create / 2018
Entrepreneurs, Advocates, and Lenders Mobilize to Protect the Rights of L.A. Small Business Owners.
Please describe the activation your organization seeks to launch.
The activation will build awareness among entrepreneurs who are often prone to predatory lending and strategically create/advance a policy agenda that advances responsible lending. Angelenos and LA-based business owners will help drive these efforts through active storytelling and advocacy. Predatory lending is harmful to business owners, their families and communities, and our City of Angels, and we are activating a movement to lift up the voices of Angelenos and fight back.
Which of the create metrics will your activation impact?
- Gini coefficient
- Jobs per capita
- Minority- and women-owned firms
Will your proposal impact any other LA2050 goal categories?
- LA is the healthiest place to LIVE
In what areas of Los Angeles will you be directly working?
- Central LA
- East LA
- San Gabriel Valley
- San Fernando Valley
- South LA
- South Bay
- Antelope Valley
- County of Los Angeles
- City of Los Angeles
How will your activation mobilize Angelenos?
- Advocate for policy
- Digital organizing or activism
- Trainings and/or in-person engagements
- Encourage businesses to change practices
- Increase participation in political processes
- Influence individual behavior
Describe in greater detail how your activation will make LA the best place to create?
Entrepreneurship is vital to a thriving Los Angeles, but access to the capital necessary to start and grow a small business continues to be a serious problem. Research from Small Business Majority finds that 91% of small business owners identify this as a top area of concern. When small business owners are denied a traditional loan, many turn to high-cost alternative financing sources. Opportunity Fund research has found Los Angeles business owners face APRs of an average of 94%. These high-cost products can jeopardize businesses, homes, and families and leave a vacuum in communities should these businesses fail. This is particularly true for women and minority entrepreneurs, who are less likely to be approved for traditional loans than their white male counterparts.
To address this issue, the RBLC formed in 2015 to support responsible practices in the small business lending sector. We have created the Small Business Borrowers’ Bill of Rights (the Rights)—a set of practices lenders and brokers adhere to when financing small business owners—and are now planning an intensive LA-focused campaign to activate Angelenos around responsible lending through education and policy advocacy. By creating momentum among the county’s small business and entrepreneurial community, we can push for stronger protections against predatory lending and better support those most affected by discriminatory and predatory lending practices, in particular, women and minority entrepreneurs working to start and grow their firms.
In our education campaign, we will create and disseminate materials to ensure that entrepreneurs know the following: 1) their rights when searching for a loan, 2) which responsible lenders operate in their area, and 3) which questions to ask to ensure they find a responsible loan. We will compile an LA-specific online toolkit with this information and share it with our networks and with local business organizations for distribution to their networks. We also will conduct in-person educational events for local entrepreneurs. These events will be open to all, but we will focus our outreach on engaging women and minority entrepreneurs to better support their ability to protect themselves from predatory lenders.
We also will create and advance a policy agenda informed by feedback from LA entrepreneurs. To advocate for stronger legal protections, we will collect stories from small business owners who have been trapped by predatory lenders, and we will share these stories widely. We will train small business spokespeople to speak with the media and send opinion pieces to local outlets. We will meet with local government leaders to elevate the issue, and we will connect our spokespeople with their elected representatives to ensure that policymakers understand the detrimental impact of predatory lending on local business. These activities will raise public awareness about this issue and push for reforms to current lax lending laws.
How will your activation engage Angelenos to make LA the best place to create
To make LA the best place to create, we will engage Angelenos in building a large-scale movement to fight for fairness in small business lending. We will create an LA-focused website that connects all strategies used during our campaign. The site will house our resource toolkit on avoiding lending traps, provide referrals to local responsible lenders, detail how to speak out against predatory lending and connect Angelenos with their elected officials.
Our educational events, held at accessible locations across the county, will provide practical information on how to obtain responsible capital. Whenever possible, we will include representatives from local responsible lenders to present with us, and we will provide referrals to local business assistance organizations for entrepreneurs who need additional support.
We will raise public awareness about predatory lending and our available resources through a strategic traditional and social media campaign. We will widely distribute the personal stories of our spokespeople, and we will activate Angelenos to contact their elected officials to advocate for greater lending protections via lobby days and campaigns. To further extend our reach, we will create a marketing toolkit to help our business partners share this information with their members.
Through this combination of practical education, increased public awareness and advocacy for sensible policy, we will make LA a national leader in the fight against predatory lending.
Please explain how you will define and measure success for your activation.
Our ultimate goal is for all entrepreneurs and small business owners to have access to responsible capital and protection from predatory lenders. To work toward this goal, we aim to raise public awareness of the problem, increase the number of lenders who support the Rights, and advocate for beneficial policies at the local, state and federal levels.
To measure our progress, we will track the new resources we create, including our educational and marketing toolkits, LA-focused website, and other appropriate materials. We will track outreach and educational event dates, locations, cosponsors and attendance numbers. We will compile a list of business and advocacy agencies with which we partner, and we will track how many partners distribute our materials to their memberships. We also will track the number of visitors to our website, media placements and spokespeople engagement, along with the number and type of social media campaigns we launch and how many engagements we receive through review of clicks, tweets and other channel-sponsored data-capturing systems.
We will track our media activity around relevant legislative issues, participation in public discussions and educational meetings with policymakers. We will track whether policies are introduced or debated at the local or state levels. We also will track the increased number of Rights signatories and endorsers we engage over the course of this campaign.
Where do you hope this activation or your organization will be in five years?
In five years, we hope that every Angeleno small business owner can easily access affordable, responsible capital to start and grow their business, regardless of where in the county they are located or what language they speak. Individual business owners and their advocates will be well-informed about their options and their rights when seeking financing. Lenders will face significant market pressure to deliver quality products or face declining business. Policymakers will recognize and act on their knowledge that small business owners deserve basic consumer protections.
We believe Los Angeles will be leading the way nationwide in demonstrating why and how a healthy financial ecosystem for entrepreneurs creates good jobs and thriving communities. The Small Business Borrowers Bill of Rights will be well known and used by business owners, their advocates, lenders, and policymakers across the nation.