Entrepreneurship

Our goal is to increase housing, business, wealth, and employment opportunities. We lend for housing, business-start-up, acquisitions, or expansion. P-Solutions trains and cultivates entrepreneurs from the pool of unemployed, and assists trained entrepreneurs and small businesses to build and invest in businesses providing and preserving jobs and other economic gains to the economically disadvantaged individuals and families and distressed communities.

What is the EEOP-IDA Program?

Empowerment and Economic Opportunity Program Individual Development Accounts (EEOP-IDA) provides IDA savings match, at the rate of 1:1, to low-income participants in California.  EEOP-IDA also: (1) Provides free Financial Literacy Seminars to low-income families; (2) Helps qualified low-income persons with information about earned income tax credit; and (3) Provides free IRS tax preparation, while focusing on helping them determine if they qualify for the earned income tax credit (EITC).  EEOP-IDA is an Assets for Independence (“AFI”) project funded by AFI (50%) and P-Solutions’ Private Donors (50%).  AFI projects provide Individual Development Accounts (IDAs) and related services to low-income individuals.

What are IDAs?

IDAs, or Individual Development Accounts, are special matched savings accounts designed to help families and individuals of modest means establish a pattern of regular saving and, ultimately, purchase a “productive asset.” A “productive asset” is something of value that is likely to return substantial long-term benefits to its owner — benefits like security, stability and opportunities for more income. EEOP-IDA participants may use their savings and match money toward any one of three productive assets: a home, a small business, or post-secondary education.

IDAs are necessary because low-income families need productive assets if they want to escape poverty and achieve economic self-sufficiency. Right now, the federal government wisely and successfully helps the middle class acquire assets (through, for example, the home mortgage interest deduction and tax breaks for saving for college) but does not have a way to help the underprivileged acquire those assets. IDAs, through the use of matching deposits and supportive nonprofit organizations, help low-income families acquire both the capital and skills they need to “jump start” their lives, set goals for their future, and integrate themselves into the mainstream economy. IDAs are not hand-outs; they are investments in people who are willing to first save and invest in themselves.

IDA funds are paid directly to the asset intermediary (e.g., to the title company, university registrar, or business product or service provider). In addition, written authorization from the nonprofit is required for all withdrawals. Matching funds are held in a matching account and can never be accessed directly by the participants, but are dispersed on their behalf at the time of asset purchase. Also, participants must save in the program for at least six months before they are eligible for any accrued match money. Finally, all IDAs must be held by a federally insured financial institution. Fraud or misuse of an IDA are, therefore, quite unlikely.

Accounts are held at local financial institutions. Contributions by low-income participants are matched using both private and public sources. All participants receive economic literacy training that includes workshops for cleaning up one's credit, setting up a budgeting and savings schedule, and other basics of money management.

Eligibility for EEOP-IDA

1. Income and Net Worth

• Under 200% Federal Poverty Level or
• Eligible for the Earned Income Tax Credit and
• Net worth cannot exceed $10,000

1. 2. Households that qualify to receive TANF

1. 3. Participants must have a valid social security or Individual Tax Identification Number (ITIN);

1. 4. Participants must be at least 18 years old;

1. 5. Participants must reside in California.

Household Defined

• The term “household” means all individuals who share use of a dwelling unit as primary quarters for living and eating separate from other individuals.

Net Worth Test

• The net worth of the household, as of the end of the calendar year preceding the determination of eligibility, cannot exceed $10,000.
• The net worth of a household is the amount equal to the aggregate market value of all assets that are owned in whole or in part by any member of the household, minus the obligations or debts of any member of the household.
• For the purpose of determining the net worth of a household, a household’s assets shall not be considered to include the primary dwelling unit and one motor vehicle owned by a member of the household.

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