Microloans can help tiny businesses
Posted
at
9:50 am
by Mike Benbow
Here's a story by Ina Paiva Cordle of McClatchy Newspapers on a microloan program in Miami, Fla., that is helping the smallest businesses (the kind banks don't talk to) get on their feet.
MIAMI — Elvita Francois proudly shows off a shiny new buffet counter at her tiny restaurant inside the Opa-locka Flea Market, where she serves Haitian and Latin specialties like goat, oxtail and congris.
As an entrepreneur operating on a shoestring, Francois didn't have the means to buy that counter — or other equipment like a refrigerator, freezer and stove that she had to replace soon after she drained her savings to purchase Job Restaurant four years ago.
So she turned to OUR MicroLending, a Miami-based lender and worked out a loan for a little more than $2,000.
“They helped me a lot,” said Francois, 58, who lives in North Miami Beach. “I didn't have money in my hand to even buy food.”
With banks cutting back on lending during the past two years of financial crisis, microlenders are seeing a rise in demand, as small businesses still require credit to keep their businesses afloat.
OUR MicroLending focuses on the smallest of small businesses that can't get traditional bank financing, said Emilio Santandreu, president and chief executive.
“They are at the base of the pyramid,” Santandreu said. “All the economy begins there.”
Those entrepreneurs — in south Florida, many of them immigrants from Latin America and the Caribbean — include truck drivers, landscapers, mobile car washers, hot dog sellers, flower cart owners, mechanics and mini-market operators.
The businesses typically have fewer than five employees, with sales of $100,000 or less, Santandreu said. “Most of the time, the whole family works in the business.”
OUR MicroLending is owned by a group of 13 investors, mostly Venezuelans. Some of the shareholders, including Santandreu, had owned a microlending business in Caracas, Banco de Desarollo del Microempresario, before moving to Miami and opening OUR MicroLending in October 2007.
The investors fund the loans, which range from $1,500 to $12,000, and average about $5,000. The average term is a year.
The money is generally needed to buy equipment or inventory to expand or improve the business, as well as meet payroll, said Elieser Gonzalez, vice president of sales and marketing.
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