Micro lending for Small Businesses

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Even before the credit crunch, the smallest of small businesses had trouble getting loans.

The reasons why are many: Sometimes traditional lenders view them as too risky, or the credit pro­files of the small business owners are poor. Some entrepreneurs don’t have enough collateral.

Enter microfinance companies, or micro lenders, like Congress Heights Community Training & Development Corporation, here in Ward 8. These nonprofit organizations help fill in the gap, lending money — usually no more than $35,000, but often even smaller amounts — to companies with just a few employees. And their guidelines for lending are much more flexible than the traditional banks.

Nearly half of the millions of dol­lars in loans from 100 micro lenders go to startups, according to data from MicroTest, a project run by the Aspen Institute’s Microenterprise Fund for In­novation Effectiveness Learning and Dissemination (FIELD).

“Micro lenders provide one-on-one assistance and training for small businesses in addition to loans,” said Tamra Thetford of FIELD. So a talented guitar repairperson that needs help with Quickbooks or an entrepreneur who wants emotional support dur­ing the launch of his or her business can get that sort of help from a micro lender.

The following 10 lenders are the largest in the country based on the number of loans disbursed in fiscal year 2009. Thetford, who is compiling a new list, said that she expects the ranking to stay pretty much the same.

These nonprofits help all kinds of busi­nesses. Yours could be one of them.

1. Accion USA

2. Accion Texas

3. Justine Peterson Housing

4. Accion Mexico-Mexico-Colorado

5. Accion San Diego

6. Opportunity Fund

7. Accion Chicago

8. Women’s Initiative for Self Employ­ment

9. Business Center for New Americans

10. ACE

 

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