Posted on 03/08/2009 6:53:52 PM PDT by 2ndDivisionVet
NEW YORK—When Amy Sokoloff and John Powell were trying to start their art restoration business in New York City, they needed some working capital. But banks weren’t willing to take a chance on them.
“We didn’t own anything — no houses, no cars, we had no collateral,” Sokoloff said. Powell added, “No one wanted to talk to us. They were not interested, and they were not nice about it.”
Sokoloff and Powell ended up on the doorstep of ACCION USA, a not-for-profit group patterned after the Third World microfinance institutions best known for providing money to Moroccan farmers for breeding chickens or to Bangladeshi women for weaving supplies.
The $15,000 loan they got in 2005— which they paid back in two years — got them the sunlit studio where their Chelsea Restoration Associates brings aged, damaged oil paintings back to life. Last fall, after the U.S. downturn began to cut into their business, they went back to ACCION USA for a $25,000 loan, “a tremendous help for cash flow” with an affordable 10.9 percent interest rate, Sokoloff said.
Sokoloff and Powell are among thousands of Americans using microcredit, a financing system originated in the Third World, to help open small businesses or get through rough spots. While the dollar amounts are much bigger in the U.S. than the tiny loans in developing countries — some for less than $10 — the principle is the same: a financial stake that lets people in need better their lives.
Now, with the recession deepening, U.S.-based microlenders say they are seeing an increase in inquiries from would-be borrowers, including startup entrepreneurs seen as too risky by banks and other traditional lenders.
And the still-small U.S. microcredit sector hopes for a boost from the new administration of President Barack Obama.
(Excerpt) Read more at charleston.net ...
I expect Sharia financing to make a rave new trend coming soon.
Backsheesh and that moslem lending practice along with a vig.
The US IS now no different from a 3rd world country.
My tagline has remained unchanged since the election.
OK.
I’ve changed mine from the Terri days.
I miss Terri.
The logical result of exporting our standard of living and importing theirs for the past twenty years. Our jobs out, their cheap microwaves in.
Did I really read that interest rate correctly? 10.9%!!!
Maybe Guido or Bernie Madoff can help this folks....
Pinchy Sulzberger got a 14% convertible note from Carlos Slim to keep the NY Slimes afloat. My guess is Slim will be calling that loan before the end of the year.
This microlending approach is an excellent way to stimulate small-business development — as long as the qualification process is rigorous.
poverty summit TOMORROW.
A whole lot of Super Banks’ VIPs will be meeting tomorrow in London under the guise of “World Poverty Summit”.
Bad bad mojo brewing......
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