Micro-loans is the smallest, poorest to help emerging growth companies
By Jay MacDonald Bankrate.com
Rolando Espinoza had a traffic jam.
Residential heating and air conditioning business he inherited from his father, a commercial account was required to survive. Many of them are available in nearby Little Village in Chicago there had, it is not paying them until the job is completed, it will need a deposit of cash to invest in materials and labor - Roland cash if you have did not.
Espinosa is unwilling to install it in his house as collateral appealed to the local bank.
"If something happened to me, nothing is left of my family," he says. "It's one of the pitfalls of being self-employed."
Then he heard Accion International , a leader in the growing microfinance industry. He applied to the Accion Chicago, micro-loans are approved fast million dollars. That he was able to break into a commercial contract work.
"I have always been concerned about the constant worry," he recalls. See Also money transfer companies in usa . "Now, when I get a final check, I do not owe everybody in town."
Micro-enterprises coming to America
Micro creditor needs to touch the small business loans that banks and other financial institutions, for very small businesses are often overlooked source of capital.
According to the Association for Enterprise Opportunity, an organization of approximately 450 microseconds enterprise, trade organization representing the micro-loan is made to the company less than five employees or 25,000 dollars. The industry average is $ 12,000 micro-loans.
The concept is, in Eastern Europe and Latin America, poor Third World countries, primarily in Bangladesh beginning, spread rapidly where it was needed most. See Also money 600 . UN movement, we believe an important tool for fighting global poverty. Washington, DC, in 1997 Microcredit Summit, launched a campaign meeting for nine years to reach 100 million by the world's poorest families with micro-enterprise training and funding. See Also money quick .
Growing number of immigrants in the United States and self-employment opportunities for women's movement began in the 1970s and 1960s, the mainland has created a market for micro-enterprise programs in the past decade the United States. Check out also massachusetts pay day loans . Axion with such organizations such as Foundation for International Community Assistance (FINCA), which faces a unique challenge for any translator who worked in the United States in the context of the Third World.
Such as African Americans and Hispanics, according to a survey by Axion 2.4 million, the estimated 13.1 million micro-entrepreneurs in this country, there. Of these, the estimated 10.8 million, or 82 percent, it received a business loan from a bank is not. Many of them are poor or even non-existent credit, lack of collateral, youth, small size of the loan because they need or race, does not account for bank loans. Check out also my quick cash online .
Livingston Parsons III, vice president of lending operations, according to Axion for "In many cases, we may be the only way you can use to loan money." "Their only other option is to borrow from friends and family, higher rates and fees charged on the day of the interest rates upwards of 5 to 10%, or maybe loan sharks and credit card."
It is greater than money.
Edwards bill to help low-moderate income families to succeed, according to executive director of the Association for Enterprise Opportunity, is the bottom line of micro-enterprise industry.
600 to 700 micro lenders most religious in the industry, along with private donations for charitable organizations, including women and minorities, federal, state and local subsidies, is a non-profit community development organizations that rely heavily on.
"Our study is $ 1 of public funds for micro-enterprises shows that the return is $ 4," says Edwards. "The most important thing to do we have a recognition of the equity loan. It should be possible. However, found that members of our education, training, technical skills and enterprise operations equally important is the assistance. If you measure the bottom line is qualitatively, the impact is solid. "
In the United States holds the instability of the financial world where small businesses. See Also motorcycle title loans woodbridge va . They received considerable assistance from the federal government, Small Business Administration is their biggest source of funding. They, in turn, either avoiding or paperwork SBA's legendary subject of loans SBA's traditional recipe of financing micro people who can not can not wait too long for the money only.
"I can not tell people I was going to talk about the level of dissatisfaction with how the SBA at the end of a great many," says Mr. Parsons. "You need money and are now talking about a process that four to six months. Our goal is to make loans to around 14 days."
The unstable relationship with the bank as well. Most banks do not want to write any portion of micro-loans, they are back a little, about the same cost to handle a large loan. However, banks in their products and services offered by the lender from micro-rank, the more customers want to see. As a result, banks as a way to meet their obligations under the Community Reinvestment Act in the future of some customers, in many cases, below market interest rates or the lender to sell the gold micro- plays an important role in small business, and perhaps better seed.
"I have never met anywhere bankers felt that there was no need," says Edwards. Check out also is lien holder a loss payee. "Many of them are doing more than they can not express regret. See Also moneybox 24 7 ."
(One bright spot for bank consolidation:. Bank has fired organizations find their way more and more small businesses are welcome to their greater familiarity with the loan).
National organization such as keeping all the good will flowing to the right coalition of community development financial institutions and the National Association of Social Capital . Both function as a clearinghouse of information for small business advice on best practices for the industry to where to borrow money from a directory of member loans. Check out also mini loan uk.
Loan at a time
Micro-enterprise nascent industry is facing a challenge to meet the needs of micro entrepreneurs in the USA. In the Third World, $ 100 can dream, where it does not persist through TESH John concert. Have higher labor costs, office space is expensive, other sources of capital (plastics in particular) richer - and Barrios in La Paz, and Rio, unlike entrepreneurs in low-income American is distributed on the continent and.
In order to help reduce costs and take advantage of marketing available for little money, micro-lenders have been some heavy online. Count Me In 84 months to 12 months to provide an online micro loans like fixed rate loan is a prime one for $ 500 to $ 10,000 and above two conditions. Loans are intended for women-owned startups.
Others, such as Axion such, applied together in order to guarantee each other's part of the loan the borrower 3-5, you agree, by writing a group loan, cut the processing time and paper. Parsons estimates that about 20 percent of loans in loan group in the U. Check out also money till payday easy approval .S. axion.
Edwards, micro-enterprise industry says it has experienced growing pains now, you may double the size during the next decade.
"This is a very recent phenomenon," he says. "To the 11 years that this is only our own organization there are many people who do not have much experience. This whole field is definitely 10-15 years. Is. And financing, the most difficult first. It is a very steep learning curve, please see my progress. "
Jay MacDonald is a contributing editor based in Florida and
- Posted: 13 October 2000