Women’s nonprofit offering microloans

For women in the Charlottesville area who want to build their careers, the FOCUS Women’s Res-ource Center might be able to help.

FOCUS, a nonprofit offering career counseling, mental health counseling and teen services, recently added a microloan program through which women can borrow up to $1,500 to start a business, get career training or buy the tools of their trade.

Borrowers have two years to pay back the loan at a 4 percent interest rate, lower than the national prime rate of 5 percent. Only well-established businesses or people with excellent credit history could get such a low rate from a bank, University of Virginia economics professor Lee Coppock said.

Microlending was developed in poor countries for people without the savings or income to start a business on their own. Coppock said microlending could be applied in low-income areas in the United States, but it has not received the attention here that it has abroad.

“Microfinance in the U.S. is probably not looked at as critical because … we have so many lending institutions where you can get a loan,” Coppock said. “The banking system is well established.”

The FOCUS microloan program is funded by the Piedmont Housing Alliance and the Alliance for Interfaith Ministries. Borrowers can use their loans for career-related expenses. If the program is successful, the repayments and interest will fund more loans.

Sandi Burke, a career counselor at FOCUS, said the loan application process is “clear, not complex and not too difficult.” Applicants are asked to give a detailed explanation of their goals and how they intend to use the loan. The application calls for background information including employment, marital status and other debts.

A committee reviews the applications and interviews the applicants.

“Our bottom line is that [there] is truly a need … [and] that there’s a specific goal,” said Robin Eliason, director of counseling and career services and a committee member.

Once an applicant is approved, she will be given four to six hours of career training at the FOCUS office or a partner organization such as a local bank. FOCUS wants to ensure that borrowers have all the preparation they need to use their loans wisely and pay them off.

Ivy Clark, the program’s only applicant so far, wants to build her Mary Kay cosmetics business by investing in products and supplies.

Before selling Mary Kay, Clark worked part time as a waitress. Now her credit history isn’t strong enough to apply for a conventional business loan. “I probably would not have been glanced at at the bank,” she said.

Although business has been slow lately, Clark believes a microloan could turn things around for her. Clark said applying for the loan has inspired her to pursue another dream — starting a Charlottesville community center where kids could explore art, music and dance. She has already met with investors and charitable organizations that have expressed interest in the idea.

“This last week has accelerated an opportunity that would go above and beyond my personal Mary Kay business,” Clark said. “I think it would not have begun if I had not had … the hope that FOCUS provided.”

For more information on the FOCUS microlending program, visit http://www.avenue.org/focus. Applications are available on request.