SF plan announces first microloan

July 14, 2009 7:17:34 PM PDT
San Francisco came up with a local economic stimulus plan in February to help small businesses. Now the city announced the program's first microloan.

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For years, Claudia Ricarte worked for someone else, but now she's the boss. She owns a beauty supply shop and salon in San Francisco's Noe Valley neighborhood called 'Bubbles and Shampoo.'

"I'm very excited," said Ricarte.

Ricarte is the first small business owner to receive a microloan, $25,000 as part of the city's local economic stimulus plan.

This is where the money is going.

"I needed to purchase some supplies for me and I want to create jobs for people," said Ricarte.

The loans range from $5,000 to $25,000 with interest rates from four to six percent.

A few established companies could be eligible for $50,000. All the loans are for five years. The program uses $800,000 in HUD money the city was granted.

"You've got to retain a job, create a job and meet workforce development requirements under a certain threshold, so the job has to pay a little under $60,000," explained San Francisco Mayor Gavin Newsom on how to get a loan.

Alison Bailey Vercruyss meets the criteria. Her organic granola company, 18 Rabbits, will be the second to receive a microloan. She says a conventional bank had turned her down.

"They said the credit had tightened and they couldn't do anything for me right now, so the city came in handy," said Bailey Vercruyss.

The borrowers are required to complete a business education plan through Working Solutions, the non-profit lender that administers the city program.

"Before they jump in and invest the money and take out loans, we really like to see that they have thought through their business like who is their competition an what is their marketing strategy," said Emily Gasner from Working Solutions.

Right now just two loans have been awarded, others are in the pipeline and there's money for hundreds more.

Related Link:

  • www.tmcworkingsolutions.org

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