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Jatczak: Group's classes, counseling and 'micro loans' help low-income entrepreneurs succeed

Times are tough for most entrepreneurs seeking a loan.

But for low-income borrowers who want to start a business, the hurdles to borrowing money can seem insurmountable.

That’s where the Wisconsin Women’s Business Initiative Corp. can help with so-called “micro loans,” to say nothing of counseling, classes and other aid for would-be or even fledgling business people.

“Folks who used to be able to access capital through banks or credit unions are finding that isn’t available, so our loan application process is up about 300 percent over last year,” said Julann Jatczak, vice president and chief operating officer of WWBIC.

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Interest in courses offered by her organization is up as well, rising from 2,500 participants two years ago to 3,000 this year.

“With the economic downturn, interest in entrepreneurship has gone up,” she said. “Part of that is due to people who are under- or unemployed reviewing all the options that are available to them as something to do or an income source.

“People who were thinking that they might one day want to start a business now are saying, 'here is the opportunity to do that,'” she said.

She describes WWBIC as a non-profit development organization serving Wisconsin that works with both men and women who are interested in creating, expanding or even stabilizing their small businesses.

The group works primarily with low-income women of color, though men receive about 30 percent of its aid. Most clients are in southern and southeastern Wisconsin, but it works with groups with similar aims around the state.

WWBIC offers a number of programs, including workshops on exploring entrepreneurship, writing a business plan or learning how to use software like QuickBooks for a business.

Jatczak emphasized that not everyone who applies for a micro loan gets one. (She also notes that the term micro loan is something of a misnomer. While the typical amount borrowed is around $30,000, it can be as high as $100,000.)

“We have to be fairly sure a borrower can succeed,” she said, noting that between 92 and 95 percent of WWBIC loans are repaid. “We have an underwriting process and look at the viability of the business and the borrower herself, her credit worthiness and experience.”

Jatczak said WWBIC manages what she calls a “revolving loan fund and the idea is that we have a pool of capital that we borrow and have to pay back.

“We borrow it in large chunks of money and then lend it out in smaller chunks. The idea is that as borrowers pay us back, we are able to relend out to next business. The money keeps revolving so we can help more than one business.”

WWBIC also works with banks to share the risk. In that case, the bank puts up part of the capital and WWBIC comes up with the remainder.

She said WWBIC partners with entrepreneurs to help them succeed.

“We don’t just say. 'here is the money, good luck and pay us back.' We say ‘let’s work together.’ They can turn to us for marketing or legal issues and people on our staff or our core of volunteers can help along the way.”

Even those who don’t qualify for loans can get help.

“We go through an underwriting process and if someone doesn’t meet our requirements, we have other programs like business education or personal money management available that folks can turn to shore up their personal financial history or their business feasibility," she said.

After they do that, she said, they will be a stronger applicant if they decide to reapply for a loan.

Jatczak said she considers clients who take a class and start a one-person business a success, in part because they are able to get off unemployment or welfare.

On occasion, some go on to hire many workers and even gain national attention.

Jatczak pointed to the success of Gail Ambrosius, a Madison-based chocolatier who took several WWBIC classes before launching her company. The former cartographer -- who volunteers for the group -- now has a dozen employees. She was recently featured on the Food Network and lauded for creating America’s “best little box of chocolates.”

“We are very proud of her,” she said.

Though the small business jobs act passed by Congress recently will help small companies get easier access to credit, she said the drive to open a business has to start from within.

“It doesn’t begin with government,” she said. “It starts with the passion of pursuing a dream and meeting a market niche. That’s what we explore in our introduction course ... looking at details like how they will pay for health insurance and things like that.”

Jatczak, who was a management consultant before joining WWBIC, said she believes opportunities for small businesses will improve as the economy improves.

“I’m always ‘glass-half-full’ person,” she said. “I think we are on an upturn now. We’re seeing small businesses actually coming around from cash-flow crises of last few years.

“They’ve had to hunker down and reorient, but now we are starting to see a turn. And with the advent of the small business bill, we will see more capital freed up… because that is where job creation will come from.”

-- By Brian E. Clark
For WisBusiness.com

For more information, go to http://www.WWBIC.com.

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