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Microfinance Goes Where Banks Fear To Tread
Gentle Parking has grown quickly since William Ortiz-Cartagena started the San Francisco company two years ago.
He now employs 25 people and says he turns a decent profit running six parking lots, including two he manages for the city.
When he decided to bid on a contract to run another city-owned lot, though, two banks turned down his application, citing problems with his home mortgage.
Bloomberg Businessweek reports that Ortiz-Cartagena turned to Opportunity Fund, a Bay Area microÂlender that had loaned him $10,000 to start his company. He soon got a $60,000 line of credit at 8 percent interest.
For a small business to get a city parking contract is unusual…because smaller companies can’t carry the cost of insurance,” he says. “It’s like David and Goliath, and Opportunity Fund is my slingshot.”
Microfinance lenders, originally geared to helping the disenfranchised, are providing more financing to small businesses that can’t get bank loans. While microfinance represents a tiny fraction of the U.S. credit market, it’s growing fast.
Photo by osito-pl.
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