“Capital is the gasoline in the engine that powers California,” said Dr. Glenda Humiston, state director of rural development for the USDA. And, connecting that fuel to small businesses is crucial to getting California moving again.
Access to capital was one of the five major areas delved into at the historic first annual California Economic Summit, held on May 11 in Santa Clara.
“Typically, when you discuss capital, people think Wall Street, investing in their mutual fund or going to one of the large banks and getting a loan,” said Humiston. “Those are still there as traditional ways to access capital. But, what we’ve discovered in the last several years, particularly after the great recession meltdown in 2008, is that those traditional sources have really dried up. Main Street business, local and regional businesses, and small manufacturing firms are not able to access those traditional forms of capital.”
The summit was billed as a way to change the conversation and truly find common ground on solutions.
“We hoped to see a broad-based participation from throughout the state – both urban and rural, small business and large business, government/private,” Humiston said. “I’m pleased to say, in looking at the audience, we really did have that kind of participation.”
Beyond participation, people actually collaborated, talked to each other, and shared ideas.
“We had tables set up at two different times during the day for people to roll up their sleeves and get to work,” Humiston said. “The buzz was really exciting. People were really digging in to finding solutions and making pledges to take action.”
At least 20 action items were developed in the capital area alone, and champions signed up to take the lead on pushing them forward within the next month.
Humiston told the CA Fwd Radio Show that capital solutions do not necessarily have to go through Sacramento.
“There are a few policy changes here and there that need to happen, but for the most part, there are a lot of different ways to access capital out there, and most people just don’t know about them,” she said. People need to be educated about the options that are out there, and those providing resources need to be better coordinated.
“Organizing that kind of collaboration is going to be really high on our priority list, as well as creating platforms using new technology that will allow easy access to information on capital and subjects related to that.”
Other solutions are to have “smaller community financial institutions pool their funds so they can reduce transaction costs by sharing underwriting,” as well as business mentoring and technical assistance to those offering capital.