EXECUTIVE OFFICE OF THE PRESIDENT
OFFICE OF ECONOMIC OPPORTUNITY
ECONOMIC OPPORTUNITY PROGRAM

Employment and Investment Incentive Loans

This section is included for information only. This program will be operated with the capital of the Small Business Administration Revolving Fund. Consequently, no appropriation is being requested for this purpose within the Economic Opportunity Program.

Pursuant to the authority contained in Title IV of the Economic Opportunity Act, the Administration, under delegation from the Director, Office of Economic Opportunity, will administer a program of financial assistance to very small business concerns and to qualified persons seeking to establish such

concerns.

Loans are authorized in an amount not to exceed $25,000 for a maximum term of 15 years to assist in the establishment, preservation and strengthening of small business concerns. Provision is made for management training courses as an integral part of the loan program. The businesses to which these loans are directed are mostly retailers and service enterprises, employing for the most part three or fewer persons luncheonettes, filling stations, drugstores, barbershops, delicatessens, beauty parlors, shoe repair establishments, furniture movers, cleaners and tailors, and the like.

The credit and collateral requirements contemplated by Title IV are more flexible and relaxed than those applicable to loans made under the provisions of the Small Business Act. While a lien will normally be taken on property acquired with the proceeds of a loan, the decision as to the worth of a loan will j depend largely on the applicant's management ability, his earnings and credit record, the response he has shown in the past to financial obligations, and his prospects for success.

In this first year of operation, applications will be accepted only from "poor" applicants or those on the verge of poverty, and only in areas with approved community action programs.

During the last ten months of fiscal year 1965, it is estimated that loans amounting to $6,500,000 will be approved. This is based on an estimated monthly average of approximately 144 loans being approved at an average size of $5,000 each. (SBA share).

Program and Financing (in thousands of dollars)

Program by activities:
Operating costs, funded:

2. Community action programs:

(d) Migrant agricultural employees program:

3. Rural areas program:

Changes in selected resources

(undisbursed loan obligations).

Financing:

R-1

Program and Financing (in thousands of dollars) continued