It's not easy for small business owners to tap the loans they need to fix problems or grow to the next level. Because the hard truth is: the less money you are making, the less you will be able to borrow from a bank.
That's the wall that Microenterprise Services of Oregon was set up to break down. And so far, they have paid out more than $390,000 in grants and loans to more than 80 Portland businesses.
"My business at one point was dying financially," says Jimmy Wilson, who owns and operates a dry cleaning shop on the corner of North Vancouver and North Fremont. "They helped me get back on track. I'm breathing easy now and I'm creating jobs for other people. If it wasn't for MESO, that wouldn't be happening."
Tamarat Alemu, left, owner of Williams Market, outside the store with his uncle Desaleme B. Goole and Asera Kassa.
It was Wilson who told Tamarat Alemu, owner of Williams Market, about MESO. Alamu was operating out of Wilson's business building at the time. Now they have separate businesses a block away from one another. MESO helped Alemu through a critical growing period. The Skanner News Video: Coffee Roasting Demo.
"When I expanded my business in 2008, it was a critical time for me, and they helped me get a loan, and at a very good interest rate," Alemu said. "I could not get that loan by myself, but because MESO is a stable organization I was able to get that grant."
MESO's loans come as part of a package deal that includes three years of financial advice, credit building, business planning, management training, marketing, goal setting and more.
"What distinguishes us from other organizations, I think, is that we've taken a very hands-on approach," says Sanford Maddox, MESO's executive director. "It's a very personalized approach. We work with 12 to 15 clients at a time so we're small but we have a 98 percent retention rate. You can't mass produce small businesses."
Increasing Business Income
MESO's goal is not just to help a business pay a bill or add equipment; it's to help businesses owners thrive, grow and
Sanford Madox, exective director of Microenterprise Services of Oregon will hand over to Nita Shah in January 2011.
keep the money flowing in, says Nita Shah, who worked with Maddox to create the nonprofit, and will be taking over as executive director in 2011.
"Our clients have created 81 new jobs and 98 percent have stayed in business. They've bought homes," Shah said. "Our goal is to increase their income by at least 25 percent in the three years, but many have gone far, far over and above that."
One of those clients is Brandi Weber, owner of The Imagination Station, a sunny daycare and after-school center on North Portsmouth Avenue. Weber started out looking after 10 infants and toddlers in her own home. Today she and her staff of 10 – 15 childcare workers nurture 40 children in a big, bright well-equipped building with space for outdoor play and a webcam so parents can see what's going on at any time. Weber credits the MESO program for the expansion and for multiplying her income by four.
"They're super wonderful," she said. "It was one-stop shopping for all my business needs. I got a hefty grant and a loan – I believe it was either no-interest or very low interest. It was unbelievable."
Weber went from having no health coverage to having very good health insurance. Now she even provides health insurance to her staff. "I had advice from knowledgeable people who had been in business," Weber said. "It took us out of the poverty level and quadrupled our income." MESO's goal is not just to help a business pay a bill or add equipment; it's to help businesses owners thrive, grow and keep the money flowing in, says Nita Shah, who worked with Maddox to create the nonprofit, and will be taking over as executive director in 2011. "Our clients have created 81 new jobs and 98 percent have stayed in business. They've bought homes," Shah said. "Our goal is to increase their income by at least 25 percent in the three years, but many have gone far, far over and above that."
What Does it Take
All fired up and ready to apply? But do you fit MESO's bill? Maddox and Shah say they are looking for business owners who already have some experience – or people who have extensive experience in an industry and know the ropes. The businesses MESO works with are very diverse, like their owners, and usually are one-person small businesses bringing in less than $100,000, many less than $50,000 annually. MESO's clients are stylists and designers, auto mechanics and bike mechanics, pest controllers and bookkeepers, designers and fitness gurus.
Having a business or financial failure in your past, does not disqualify you. But you must be willing to open your financial books to MESO, work hard, and get actively involved in the three-year program. MESO doesn't just hand out big bucks with no strings. You need to have a strong business plan and be prepared to take one step at a time. MESO wants to know its clients have the skills to succeed for the long term.
"Sometimes just a little money well-placed at the right time can make a huge difference," Maddox says, citing one loan of less than $250 that paid a vital bill. "That client hasn't looked back since."
And MESO's clients come back again and again for advice and when they need to expand.
"They do come back to us -- and we never say No," Maddox said. "They call us often for growth loans, for example. Many of our clients are expanding to a second location."
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More information about small businesses in Oregon can be found at Oregon Microenterprise Network