By: Clare Trapasso
September 28, 2010
Lenders assisting women, minorities
After the housing bubble burst, Pankaj Malik was in a tough spot.
The East Elmhurst real estate and immigration attorney had been forced to slash staff and was barely able to pay her bills.
So when Malik & Associates renewed a lucrative government contract, Malik, 41, didn't have the funds to expand. Traditional banks refused to consolidate her existing debt or extend a line of credit, she said.
Malik then turned to one of several nonprofit lenders that primarily provide small business loans to women and minorities who have been rejected by banks. Last month, she received enough money from Seedco Financial to hire five employees.
"Not only do we have the money to survive, we have the money to grow," she said.
Malik's struggle has become a common plight for businesses caught in the financial downturn.
"Small businesses need access to loans," said Brian Gurski, director of the Small Business Development Center at LaGuardia Community College. "Microlenders are there to help when the banks can't."
As the credit crunch continues, Gurski has seen a growing interest in microfinance groups, as well as in larger lenders like Seedco. These groups can keep businesses afloat and help entrepreneurs lunch companies, he said.
Organizations like Grameen America, based in Jackson Heights, have sprung up to meet that demand.
Grameen has provided roughly $6 million in loans to about 2,300 women in Queens since 2008, said Chief Executive Officer of Operations Shah Newaz. First-time loans start at $1,500.
Project Enterprise provides larger loans of up to $12,000, said Vice President of Programs Catherine Barnett, whose group has a Jamaica office. More than 95% of the nonprofit's borrowers are minorities, she said.
Another local lender is ACCION USA. About 40 Queens businesses have received money from the group this year, said spokeswoman Laura Kozien.
The nonprofit group provides loans up to $35,000 and also has a program for companies that want to be more ecofriendly, she said.
Then there's Seedco, whose loans range from $50,000 to upward of $250,000 for existing businesses, said Senior Vice President Edwin Hong.
"We're able to take into consideration applications that banks have declined," Hong said.
To reach new clients, Seedco partnered in June with an online firm, Biz2Credit, which matches businesses with lenders. It has helped more than 500 Queens merchants get loans over the past two years, said company founder and President Ramit Arora.
"A lot of small businesses have suffered very badly during this whole credit crunch," he said. But "there is still money out there."