In the Summer of 2012, CHSR was awarded a contract to study the Small Enterprise Economic Development (SEED) program.

The SEED program is a “character-based” lending program with the goal of supporting and financing entrepreneurs who have been unable to obtain the resources necessary to start or expand a small business through traditional sources. The program operates as a partnership between Empire State Development, the University at Albany, and the State Employees Federal Credit Union (SEFCU). The program offers entrepreneurs support and mentorship, as well as loans of up to $35,000 that are approved using a character-based criteria system. Support services are provided through the New York State Small Business Development Center in Albany, which runs entrepreneurial training courses for participants, and the University at Albany, which offers hands-on assistance from graduate students and faculty who can provide expertise and assistance with tasks such as business plan development and market analysis. Financing is provided by SEFCU, which offers loans of up to $35,000 for program participants that successfully complete the program training, pass a character-based lending assessment, and present a satisfactory business plan.

Evaluation & Research

Because the SEED program is still relatively new, CHSR focused on a formative evaluation approach that focused on identification of process strengths and continuous improvement. CHSR sought to examine how SEED impacts several important stakeholders who may potentially benefit from the program: fledgling entrepreneurs, economic developers, and lenders. For entrepreneurs, the impact of SEED will be in helping develop successful and lasting businesses; for those interested in economic development, SEED could have an impact as a way of growing employment and generating new wealth; for lenders, the importance of SEED lies in the character-based lending approach and how these loans fare relative to commercial loans that undergo a more traditional underwriting process.

For more information, contact Rose Greene