More Help to get small businesses running

The Philadelphia Inquirer – by Harold Brubaker

Jeremy Lauder represents the essence of entrepreneurship: creating one’s own job.

An architect by training, Lauder, 28, lost his job in that field during the heat of the 2008 economic crisis. Fortunately, he had a fallback in screen printing, a hobby he had been doing for fun with friends since 2004. Lauder went full time printing T-shirts in October 2008 and is now working 80 hours a week at his company, Derisory Designs, at Second Street and Cecil B. Moore Avenue in Philadelphia.

“When I went to school, I never in a million years thought I would end up doing this. I didn’t even know what screen printing was”, Lauder said. While studying architecture, he took an elective in screen printing and found that he loved it. But still, “I never thought I would end up doing this as a job. I just thought it was a hobby”, he said.

That changed when his job disappeared.

Lauder would not be in business if he were unwilling to put himself at risk, but without the help of a local nonprofit lender he would have been unable to purchase equipment to handle bigger orders.

After being turned down by four or five banks, Lauder got a $35,000.00 loan for new equipment, which was installed two weeks ago, and $9,000.00 line of credit from Finanta, a local nonprofit economic development group.

With the new equipment, Lauder “went from being able to do 300 to 400 shirts on a good day to being able to do 700 shirts an hour”, he said. Now Lauder, who also prints boxes for local clothing makers and tissue paper, has one part-time employee and others he calls when needed.

Finanta, formerly known as the American Street Financial Services Center and restricted to the American Street Empowerment Zone in North Philadelphia, this year was authorized to make loans up to $35,000.00 for the Small Business Administration throughout Philadelphia.

The SBA’s microloan program is designed to help fill a niche, an official said. “Most banks say, ‘$25,000.00, we can’t really do that’,” according to John Banks, lead business development specialist for the Philadelphia district office for the Small Business Administration. Banks said the problem for lenders is that a $25,000.00 loan has the same administrative cost as a $250,000.00 loan.

Other Philadelphia nonprofits are also helping new businesses. The Philadelphia Development Partnership, or PDP, helps would-be entrepreneurs through a micro lending program based on Nobel Prize winner Muhammad Yunus’s bank for the poor.

PDP clients, after taking a business-skills class a class run by PDP, have the opportunity to form a peer group that functions as an informal board for each other as a quasi loan committee for the “step lending” program, which starts with loans of $500.00 and goes up to $5,000.

The member who wants to borrow must make a proposal to the peers, but does not have to undergo a credit check and is not required to post collateral. To move up to the next level of borrowing, the previous loan has to be paid back on time.

Abu Tilghman, owner of Whole Unit Studios Inc., a photography and video company in Germantown, has been in a peer group since 2005 and has borrowed a total of $8,000 in three separate loans. A loan of $500 does not pay the costs of a production and helped Tilghman build his credit.

Under another PDP program, Jennifer Corbin borrowed $5,000 to help open the Barefoot Doctor Community Acupuncture Clinic in Fishtown last April. Corbin’s bank wanted nothing to do with such a loan, Corbin said.

The business is coming along. “At this point I have a pretty steady group of clients who come in when they need it”, she said, referring to acupuncture treatments. She’s encouraged by signs of development where she is on East Girard Avenue. “It’s encouraging that people are interested in space up there”.