ASSETS Lancaster program offers small loans, credit repairs and business advice.

LNP shares information about our new microloan program. View the original post, with images, here.

A new microloan program in Lancaster has given some entrepreneurs money to buy new tools, launch websites or promote their ventures.

But the loans of $1,200 or $3,600 through ASSETS Lancaster are giving the eight business people something equally as valuable: a chance to pay them back.

For Jeffrey Shirk, a craftsman who specializes in restoring historic windows, the $1,200 loan itself wasn’t that significant since it doesn’t even cover a month’s rent on his Lancaster shop.

But having eschewed credit cards all his life, the 40-year-old Shirk needs some help building a stronger credit history to aid his 12-year-old business.

Shirk said he also appreciates the business advice he’s getting.

“What’s simple for me is to do the work and get paid. What’s hard for me is that I’m not a secretary and a bookkeeper,” he said.

ASSETS made the loans in March through the PRECAPS program of FINANTA, a Philadelphia-based microlender. The $12,000 lent out comes along with advice on repairing credit and building up small businesses.

“This program is bridging the gap for early-stage entrepreneurs in a way that doesn’t exist anywhere else,” said Jonathan Coleman, program director for ASSETS.

Coleman said ASSETS, which assists entrepreneurs from underserved populations, is trying to learn from FINANTA before launching lending circles on its own.

“We assume — we hope — that there will be an interest,” he said.

Modeled after successful international microloan programs, the ASSETS initiative offers uniquely small loans while giving participants a real stake in each other’s success.

In fact, any missed loan repayments are covered by a group escrow account, to which everyone contributed the equivalent of one month’s payment.

The loans come with a 9-percent interest rate and a one-year repayment period.

But like Shirk, Lindsey Gruber said the $1,200 she got will be more valuable as a good mark on her credit once she pays it all back.

For a program that requires entrepreneurs to actually be running their businesses, Gruber’s tax preparation business is the youngest, having begun in January. She has had about 15 clients so far in the sideline business.

While the loan is secondary, Gruber does have plans for the money: marketing materials and a website.

“I’m looking forward to seeing how things go and I’m excited to be part of this,” Gruber said.

Loan recipients are required to attend monthly meetings where, in addition to business advice, they get group support and some friendly, new contacts.

James McFarlane, who got $1,200 for his electrician business, said the group meetings help him see that “the troubles you’re having is not because you’re dumb or stupid, it’s just where you’re at for a beginning business.”

McFarlane used part of his money to buy some new tools for Bear Service, the one-man electrician business he started in Sept. 2012.

The 32-year-old McFarlane called the ASSETS loan “a stepping stone” that could make it easier to get a bigger loan eventually and maybe even hire an assistant.

“I’m at a point where simply from a business point of view, I’m losing out because I don’t have the cash reserve to hire somebody and do some marketing,” McFarlane said.

The ASSETS loans were disbursed March 14 and everyone successfully made their first repayment in early April.

Tony Russell, the only participant to get a $3,600 loan, is using the money to buy a wood splitter so he can augment his one-man landscaping business, Russell’s Lawn Care and Home Services, by selling firewood over the winter.

The 37-year-old Russell said he hopes the firewood business, which grew out of a partnership with a tree company, can help him stay busy over the slow winter months.

“As with a lot of small business owners, having little capital is very difficult to work with. As well as very stressful. Having a road map and a gameplan to allow new doors to open in the future is very exciting,” Russell wrote in an e-mail.

Another loan recipient, Michael Tull, 44 years old, is using $1,200 to get more clothing inventory for his UgLY 1 clothing line, which he launched in 2009 and sells online.

Tull said he wants to get beyond the inspiration for his clothes — that there is beauty in ugly — to a better bottom line for the business.

“For my brand to be bigger and more powerful, I have to have a profit,” said Tull, who also has three part-time jobs.

Tull has worked with ASSETS before, including a stint as a board member.

Also lending some business acumen to the group is Gerald Simmons, who got a $1,200 loan for promotional supplies for a consulting business.

Simmons, who is in his 60s, is a pastor in Lancaster at Faith Tabernacle Church and works as a counselor at CareerLink. In addition, he is on the board of the City Revitalization and Improvement Zone, a state program that could bring $100 million of new development to the city.

Simmons said involvement with large projects has made him see the importance of small ones.

“The small business is the engine of America, and as small businesses go, so goes the nation, and I just don’t think there are enough small businesses in the city to engender people’s own well being,” he said.

The loan group’s other two members, who did not respond to interview requests, have a beauty salon and a plumbing businesses.

Coleman, who leads the group’s monthly meetings, says the program is giving common cause to people with different backgrounds and expertise.

“There is now this group of eight people that have this really vested interest in each other,” Coleman said. “They’re not on an island anymore.”

Have a great socially-conscious business idea? Make your pitch.

LNP details some of the ideas created at one of our idea incubator sessions kicking off this year’s Great Social Enterprise Pitch. To view the post in it’s original format, click here.

Heidi Shirk’s idea is a youth hostel in the city called the Lemon Drop Inn.

Christina Stiehl thinks urban farming and green roofs can be merged into a money-making enterprise.

Meanwhile, Jim Wegert wants to boost student achievement with a line of motivational posters, books and DVDs he calls ubStrong.

The three are among several dozen would-be socially minded entrepreneurs who plan to compete for the $8,000 up for grabs in an initiative called “the Great Social Enterprise Pitch.”

For Lancaster, it’s a first-of-its-kind competition sponsored by the Lancaster County Community Foundation and Assets Lancaster.

The organizations came up with “the pitch” to promote social enterprises, the term for sustainable, revenue-generating businesses that harness the power of the marketplace to advance the common good.

Examples are Akron-based Ten Thousand Villages, a fair-trade retailer, and Goodwill Industries, a nonprofit that helps the disabled acquire work skills.

This week, nearly 70 people attended one of two “idea incubator” sessions kicking off “the pitch.” Staff made presentations about the concept of social enterprise and how the competition will work. It concludes Aug. 8 with the top three to five participants pitching their ideas to a panel of judges.

Applications must be submitted by Monday, April 14. Staff will then select the 10 most promising applicants to attend a series of eight workshops to explore the feasibility of their ideas and develop business plans.

Through the month of July, the public can donate online to the enterprises they like best. The top recipients will then pitch their proposals to the judges.

First prize is $5,000, second prize is $2,000 and third prize is $1,000. In addition, the winners will receive pro-bono services from marketing, legal, financial and administrative firms.

The “pitch” is seeking sponsors willing to offer the winners pro-bono assistance.

“The goal of the pitch is to develop social enterprise ideas locally while raising awareness” of social enterprise “as a viable option in addressing pressing social and environmental issues in our community,” said Jessica King, Assets executive director.

King said the ideal enterprise will compete successfully in the marketplace, offering products or services that produce revenues streams capable of covering costs.

“If we have great engagement and people are excited about (the pitch), we have every intent of figuring out how to do it again,” said Melody Keim, vice president of programs at the Community Foundation.

Shirk said her 15-bed youth hostel on Lemon Street will offer affordable lodging for a range of visitors, including budget-minded travelers and groups doing service projects. She said she will run the enterprise with socially beneficial business practices, such as offering livable wages and installing rain barrels and other “green” infrastructure.

Meanwhile, Stiehl said her urban farming concept would benefit low-income city residents, providing them a way to grow their own produce.

“I’ve been sitting on this idea for probably three years now,” said Stiehl, an officer manager and college student. “I went online and signed up right away (for the pitch.) This makes me believe that my dreams are possible.”

Social Enterprise from the eyes of our Program Director Jonathan Coleman

Jonathan Coleman

The first 5 years of my career were spent working for an international non-profit, operating very much from the traditional charity mindset.  The organization raised funds from wealthy Americans to run child-focused programs, such as schools and orphanages, in poor countries around the world.  The needs we met were stark, and the work was rewarding.  As I gained more experience in this field, however, I began to realize the limitations of the work we were doing.  We were addressing symptoms of enormous problems, rather than the causes of those problems.  Also, the reality was that there simply was not enough donor money to build and run schools for every uneducated child in the world.  Assessing these frustrations led me to ask some serious questions.  Is there another way beyond the age-old charity model for addressing issues of poverty and injustice? How can I be a part of promoting solutions which had the ability to scale at such a level that the structures of oppression and poverty would be shaken at their core?  Finally, is there a way to grow impact without spending all my time seeking more donor dollars?

The search for the answers to these questions led me to Social Enterprise.  Lack of economic opportunity is a primary cause of many social issues, therefore, market-based solutions with a clear focus on specific societal problems work from the inside-out in positively impacting these issues.  Additionally, while charity dollars are always limited, consumer dollars have create infinite possibilities for growth and scale.

This is not to say that the charity-model is unnecessary, at ASSETS Lancaster, we use donor dollars to subsidize a majority of our educational and lending programs because they would otherwise be too expensive for our target market to access.  However, we do strongly believe in creating space for Social Enterprise as a “3rd way” to operate, outside of traditional for-profit/non-profit structures.  Our involvement in social enterprise is meant to catalyze excitement and innovation around business ideas which help address some of the stark social and economic problems present in our community.  That makes me very excited indeed.

Jonathan Coleman

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