewable energy, organic food, alternative fuel vehicles, non-toxic cleaning products, alternative health care and resource-efficient products.

This market – sometimes referred to as LOHAS, short for Lifestyles of Health and Sustainability -- is projected to reach $1 trillion annually by 2020 (LOHAS Journal, 2007).

What's “Green?”

• How far must a company go to be considered a green business?

• How do you define a green business?

Which Cleaning Business is “Green?”

1. Uses nontoxic products for residential and office cleaning.

2. Uses its own homemade products and packages into reusable kitchen spray bottles; no shipping required.

3. Like #2, but limits is geographic service area to one neighborhood and employees ride their bikes, eliminating the need to drive.

All three could be described as “green” even though they vary considerably on where they fall on the continuum in terms of sustainability and environmental commitment.

Scott Cooney in Build a Green Small Business defines it as one that incorporates the following attributes of environmental commitment into its business plan:

1. Incorporates principles of sustainability into each of its business decisions.

2. Supplies environmentally friendly products or services that replace demand for non-green products.

3. Greener than traditional competition. Organic farming is clear cut. Many businesses are not.

– Is a bike shop green? Downhill Mountain bikes? Likely need to be driven to the mountain and then carried up by chair lift. As opposed to a bike shop that sells commuting and road bikes ride right from their house.

4. Commitment to environmental principles in its business operations.

What Green is Not

The trouble with green is that it implies just “environmental.”

But sustainability – living and doing business in ways that don't erode the potential for future generations – is commonly referred to as the triple bottom line (TBL) of economic, environmental, and social benefit.

It should not be separate from business strategy and operations; it is about integrating social and environmental concerns into business strategy and operations.

Caution!

• However, “green” is not just another sector to target like childcare, arts, or food.

• What makes green different is that it represents a specific philosophy and set of values about operating a business.

• The green business conserves natural resources, eliminates waste and stays ecologically in balance. It implement beliefs, policies, and practices that improve the quality of life for their customers, their employees, communities, and the environment.

The Way It’s Been…

• For most of us, our mission drives us to focus on a double-bottom line agenda

– our own bottom line and

– measuring social impact – jobs, dollars loaned in distressed communities, MWBE financed, increase in assets, income.

• However, we recognize that our communities, especially low-income individuals, suffer as a result of unsustainable business practices.

TBL: The New Approach to Community Development

• The triple bottom line (TBL) approach to CDFI investing has emerged because practitioners see the opportunities and impact by embracing environmental issues.– Economic Feasibility or financial merits of the project to

your bottom-line.

– Equity contribution of the project to individuals and families in the form of good wages, ownership, asset-creating opportunities for the underserved; and

– Benefits and effects of the project’s operations, products, services, supply chain and related policies and practices on the environment.

The Triple Bottom Line Collaborative: CDFIs and Triple Bottom Line Lending, Opportunity Finance Network Innovation Guide, 2007, pg 5.

Guest Presenters

Liz Penney, Director of Community Outreach

• Our mission is to provide Access to Capital, Connections, and Education to help new and existing small businesses.

• ACE provides loans of $500 to $50,000 in 68 North Georgia counties, including the Atlanta metro area.

• ACE is an SBA Microloan Intermediary and CDFI.

• Since 2000, ACE has loaned over $4.5 million and created or retained over 1000 jobs.

About ACE

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A new brand…

Georgia Green Loans provides capital to start or expand an

eco-friendly product or service or “green” an existing business

What is Georgia Green Loans?

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1,917 unique visitors since May 2009; ranked high in Google due to blog, Facebook and Videos

Green industry businesses, including alternative energy, organic farming, recycling, conservation, green building and pollution prevention.

“Traditional” businesses who want to implement green products or services, make energy efficiency improvements, or become more sustainable.

Target Markets

“New jobs come from new young firms.”

Kauffman Entrepreneur Foundation, 2009

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Georgia Green Loans Advisory Council

• Guide the green loan program• Provide expertise in green business development• Bring connections to potential funders and individual

donors• Assist in guiding the establishment of Georgia Green

Loans in the state of Georgia• Leaders in the community and people with highly

respected skills in critical areas• At least two members will be current clients of GGL• 2 year term; meet quarterly• Examples: Georgia Organics, Southface Energy

Institute, foundations

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Customers:

Commercial

Public sector

Non-profit organizations

Goals:

Control costs

Save energy

Create a comprehensive energy strategy, and Achieve an excellent return on investment.

Success = SolarFlex Technologies

• Eastanollee, Georgia• Main produce: Blackberries• Currently three part-time

workers

GOALS:• Wholesale production• 15-20 local employees• Georgia Grown/Georgia Made

“This area used to be all textiles…it can become an agricultural force in Northeast Georgia”

- Arthur Thomas, Owner/Founder

Success: Georgia Mountain Berry Farms

• Energy efficient exterior doors using recycled materials

• Received loan for expansion

• Three employees added since loan was made

“Every component of our metal and glass doors is American Made! Plus, no one else is building these doors in the US.”- Israel Greene, Owner

Success: American Installation Corp.

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Success = Better for Babies, Inc.

• Inspired overseas Better for Babies, Inc. now has its roots firmly planted, and growing, outside Atlanta.

• Owner Leah Carter, opened her own manufacturing facility near her town’s square.

• Leah and her partner, Lauren Parker, operate local sustainable production, fair wages, green business practices, and an uncompromising commitment to quality products, innovation and customer service.

Little Beetle organic diapers and wool covers

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Georgia Green Loans Metrics

Demographic Data collected on all loans

Environmental Benefits?

• Energy conservation through reduction

• Energy efficiency improvements • Renewable energy generated• Toxic substances reduced, reused,

recycled or eliminated• Waste products reduced, reused,

recycled or eliminated• Water quality preservation• Water use reduction• Other?

Business Benefits?

Lower Fuel Costs Renewable energy created Toxic substances eliminated Waste costs reduced or eliminated Water quality enhanced Water use/cost reduced Other?

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• ACE has been awarded $700,000 through GEFA, Georgia Environment Facilities Authority, to provide small businesses in North Georgia, including metro Atlanta, with education, technical assistance and funding for energy efficiency strategies.

70 energy audit grants to small businesses 70 small business loans for energy upgrades 175 jobs created or retained Energy consumption measured to determine impact Work with industry groups to target high energy

users

* Calculated on ACE’s Georgia Green Loans multiplier

ARRA Commercial Energy Efficiency Grant

ACE Self Greening Initiativeas of 2/17/2010

Weatherize Video Conference Recycle and Green Policy

Goal:

•Reduce electrical costs associated with conditioning ACE office.

Steps Taken:

•Energy Audit has been conducted.

•Bids taken for Insulation and HVAC.

•Data capture spreadsheets created to capture effects and payoff

Status:

•Larry is discussing bids with partner, awaiting outcome

Goal:

•Reduce travel costs and Green House Emissions

Steps Taken:

•Discussed technology/equipment with James.

•Data capture spreadsheets designed to capture savings, payoff, and emission reductions

Status:

•Waiting on Green light to purchase equipment and set up Skype at various locations

Goal:

•Recycle, Reduce, Reuse through efficient workplace behavior

Steps Taken:

Weekly Recycling pickup service.

Recycling boxes added to make recycling easier.

Status:

•Need to brainstorm on ways to balance consumption and productivity.

•Create a policy that reduces office costs and promotes green behavior.

Results thus far…

• $770,000 in portfolio.

• Average green loan size of $23,610.

• Created/retained 100 full time and 4 part time green jobs.

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Collaboration with other lenders

• Collaboration with two other lenders: SBAC (Small Business Assistance Corp out of Savannah) and ACT (Albany Community Together, Inc.)

• When a business goes to the website to apply for a loan, their county selection automatically routes them to the organization that handles that area

• Recent approval by SBA to split non-served middle Georgia counties

Adam KrynickiGreen Microfinance Program ManagerMichael Scott Mater Foundation

Background

• Founded in 2007, MSMF is a 501 (c)(3) non-profit organization that builds sustainable communities.  We’ve been operating a micro loan program in Peru with a 100% repayment rate for 2 years. 

• The Green Micro Loan Program was started in November 2010 and serves new businesses and existing businesses.  The program consists of 3 steps:  a business planning class, a loan application, and review by an advisory board. 

• Incorporating sustainability principles in the training.

MSMF Green Loan Fund

• Business must be environmentally sustainable to be eligible for funding. 

• Seed Funding : – Loans up to $2,000 – No credit Check, no collateral– Flexible Loan Terms

• Germination Funding:– Loans up to 10,000– Credit Check Required, but will work with those with low credit

scores

• High Growth Loan– Must currently have a business plan and a licensed business.– Credit Check Required, but will work with those with low credit

scores.

MSMF Green Loan Fund

• Partners

• Outcomes

• Lessons Learned Thus Far

• Key Learning Questions

Questions and Discussion

Issues for Discussion Identified by Members