Entrep Training/Tec Assistance

[VHSE76A at prodigy.com (M]

Sorry, but the body of your note is entirely unreadable! All encoded
in some Martian language. I prefer to read in English.

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[Tracy_Dranginis at muccma]

Yes, I really want to read it English. I have developed and been
testing a self-employemnt training prog for about 3 years now in rural
Missouri. I try to stay up to date on what other folks are doing, but
am always looking for new resources.

So, please re-post.

Thanks,
Tracy Dranginis


______________________________ Reply Separator _________________________________
Subject: Entrep Training/Tec Assistance
Author: COMMUNITYDEVELOPMENTBANKING-L@cornell.edu at MU-Internet
Date: 8/6/96 1:08 PM


Sorry, but the body of your note is entirely unreadable! All encoded
in some Martian language. I prefer to read in English.


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[DRizzo2327 at aol.com]

For those on the list with experience....how does one convince "bankers" who
are running community development loan pools that most of the targeted groups
do not have collateral, money for up-front fees, points, and other dollars
that they want to charge "low income" folks for loans?

Riz

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[jfriedman at ised.org (Ja]

>
Does Mr. Brooks mean that a microenterprise organization must have its
"own" loan funds "available as the carrot of inducing students to forge
forward with their businessplan. Most conventional lenders will not
consider funds for start-upventures, CRA or otherwise." - If yes, then he
is unfamilar with many successful organization (not in the "experimental
phase") that are quite successful without their own loan funds.

The Institute for Social and Economic Development (ISED) has an eight year
track record of starting businesses (over 600 across the state of Iowa)
without its own loan funds. We started over 125 businesss last year
without the promise of dollars at the end. Our carrot is expertise and
access - we know where to get loan funds and how to get them.. In Iowa, we
have been very successful in getting banks to participate in small loans by
packaging their dollars with state low-interest loan programs, SBA and our
own loan guarantee fund. Banks in Iowa want a shot at the deal - yes, bad
credit can be a problem, but our goal is for the bank to take a least a
piece ($5K) of the action and cover their butts as much as possible. Also,
most if not all of our bank loans are for start-ups.

This isn't to say that Iowa's banks are pro-small business; they are
probably not. They have been burned by the agriculture crisis here a few
years back and are very conservative. On the other hand, CRA regs are
pushing them to explore unchartered territory and would love some guidance
from microenterprise organizations on how to make their dollars work in the
community.

Having your own loan dollars is a tremendous asset - but it also can be a
curse. The fundamental question is, what is your purpose? Are you a
lender of last resort or a training and technical assistance provider?
Very few are good at both. There is always the pressure to get the dollars
out- many clients ask, "when do I get the money?" However, having all
your dollars devoted to training and TA means that you can focus in on
helping clients develop solid bankable business plans.

Of course, if I mis-read Mr. Brooks' comments, my apologies.

----------------------------------------------------------------------------
-
Institute for Social and Economic Development (ISED)
1901 Broadway, Suite 313, Iowa City, Iowa 52240
Voice: 319-338-2331 Fax: 319-338-5824

Jason J. Friedman, Director of Economic Development
Email: jfriedman@ised.org

ISED: Helping Iowa Grow, One Small Business at a Time



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