By John Cropley
The Daily Gazette, Schenectady, N.Y.
WWR Article Summary (tl;dr) The Community Loan Fund gets business owners past that initial hump with a loan or line of credit and sets the stage for them to continue on their own.
Small contracting businesses owned by women and minorities are eligible for a boost as they try to surmount the obstacles to growth or even survival.
The new Jobsite Financing program is a continuation of the work the Community Loan Fund of the Capital Region has been doing since it was founded in 1985 — helping entrepreneurs from disadvantaged backgrounds overcome the challenges to founding and growing a business.
The Loan Fund has long focused on groups under-represented in the ranks of business owners: Minorities, women and lower-income individuals.
Jobsite Financing specifically focuses on the construction industry.
And it is starting off with a Schenectady focus — the Loan Fund is partnering with The Community Builders, Schenectady Works and the Social Enterprise and Training Center.
Community Loan Fund President Linda MacFarlane said MWBEs — minority- or woman-owned business enterprises — face greater challenges than other new small businesses, which have a fairly high casualty rate to begin with.
Outright bias notwithstanding (and that occasionally may still rear its head, MacFarlane said) the challenge comes down to money and experience. Women and minorities tend to have less of both.
It’s a Catch-22 of sorts: They need to establish a line of credit to float their expenses between paydays but have trouble qualifying for a line of credit without a track record of experience and profits, They can’t build a track record if they don’t have money to buy their equipment and market themselves.
The alternatives are unattractive: self-finance or take out a loan at an exorbitant interest rate.
The Community Loan Fund gets businesspeople past that initial hump with a loan or line of credit and sets the stage for them to continue on their own.
Not everyone is suited to be a business owner initially, and some never are.
“We try not to say no,” MacFarlane said. “There are some cases where we have to say no.”
As a certified community development financial institution, the Loan Fund takes numerous steps before it grants a loan, including a credit check, business plan review and reference check. It also tries to pave the way for entrepreneurial success, with pointers on parts of the business plan that could be improved, technical assistance and an eight-week course at The College of Saint Rose.
“Before we will entertain a loan request we will work with people to make sure they have a good understanding” of what running a business entails, MacFarlane said. “We make sure people are ready for business ownership before we give them a loan.”
It can be harder for women and minorities to break into a field where they have been few in number, MacFarlane said, but it is worth persevering: Construction jobs are good jobs.
A GROWING FIELD
ReWire Energy in Saratoga Springs has gained help from the Loan Fund. While Milton Evans Sr. and his five sons — Alan, Glen, Ken, Lee and Warren — have a passel of college degrees and a variety of work experiences among themselves, they started out new in the energy-consulting field, trying to capitalize on the rapidly growing market for green energy and green structures.
ReWire helps developers and property owners get closer to net-zero or zero-energy status by improving onsite efficiency, installing clean energy generation onsite, and buying solar power generated off-site so that the facility’s net use of electricity generated from fossil fuels is minimized.
“As a small business it’s hard to get money,” Lee Evans said. “We didn’t have a track record. Lucky for us, there’s something called the Community Loan Fund. We would not be in business without them.”
It took about a year to accomplish, but ReWire gained state certification as an MWBE business, which can give it an advantage in seeking work on public-sector projects in New York state.
Asked if the six black men who run ReWire have encountered racial prejudice as they build their business, Lee said, “Nothing specific, but I will say this: There’s not many people out there who look like us in the energy space.”
Another incentive for him: “Black and brown people are disproportionately hit by energy costs,” he said, due to their lower average household income.
The family went into the solar energy field because of the economic opportunity, Lee said, not because of the high cost of energy for poor communities. But the inequality does exist, Lee said, and ReWire’s work to reduce energy consumption addresses that.
ReWire got a $25,000 loan from the Community Loan Fund to market themselves, buy equipment to do energy audits and develop software to improve their spreadsheet analyses of the many factors that go into making a zero-energy building.
Cori Rodriguez started as a manicurist two and a half years ago at the Mermaid Lounge when it was still in Glenville.
“When I left the Mermaid Lounge, I opened my own nail salon with technicians working under me,” she said Friday.
It wasn’t quite as simple as that — she needed startup funds to get her own space at on Jay Street in Schenectady and configure it as a nail salon, with specialized plumbing and ventilation.
“Without having been in business for two years, I couldn’t get a loan,” Rodriguez said. Banks she talked to also wanted to see unrealistic revenue figures — as much as $500,000 a year.
This is where, as a woman from a family of finite means, she ran into a roadblock.
“Lots of small businesses are popping up,” she said, “but with a lot of generational wealth behind them. With my family’s background, we do not have generational wealth.”
The same obstacle faces other black entrepreneurs as they try to launch their first venture, the Delmar native said.
“The Community Loan Fund was really my saving grace,” Rodriguez said. It helped her write her business plan and gave her a $25,000 loan.
She opened the doors of Cussin’s Nails in December with room for four manicurists and one pedicurist. Two of the stations are now rented to other manicurists, and a trainee is learning the craft.
“Technically it wasn’t a startup because I had been in business,” she added.
The Community Loan Fund serves Albany, Fulton, Greene, Montgomery, Saratoga, Schenectady, Schoharie, Warren and Washington counties. It provides loans up to $25,000 to help new businesses get established and up to $50,000 to help existing businesses expand.
The new Jobsite Financing program is a revolving line of credit for small businesses owned by women, minorities or people with low income (defined as 80% of the area HUD median). The line of credit can be used to pay employees, purchase supplies and cover operating expenses, including equipment rentals, insurance, and disposal fees.
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