Microloans helping Bronx entrepreneurs and small business owners take it to the max

His credit score isn't very good, he's trying to refinance his home and he's looking for a full-time job. But thanks to a microloan, Freddy Blanco just built a new website for his firm, JusDesign.

About six years ago, the Bronx graphic artist found out about Project Enterprise - a nonprofit that provides modest loans and business training to entrepreneurs and small business owners.

"A lot of people have lost their home, lost their job, so their credit has suffered in so many different ways," said Blanco, who has received $5,500 in loans. "Going through a microloan gives you the helping hand to get back on your feet and hopefully...get your credit going again."

Microloans are small amounts of money loaned to high-risk clients usually shunned by larger banks. Since the 2008 economic crisis, they’ve become increasingly popular in the Bronx.

But lenders and their clients say that not enough Bronxites know about these resources.

Project Enterprise has made 825 loans to business owners since it was founded in 1997. The non-profit - funded by a mix of private and corporate donations, and government grants -usually lends $500 to $12,000 with a 12 percent interest rate. But borrowers only pay interest on the loan amount they have in hand.

"Sometimes entrepreneurs get overlooked, and those are the folks we want to give a voice to," said Catherine Barnett, director of Project Enterprise.

The microloans from SoBRO's (South Bronx Overall Economic Development Corporation) Credit Inc.'s program help small business owners with storefronts operating for at least a year.

The financial crisis dealt a double whammy to "mom and pop" stores trying to get traditional bank loans, noted Garrett Lucien, who runs the Credit Inc. program.

Large banks toughened lending standards, and business owners got behind on their bills.

So in 2010, Lucien revamped Credit Inc. The program began to make $1,000 to $20,000 loans with a 6-to-8 percent interest rate, on average, to Bronx businesses.

Juan Perez, who owns Bronx Auto Care, near the Cross Bronx Expressway, got a $15,000 loan from SoBRO that he put toward a new painting booth.

"I don't like borrowing money from banks because I'm always turned down," Perez said. "So I was overwhelmed when SoBro said, 'Yes, it's gonna come through.' "

Credit Inc. put Perez through a financial literacy class.

"It's my hope that this is the only time I'm going to ask them for help," said Perez.

NY Daily News

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