ACCION USA, New Brunswick’s Urban Enterprise Zone, Catholic Charities and Unity Square Partnerships are cooperating to extend opportunities for financial stability to aspiring businesspeople in the New Brunswick community.
The initiative gives individuals and businesses that may not qualify for loans through the traditional banking system the chance to obtain the necessary financial support, Mayor Jim Cahill said.
“One of the best ways to combat unemployment and underemployment is to empower our residents to utilize the knowledge and skills to create their own businesses,” he said. “This program will be yet another tool in our city’s arsenal of job creation and putting New Brunswick residents to work.”
With the right support and financial education, a resident with a dream could become the CEO of the next Fortune 500 company, Cahill said Wednesday at the opening ceremony for ACCION’s Unity Square office on Throop Avenue.
“Consider for a moment that in 1885, there were three brothers that had an idea to capitalize on the theory of germs by starting a sterilized bandage company in an empty wallpaper factory with 14 employees,” Cahill said. “That dream from more than a century ago has grown into our city’s greatest small business success story — Johnson & Johnson.”
Still, regardless of size, a business that helps the proprietor earn money to feed and clothe his family and put his children through college is one that can help improve the city, he said.
ACCION, New Brunswick’s nonprofit small business loan provider, is expected to issue a total of $84,000 in loans, with the average loan in the amount of $7,000, Cahill said. Funds from the city’s Urban Enterprise Zone will finance the program and ACCION will assume all liability for monies lent.
The city contributed more than $51,000 to the program for accommodations and operation, Cahill said. If it is successful, he is willing to support the continuance of the project once the initial funds are depleted.
ACCION differs from big banks because it looks beyond a credit score and offers low interest rates to make getting started easier for those interested in starting a business, ACCION Director of Business Development Laine Rolóng said.
Once businesses establish good credit through ACCION, they can work toward pursuing higher goals with traditional banks, she said.
Across the nation, those trying to start a business have met challenges, especially with the state of the economy.
“Prior to the crisis, an estimated 10 million micro-businesses in the United States faced difficulty in obtaining business capital from traditional lending sources,” Rolóng said. “I’m sure New Brunswick’s businesses faced the same problems, particularly in the current economic climate.”
ACCION offers personal loans ranging from $500 to $10,000 and loans for businesses up to $50,000 as well as free financial education services, available both in-person and online in English, Spanish and Portuguese, she said.
“When we started organizing the neighborhood and working with the residents, it became very clear that many of them are aspiring entrepreneurs, and … there are a lot that didn’t know anything at all about the credit situation and how to get loans, start business and even open bank accounts,” said Marlene Sigman, director of asset management for USP, a neighborhood revitalization project involving housing, economic development and social services.
As long as interested businesses make enough to pay back loans, there are no other financial criteria they need in order to get monetary support from ACCION, Rolóng said. Loan consultants will help entrepreneurs manage finances so that they may meet this requirement.
“The population we serve is the population that the banks don’t,” she said.
Many in New Brunswick already display such talents, Program Director for USP Lorena Gaibor said.
“A lot of the women make things in their homes and then sell them on the street. … We want to help to legitimize that,” she said.
Though the program’s organizers intend to achieve many goals, Gaibor brought up one in particular.
“In my mind, if you touch one life, that’s a success,” she said.
Initiative lends stability to aspiring city entrepreneurs
Published: Thursday, February 18, 2010
Updated: Thursday, February 18, 2010
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