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Thursday, Mar 28, 2024

VEDC Snags New Microloan Partner

Through a new partnership for its microloan program, the Valley Economic Development Center is focused on getting money into the hands of businesspeople rejected for commercial bank loans. The VEDC is working with ACCION USA, a microfinance organization based in New York, to disperse microloans of $1,000 to $25,000. An emphasis of the program is to lend to underserved Hispanic business owners and entrepreneurs. The Sherman Oaks-based lending organization looks to do 300 microloans to start-up businesses and existing businesses whose owners have maxed out credit cards or have been turned down by commercial banks, said VEDC President Roberto Barragan. “It is someone who lost money in 2009, broke even in 2010 and is looking to be profitable in 2011,” he said. To capture that Hispanic market, the VEDC has a website in Spanish about the microloan program. The VEDC also has worked with immigrant entrepreneurs of varying backgrounds — Russian, Armenian and Filipino. These businesspeople can get caught up by predatory lenders charging interest rates of 30 percent or higher, Barragan said. A VEDC microloan, by comparison, carries an interest rate of less than 11 percent, he added. Business owner Jerry Lozano learned about the VEDC at a business networking meeting, and later met with Barragan to hear what the organization could offer him. Several commercial lenders had turned down Lozano for a $20,000 loan. The VEDC microloan combined with angel investments kept LozaTech, Lozano’s software business, operating for five months — until he was able to take his product to market in April. The San Gabriel Valley-based company developed a software application that integrates social networking and business-related functions onto private network platforms. “It was just what we needed to turn the corner,” Lozano said. With his software getting to customers, including some in the San Fernando Valley, Lozano said he anticipates hiring 10 to 12 employees in the next year. The VEDC wants owners to create jobs, but it’s not required to receive a microloan, Barragan said. “We are encouraging them to create jobs, and in some cases where there is more risk, we will give more credit if there is a potential to create jobs,” he said.

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