The Rising Tide Community Loan Fund, a small-business lending arm of the CACLV, is the Lehigh Valley's only federally-certified microlender. It was created to extend credit to entrepreneurs located in communities where resources and opportunities for growth are limited. Funds can be used for equipment, marketing costs, inventory, working capital and lease-hold improvements. Terms are flexible.Since its creation, this Fund has made 69 microloans totaling over $1,285,000. This year, it has made ten new loans totaling $240,900 in communities from Bangor to Walnutport, Easton to Allentown, creating 23 jobs and retaining 14 others.
The Birdlady of Easton, located at 1704 Washington Boulevard in Wilson, received a $9,900 loan for advertising, inventory and working capital. Owned by Melody Seip, the Birdlady of Easton, carries a wide variety of exotic birds, such as macaws, cockatoos and African Greys, along with all needed accessories.
Whether looking for lunch or a night on the town, try stopping by The Firehouse, located in the heart of Bethlehem’s Southside at 217 Broadway. Owner Adam Gottwald borrowed $35,000 to help transform the former Lehigh No. 1 Engine House, built in 1885, into one of Bethlehem's unusual new eateries.
Looking to place your company logo on a polo shirt or golf ball? If so, stop by IdentiTees for your printing and embroidery needs. Owned by Paul Zingone, IdentiTees is located within the Lehigh Valley Digital Copy Center at 1251 Airport Road in Allentown. With the $15,000 borrowed, IdentiTees was able to expand their services.
PKE Group, owned by Patrick Paparelli, received a $35,000 loan. With loan proceeds, Paparelli, who is based in Hellertown, purchased equipment and inventory for a vending business that features natural and organic snacks.
R.T. Salon is a new salon that will be opening at 403 North Best Avenue (Route 145) in Walnutport. Owners Rica Snyder and Glen Cook borrowed $15,000 for equipment, inventory and building improvements.
With over 30 years of experience, Elsa Vazquez has brought Bet-El Counseling Services to the Southside of Bethlehem. With $25,000 borrowed to support operations and with an extensively trained and bilingual staff, Bet-El Counseling will fill an unmet need to reach the region’s growing Latino population.
Diamonds may be forever, but Werkheiser Jewelers, noticed a growing trend amongst his customers while operating his Saucon Valley store for the past 17 years - those who typically purchase fine jewelry are also considering quality handbags and scarves. With $35,000 borrowed from the Fund, a soon-to-be opened second store to be located at 3452 Easton Avenue in Bethlehem Township, will carry both the fine jewelry and those handbags.
James and Theresa Edmonds, owners of a roasted nut and Italian ice franchises operating out of Easton as Paradyse Investments, borrowed $20,000 to purchase a second cart and additional inventory. This allows them to bring freshly roasted nuts and refreshing Italian ice to an event near you.
Comprehensive Chiropractic, located at 2200 West Hamilton Boulevard, Suite 215, in Allentown, received a loan in the amount of $16,000. Owned by Heather Strencosky, Comprehensive Chiropractic services include family chiropractic care, massage therapy and weight loss counseling.
Art & Music Emporium owners Joshua and Becky Long received a $35,000 loan to continue the growth of this Bangor business. From band instruments, which can be rented or purchased, to quality art supplies, Art & Music Emporium is an expression of the Longs’ love for the arts.
17 comments:
The Werkheiser renovation of the old stone house on the corner of Easton Avenue and Fifth St. is wonderful. I admire the work they've done every time I pass it.
Reading in the papers (and on this blog) how Bethlehem Twp got beat up a few years ago for cutting funding to CACLV I was surprised to read here that they loaned well over twice that amount to help a jeweler move into an upscale facility rather than spend it toward the less fortunate in the valley. Will the homeless be buying a diamond ring and a handbag? Will they be able to find a job at the jewelers? I guess I always thought of Rising Tide as helping the working poor with an entrepreneurial spirit.
Excellent points. I can't answer them.
maybe for once they wanted a chance of being paid back?
I agree Bernie, lighthouse has some good points, but to play Devil's Advocate I have seem many young business start through this fund. CACLV assists in such supportive way that if the business owner is truly motivated..it works!! For those out there that can't access normal Business funding(and there are many it is a lifeline of hope. Have we all become so jaded that we will gripe just to gripe. Do your homework folks!!!!
Bernie,
Very interesting. Please tell us how you acessed this data. Did CACLV gladly give it to you or was there a fight? Also, what would be equally interesting is to do a follow-up on how many of these business are still in operation, one year, two years. etc.
Where is Werkheiser opening?
Please give us a landmark.
Wasn't it this past year's Bethlehem Township budget that denied homeless funding?
Bernie,
Very well written blog.
CACLV has decided to include me on its media list and I was impressed by what it does for small, struggling businesses. I was unaware of that and thought my readers should know about it.
The suggestion that I look into different businesses funded to see how effective these loans have been is a good one and i will follow up.
I know some of these places. he Bird Ladt has been in Easton for years, so this seems like a good bet.
I get sick of hearing about millions to this crony or that big business in outright grants. Here we have real people, aome with unusual businesses, getting loans. It is these small businesses that make America stand out.
"Very well written blog."
Most of it comes from CACLV and is simply re-arranged and edited. I can't really take credit for it.
The RTCLF is a loan pool - the seed money came from investors and low-interest loans, and is replenished by the repayment of the microloans. Although they surely experience losses like every other bank does, they are not "giving" money to businesses. The loans are repaid over a fixed period, at a fixed interest rate, collateralized, and are repaid whether the business stays open or not.
I know she doesn't involve herself in the blogosphere much lately, but bloggette "look out lehigh valley" used to work for the rising tide. She always spoke eloquently about microfinance when we got into the topic over drinks.
"are repaid whether the business stays open or not. "
If a business closes its doors, how does Rising Tide collect the loan debt?
A few Rising Tide sponsored businesses have closed after only a very short time in existence.
Rising Tide Loan Rate of Return:
Here's an easy way to find out how many loan-financed businesses are still in operation.
Get a list from the last 5 years from CACLV, post it here and ask readers to inform you if businesses are still open.
The borrowers continue to repay the debt I assume, out of other income, regardless of whether they remain in business. Sometimes the sale of the business equipment or fixtures covers the remaining debt on a business that closes, and sometimes its just a continuing payment after the business owner moves on to other employment. At least that is how it works at a commercial bank. Probably Rising Tide is more flexible about repayment since they have a community redevelopment mission, but I'm sure that they try to work with borrowers to get their principal amounts repaid.
As for how many businesses remain open, I can't speculate on Rising Tide's success rate, but I know from commercial lending that statistically 50% of start-up businesses do not stay open more than 1 year, and almost 90% close within the first five years. Unless Rising Tide has some magic formula, I suspect their numbers are much the same as everyone else's. However, I suspect that their stats could be even worse, since they are a "lender of last resort" and the businesses that seek loans from them are typically very high-risk.
Maybe CACLV can feed some of those exotic birds to the hungry homeless who are window shopping expensive jewelry. Tastes like chicken.
I'm pretty much of a techno-idiot and new to this blog thing, although I appreciate the power of the communication tool. I hope it's kosher to respond to several of the entries in one post. If so, here goes:
We raise funds from suburban municipalities, including Bethlehem Township, and pass those funds along to all of the region's shelters. So readers should know that the Bethlehem Township cut was not directed at CACLV but at all 9 of the shelters.
Second, non-profits get funding from a wide range of sources. Typically, funding sources are not available for any and all uses. Therefore, it is not accurate to think that the source that supports services for homeless people would allow its funding to be used for microloans.
Next, our microlending unit makes loans to small business to create economic opportunities as an anti-poverty strategy. We are much more into opportunities than we are hand-outs. Our microlending is a self-sufficiency tool and our primary targets are lower-income and/or minority borrowers and/or businesses located in distressed neighborhoods.
Next, as Bernie said, we offered this info to him and all media. We are an open book. Any information that isn't protected by confidentiality rights we are happy to share.
As for our success rate, the delinquencies are below 10%,and many months they are as low as 3 or 4%. Yes, most failed businesses continue to pay, partly out of honor, partly because we have collateral.
And, of course we have failures. If you want specifics, I'll have to do the research, but I can guarantee it's far less than the failure rate for small businesses in general, which is around 80%. Of all the loans we have done, totaling over $1.3 million, only four have been written off, the sum of which isn't even $30,000
Hope that answers everyone's questions/concerns. If not, feel free to contact me at 610-691-5620.
Alan, Thank you for your comments. They are very much appreciated abd help dispel misimpressions before they arise.
Keep up the good work!
Post a Comment