New Microloan Program To Help Women Start Own Business

By Kyle Wind The Times-Tribune, Scranton, Pa.

A new wave of entrepreneurs could be coming to Lackawanna County.

The Scranton Area Community Foundation and partners are spearheading a new microloan initiative designed to give low-income women a chance to pursue their dreams.

The program is modeled after a Grameen Foundation microlending initiative and targets area women who might be down on their luck but still have viable ideas to start businesses, explained Scranton Area Community Foundation Chief Executive Officer Laura Ducceschi.

"There are a lot of reasons why women can have a plan and the ability to move forward but not be able to access that capital," Ms. Ducceschi said. "We want to be able to fill that gap."

Females are underrepresented as business owners in the national economy, and the trend is more pronounced in Northeast Pennsylvania, the most recent U.S. Census data show.

Nationally, women owned 28.8 percent of businesses, a 2007 survey found. In Pennsylvania, its 27 percent, and in Lackawanna County, women were either sole owners or majority shareholders in 23.5 percent of businesses.

Many times, their ideas are just out of their grasp because low-income women lack collateral lenders want, have poor credit or want to borrow an amount banks don't think is worth their time.

"They can't get a traditional bank loan, and they don't even need that much money," said Lisa Hall Zielinski, director of the University of Scranton's Small Business Development Center.

The plan is to provide as many as 20 loans between $1,000 to $10,000 over the next two years as part of the part of the broader Women in Philanthropy initiative that also focuses on health and wellness; science, technology, engineering and math education; and financial well-being.

The loans, administered by MetroAction, have a payback period of up to four years and carry a 6 percent interest rate.

To qualify, women need to go through the six-week StartUP course offered by the Women's Entrepreneurship Center, a partnership between the Small Business Development Center and Kania School of Management.

The first 18 eligible graduates will be finished with the program within a few weeks. Women who want to take their ideas to the next level will submit tangible business plans and get mentors from a network of female business and financial experts who are joining the Women in Philanthropy initiative.

The volunteers will vet the plans and help applicants refine them until they are ready for prime time.

Ellen Burkey, a financial advisor for Ameriprise Financial Services in Clarks Summit, teaches for the StartUP program and plans to volunteer as a mentor. She sees herself in some of the women who are striving to get ahead.

Even though she once worked on Wall Street for Goldman Sachs, the North Abington Twp. resident knows what it's like to hit a rough patch.

When she and her husband moved to the region about 12 years ago, she decided to stay home with their children while her husband worked for Thomson Consumer Electronics -- until the 1,070-job plant in Dunmore closed.

"I have had struggles, big struggles," she said. "I have been there, deciding which bill to pay."

Mrs. Burkey knew she was lucky to have the skills she did and recovered. She enjoyed the idea of helping someone else rise above their situation and also thrive.

"I'm hoping 10 years from now, I will see their store open on Adams Avenue," she said. "How great would that be?"

Ms. Ducceschi saw the initiative as an economic development program aimed at reducing intergenerational poverty.

She envisioned success with microloans snowballing for people who get involved with the program as they get better credit and can qualify for other programs like Small Business Administration loans.

The foundation was $99,000 away from hitting its $900,000 fundraising goal to support the Women in Philanthropy initiative this year and has a long-term goal of raising another $1 million toward the program's endowment fund.

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