Microloans are also available in the private sector, through
Web-based operations like international organization ACCION, women-friendly
Count Me
In, and community efforts like Ukiah, California-based West Company.
These organizations promote economic growth by lending to
entrepreneurs who fall outside the radar of traditional
lenders.
Homebased business owners who have used microloan programs rave
about them. "Necessity is the mother of invention," says
Sharon Johnson, a New York City-based jewelry artisan. "Just
because your income is low doesn't mean you can't be
creative." The former welfare recipient presented a business
plan to Accion and was given a small loan of $1,500 to buy a
printer and some design software. Johnson says her new equipment
improved her Web site and catapulted her into e-commerce. Today,
her jewelry is sold at 10 New York stores, and she has three
part-time employees.
Another ACCION loan recipient, Neela Bawa, tells a similar
story. Twenty years ago, Bawa moved to Chicago from her native
India with her husband and two young sons. She brought along a
strong sense of her own culture and visions of bringing part of it
to her new life in the United States. To make ends meet while
getting her degree and raising her children, Bawa decided to import
Indian fashions to the United States. "I had a dream that one
day I would dress up the world," she recalls.
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Connecting with exporters from India, Bawa started her business,
Neela's Selections, in 1996. But with importing inefficiencies
and her busy schedule, she found that the only outlet for her goods
was at an annual exposition for international merchandise.
In the summer of 1999, with the annual exposition fast
approaching, Bawa's business hit a wall. Recently divorced, she
was left with no credit history of her own. She couldn't afford
to import the goods she needed, and nobody would give her a
loan.
She approached the SBA for a $5,000 loan but was turned down.
Then the SBA recommended that Bawa apply for an ACCION Chicago
loan. She contacted them and was approved in time for her annual
conference. "Without the loan, I could never have ordered the
merchandise I needed," Bawa says, "and I would have lost
out on my best sales opportunity of the year."
Other homebased entrepreneurs feel just as fortunate. Geneva
Francais, a 65-year-old caterer known for her succulent salad
dressings and meat marinade sauces, used a $1,500 Count Me In loan
to build storage shelves in her kitchen where she bottles her
vinegar-based sauces, Geneva's Splash. Her target market is
upscale grocery stores. Francais turned to Count Me In because, she
says, "A bank will not loan a woman money when she's 65
years old. It's just as simple as that."
Brian O'Connell is a Framingham, Massachusetts-based
freelance business writer. His most recent book, B2B.com
(Bob Adams Media), is available this September. His earlier
books, Generation E: How Young Entrepreneurs are Changing
the Corporate Landscapeand The 401(k) Millionaire, are available in
bookstores. A frequent contributor to many national business
magazines, he can be reached at Bwrite111@aol.com.
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