March 4, 2010
Mayor Thomas M. Menino of Boston, as part of an effort to spur business growth, will announce today a partnership with a nonprofit group in Charlestown that offers ``microloans'' of $500 to $50,000 to small companies unable to borrow from large banks.
The nonprofit, ACCION USA, has made millions in bite-size loans over the past decade in Greater Boston, helping restaurants expand and corner shops stock up on supplies for a busy season. But many entrepreneurs who are having difficulty obtaining credit from large institutions are unaware of the microloan alternative.
``Most people don't know we exist,'' said Ana Hammock, program director for New England lending for ACCION, which is headquartered in New York. ``We need people like the mayor who have greater visibility who are out in the community speaking to business owners.''
Menino will use his talk today at the annual luncheon of the Boston Municipal Research Bureau to urge banks to refer small-business clients to ACCION, said spokeswoman Dot Joyce.
``The speech is going to focus on the urgency to make changes to set the city up for success in the next decade,'' Joyce said yesterday. ``That includes partnering with new organizations that could move our city forward.''
The annual address to businesses and nonprofit groups has been a forum where the mayor in the past has pitched new ideas, such as building a 100-foot-wide greenway over part of Storrow Drive or making the Jamaicaway and bridges over the Charles River one way during rush hour to ease traffic.
Menino has also used the event as a bully pulpit, decrying cuts in state aid and telling unions he would be forced to lay off 700 workers if they did not accept delays of scheduled raises.
This year, the collaboration with ACCION is one element of a speech urging civic leaders to look at old problems ``with a fresh perspective,'' Joyce said. The ACCION partnership will not include any additional funding from Boston beyond the roughly $25,000 a year it already receives from the city through federal grants, according to the nonprofit group. But a plug from the mayor could be a major boost for an organization with a small staff and virtually no advertising budget.
The company's average loan is roughly $7,000, an amount too low for most banks because large institutions will not profit enough for the loan to be worthwhile, Hammock said. ACCION also targets start-ups, and the organization has seen an increase in people with a specific skill who have been laid off but want to launch their own businesses.
``Again that's an area where banks just aren't willing to commit capital at this time,'' Hammock said. ``It's considered too risky.''
ACCION has offices in Atlanta and Miami. Locally, it has helped, among others, Carlene O'Garrow, who used $4,000 in loans to launch Delectable Desires, a Jamaica Plain bakery that specializes in pastries. Elliot Beale borrowed $15,000 from ACCION to help double the size of his Only One Jamaican Restaurant on Norfolk Street in Dorchester. Beale had been turned down by a bank.
``I am so happy that they did it for me. If it wasn't for ACCION I'd be in the same 700-square-foot restaurant,'' said Beale, who specializes in curried goat, jerk pork and chicken, and ox tail.