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Policy Issues

Entrepreneurship

Many of our country's lowest-income workers turn to self-employment as a means of creating a job or to supplement a low-wage job. Entrepreneurship can be a pathway out of poverty, but many entrepreneurs are in need of support. Unfortunately, millions of Americans involved in microbusinesses (defined as businesses that require $35,000 or less in start-up capital and have five or fewer employees) or small businesses face disadvantages in establishing and operating their own businesses, including women, minorities, low-income individuals and people with disabilities.

Fact File: Microbusinesses: Exploring a Proven Tool for Wealth and Equity | Fact File (August 2016)
The value of American microbusinesses accounts for nearly one-fifth of all household wealth in the country, making it the largest source of wealth next to homeownership. More than 90% of small businesses have four or fewer employees, including the self-employed.

Unstacking the Deck: Towards Financial Resilience for African-American Entrepreneurs in the South | CFED Report (June 2016)
This field scan marks the beginning of a research-driven initiative which aims to create and enhance solutions that help financial vulnerable African-American entrepreneurs weather cash flow difficulties and achieve financial well-being through business ownership.

Achieving Financial Security through Entrepreneurship | Federal Policy Proposal (August 2014)
Concrete recommendations for how federal lawmakers can open doors to entrepreneurship for low- and moderate-income individuals.

Cash Flow is King: Microbusinesses’ Greatest Financial Needs | Federal Policy Brief (April 2014)
This brief explores the policy implications of CFED’s research on the sources of microbusinesses’ financial instability.

Enhancing Support for Lower-Income Entrepreneurs through Major Public Systems | CFED Report (January 2014)
This report identifies opportunities for policymakers to ensure that current and aspiring low- and moderate-income entrepreneurs can successfully start and run businesses that contribute meaningfully to their families’ financial security.

Microbusinesses: America’s Unsung Entrepreneurs | Fact File (May 2013)
The vast majority of small-business owners run firms with five or fewer employees (often called “microbusinesses”), but when it comes to research and policy that focus on small business, most emphasize the minority (fewer than five percent) who employ more than 20 workers.

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More Resources

Innovations in Microbusiness: Enhancing the Financial Security of Low-Income Entrepreneurs | CFED Report (January 2014)
This report offers an overview of the emerging models of practice in microbusiness development, including lessons learned from our partners and other organizations. We recommend actions that practitioners, funders, and policymakers can take to support the growth of these models of practice.

In Search of Solid Ground: Understanding the Financial Vulnerabilities of Microbusiness Owners | CFED Report (April 2014)
Microbusiness owners’ business and personal finances are often inextricably tied, and many are dealing with significant financial vulnerabilities that reach far beyond access to credit.

New Entrepreneur Tax Credit | Policy Innovation Brief (2010)
Policy innovations are new and creative approaches to addressing social issues – such as how to help disadvantaged entrepreneurs reap the bene¬fits of formalizing their businesses – that have the potential to reach thousands or even millions of people.

Using Insights from Behavioral Economics to Improve Microlender and Borrower Outcomes | CFED Report (January 2014)
This report identifies opportunities for policymakers to ensure that current and aspiring low- and moderate-income entrepreneurs can successfully start and run businesses that contribute meaningfully to their families’ financial security.

Constructing a Complete Continuum of Tax Assistance for Microbusiness | From the Field (September 2013)
Many business owners struggle with keeping detailed financial records, filing taxes and navigating the tax system when they run into problems with the IRS. They often need help understanding their tax filing responsibilities, completing their returns, and resolving tax issues that threaten their businesses and their families’ financial security.

Crowdfunding for Microbusinesses | From the Field (September 2013)
Many underserved entrepreneurs have a hard time accessing traditional business credit or borrowing from friends and family for loans as they launch startups. This brief shares solutions from an innovative service provider and explores market and policy barriers and opportunities.

More Microlenders, More Credit: Leveraging Online Loan Platforms | From the Field (September 2013)
The microlending field is not yet capable of meeting the overwhelming demand for their products from underserved entrepreneurs. This brief shares solutions from an innovative microlender and explores market and policy barriers and opportunities.

Federal Stroke of a Pen Guide: Microenterprise Development and Entrepreneurship Training | CFED Report (April 2012)
This guide to achievable federal policy includes potential microenterprise supports from the Department of Labor, the Small Business Administration, and more.

State Stroke of a Pen Guide: Include Microenterprise Development in Existing Programs and Funding Streams | CFED Report (November 2011)
This guide to achievable state policy includes information on microenterprise development as a strategy for income generation and economic revitalization.



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