Syracuse Office
401 S.Salina St.
Syracuse, New York 13202
Release Date: August 17, 2000
Contact: Donna Speziale
(315) 471-9393 ext 237
SBA Supplies Money for the Smallest of Small Businesses
(First MicroLender Approved in Central New York and the Southern Tier)
Businesses in Central New York and the Southern Tier that need small scale financing can now turn to the Small Business Administration's MicroLoan Program and Alternatives Federal Credit Union for money.
Alternatives Federal Credit Union in Ithaca has been approved as an SBA MicroLender. It becomes the first credit union MicroLender in SBA's 34 county Syracuse District.
SBA MicroLender status will allow Alternatives Federal Credit Union to make MicroLoans in Tompkins, Tioga, Chemung, Cortland, Broome and Schuyler counties. They can also provide technical assistance.
Alternatives is a community development financial institution that combines traditional credit union services with innovative community development programs for the underserved. Alternatives has been serving the small business community with financial services and Community Enterprise Opportunities (CEO), a program that provides entrepreneurial education, business counseling and support services. The SBA MicroLoan Program will allow more small businesses to get the credit they need to start or boost their business.
Alternatives has received a loan from SBA for $750,000. The money is used to set up a revolving loan fund for microenterprises.
"Today, small businesses very often get started with small amounts of money. The SBA has identified a lack of affordable credit in smaller amounts. SBA's MicroLoan Program was developed to fill that void," said Bernard J. Paprocki, SBA Syracuse district director.
"We feel credit unions are an excellent vehicle for delivering the MicroLoan program. Our goal is to help businesses build a track record so that traditional financing can eventually be obtained," Paprocki added.
MicroLoans are especially good news for women. Over 50% of all MicroLoans nationwide are made to women. One of SBA's goals is to double the number of MicroLenders in order to get small amounts of money to traditionally underserved markets such as women and minorities.
The first two MicroLoans approved at Alternatives were to women in Tompkins County.
With two MicroLoans totaling $13,000, Mary Lou McManus opened her own beauty salon called "Talking Heads" in Ithaca.
With a $19,000 MicroLoan, Cody Cook was able to become the sole proprietor of a beauty salon called "Perceptions", also located in Ithaca.
MicroLoans are available in amounts that range from $100 to a maximum of $25,000. The average loan size is $10,000.
"The partnership with SBA allows Alternatives to get closer to our market. MicroLoans provide a viable option to high interest credit card financing for the small dollar needs of new or maturing microenterprises," said JohnHalleron, Director of Business Lending at Alternatives.
MicroLoan funds may be used for working capital or to purchase inventory, supplies, furniture, fixtures, machinery and/or equipment. These loan funds may not be used to purchase real estate, or with limited exceptions, to refinance existing debt. The total project cost cannot exceed $75,000.
Depending on the earnings of the business, the loan maturity may be as long as six years. Interest rates vary depending on the loan amount.
The structure of the business whether a proprietorship, partnership or corporation, is not a determining factor. Virtually all types of businesses are eligible. For MicroLoans however, they must be for-profit and meet SBA size standards.
Please feel free to contact the MicroLoan recipients: Mary Louise McManus, "Talking Heads," 215 Dryden Rd. Ithaca (607)277-2778 and Cody Cook, "Perceptions," 407A Old Taughannock Blvd. Ithaca (607)273-0472.
