The concept of the Near Westside Initiative’s microloan program is about as simple as it gets: make it easy for neighborhood businesses to find space, funding, direction — whatever they need — to help them make an investment into the neighborhood. And everyone wins.
“I’m all about getting the businesses the resources they need,” said Michael Short, deputy director of the Near Westside Initiative. “If I help you, and you move into the neighborhood and your business expands and you’ve renovated a building, then we’ve all succeeded, together.”
The microloan program is an innovative, comprehensive system that puts entrepreneurs looking to start or expand a business on the Near West Side on a fast track to realizing their goal.
And this month the NWSI announced that roughly 30 businesses are currently seeking eligibility, with the first loan, of $12,000, awarded to a caf project at the expanding Red House Arts Center/SubCat Studios complex.
Nuts and bolts
The microloan program has roots in a summer internship Short had in 2009, for which he knocked on the doors of all 140 West Side businesses to conduct a survey.
The results shocked him: in the midst of an economic crisis, 35 percent of West Side businesses wanted to expand, but they needed help.
Short said business owners felt isolated, they felt alone, they felt like there was no one there to help them so they just focused on themselves.
So the first step was to organize a business association and create a community for entrepreneurs; the Near Westside Initiative Business Association held its first meeting last July.
The next step: securing a $25,000 grant through Community Foundation, seed money for the NWSI to create a loan loss reserve with Cooperative Federal Credit Union, which opened up $100,000 for microlending.
The move quadrupled available funds and created a revolving microlending program. As loans are paid back, the money recycles back into the lending pool so microloans will be continuously available. If borrowers default on their loans, the $25,000 loan loss reserve is there as a cushion to keep the bank paid.
Short said the NWSI program puts entrepreneurs through a rigorous application process, including completion of the Small Business Development Program and participation in the NWSI Business Association, but it provides a support network in doing so, which will keep it sustainable.
“It’s important to remember that our loans, in most cases, would not have been made by traditional loan programs and financial institutions,” he wrote in a follow-up email. “Some have bad credit. Some have no credit. I work to customize a program that’s individual to each business and/or entrepreneur.”
Montage makes it happen
Like most developments on the Near West Side, the opening of Montage Caf — the first business to be awarded a microloan through the Near Westside Initiative’s microlending program — isn’t a part of something much bigger than it appears.
Christian Van Luven, who owns Roji Tea Lounge with his wife, Tomomi Yoshida, said the concept for the caf began taking shape about a year ago.
SubCat’s relocation from Skaneateles to the four-story building beside Red House opened up a host of collaborative possibilities between the two entities, with Montage in the middle.
Van Luven said that helped determine the type of facility the caf would become. When Montage opens June 11, it will serve coffee, tea, beer and wine and a light menu in a comfortable, modern atmosphere where Red House patrons can mingle before and after performances, artists recording at SubCat can grab a bite or a brew and relax, and the caf will serve as another link between Armory Square and the Near West Side.
When Van Luven joined the Near Westside Business Association, the caf was already in the works.
“When I heard about that it was a matter of me either going to another bank or working with a local bank, and it was a no-brainer,” he said.
Seven years ago, Van Luven was shopping around a plan for a tea house in a city that had never had a tea house before, and it was a tough sell, he said.
“Seven years ago, there were a lot of things small businesses couldn’t get at all,” he remembered.
His second food venture has been a very different experience, with the caf ‘s opening date set roughly a year after the concept was realized.
“This microloan program works really well,” Van Luven said. “It’s a really great program.”
Funding the future
For graphic designer Whitney Daniels, becoming loan eligible will be handy down the road, even though she doesn’t have an immediate need for the cash.
Daniels launched WRKDesigns, a full-service graphic design firm, from her West Side home last October.
“It was always something I wanted to do,” Daniels said of opening her own business. “I didn’t really expect to do it so soon, but it just sort of came together that way.”
The 2009 SU graduate had some experience running the day-to-day operations of a design company, so she just “jumped in with both feet, (it was kind of scary)” and was relieved to find resources like the Business Associaton and South Side Innovation Center existed, she said.
She’s almost through the eligibility process, which meant creating a business plan, something she didn’t need to start her own firm, and never thought she’d put together. Now that she has the plan, when it comes time to expand, she’ll be ready.
Keep it simple
Not even a year after the first NWSI Business Association meeting, the group now has nearly 60 members. Short remembers the first meeting drew a crowd of roughly 10.
“I remember back to when I walked around the neighborhood and no one wanted talk to me,” he said. “But instead of being overwhelmed by that, we have to draw in a group of people and prove it to them. Show the successes and prove it to them, and we’ll win them over.”
That’s his plan, he said. It’s that simple. And so far, it seems to be working.
For more about the NWSI Business Association, the microlending program, or the NWSI in general, visit saltdistrict.com .
Correction: The correct name of the credit union working with the NWSI on the microloan program is Cooperative Federal Credit Union.
