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Program boosts entrepreneurs in Washington State – Washington Community Alliance for Self-Help

Entrepreneurs are known as an independent and self-reliant lot. But some like a little coaching — and more than a little support.

By Angel Gonzalez
Seattle Times business reporter

That’s the idea behind a micro-loan program called Washington Community Alliance for Self-Help, http://www.wa-ilsc.org/businessopportunity.html which teaches business basics to low-income entrepreneurs and loans cash to some to start businesses. The alliance has several branches in the state, including one in Everett that began last October.

The program lends from $500 to $5,000 mostly to women, people with disabilities, and new immigrants and refugees — groups that traditionally have a tougher time getting business loans, especially in a struggling economy, said Maya Sullivan, program coordinator of the Everett alliance. The loans don’t require collateral and are paid back with 8 percent to 12 percent interest.

Micro-loan programs originated in the Third World, when nongovernmental organizations realized that giving loans to small entrepreneurs helped breathe life into struggling economies. The system, inspired by a formula developed by the Grameen bank in Bangladesh, is based on peer support.

For eight weeks, aspiring entrepreneurs attend daily classes on business fundamentals such as marketing and accounting. Graduates form groups that become involved in the creation of each member’s business plan and loan application.

"It’s a great support system," Sullivan said. "It can be very lonely to run one’s own business."

The members of the group decide who gets loans and make sure borrowers repay the money on time, because all members of the group are responsible for the loans.

"We have a repayment rate of 97 percent, which is extraordinarily high," Sullivan said.

But members of the alliance are looking for more than money.

"I’m not planning on taking a loan," said Tiffany Meek, who runs a hair salon for children. "I’m here for the exchange. We essentially bounce ideas off each other. We all have a different skill."

Others are in the alliance to learn business fundamentals.

"Without the training, we wouldn’t be in business," said Carol Muñoz, who owns a gift-basket business with her husband.

And some appreciate the cheerleading.

"They have given me support when I have wanted to quit," said Penny Draper, who runs a sausage business called "4th generation," a name recognizing that she and her husband are part of the fourth generation of African Americans born since the end of slavery.

Interest and loan repayments are not enough to cover the program’s expenses, so the alliance relies on contributions from Everett, Verizon and Zonta, an international organization that promotes the advancement of women. The alliance also relies on volunteers to mentor the aspiring entrepreneurs.

Micro-lending is a national phenomenon, and organizations such as Boston-based Accion USA and New York-based Count Me In provide financing in several states. A $1,400 loan from Count Me In, which offers financial assistance to women, enabled Erin Jolly and Josie Woods to open a hair salon in Marysville.

"I tried going to my personal bank and a couple of other banks," Jolly said. "But none called me back. Part of the reason is that I had filed bankruptcy when I was married."

The salon opened in April.

"So far it’s succeeding," Jolly said.

Angel Gonzalez: 206-464-3312 or [email protected]

Copyright © 2003 The Seattle Times Company

http://seattletimes.nwsource.com/html/businesstechnology/135204735_microloan09n.html

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