ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Friday, April 19, 1996 TAG: 9604190005
SECTION: BUSINESS PAGE: A7 EDITION: METRO
DATELINE: CHICAGO
SOURCE: HILLARY CHURA ASSOCIATED PRESS
PROJECT HELPS LOW-INCOME people help themselves out of poverty and into independence.
One year after her sports magazine failed, Donna Beasley was looking to start another business. About $65,000 in debt, she didn't bother asking for a bank loan.
Instead, she went to a nonprofit group that caters to low-income minority women, got advice on starting a publishing company and received $4,500 in loans. Now she's on her way to publishing her third and fourth books for black children.
Beasley is one of 5,000 Chicago-area women who have gone to the Women's Self-Employment Project. The program is one of at least 200 around the country that has jumped on the global bandwagon, realizing women can run successful businesses if given advice and small loans.
``They don't hold it against you if you have a business failure. They look at that as a plus. It shows you have experience. It shows you have a commitment to bring a product to life, and it demonstrates that you will work to make a business grow,'' Beasley said.
Beasley said she earns less than the $30,000 she used to take home as an advertising executive, but that's OK.
``I'm doing what I love and loving what I do. I have the potential to make more than I did in advertising,'' she said.
Before it writes a check, the Women's Self-Employment Project requires potential borrowers take a class on starting or maintaining a business. It also offers training in fashion design, food preparation and child care - the three most popular fields for its clients.
In 10 years, the group has lent $1.2 million, gotten more than 30 women off welfare, counseled more than 1,600 and helped more than 500 open businesses, said the group's president Connie Evans.
Eight-five percent of her clients are black, about 11 percent Latino, and the rest white.
Clients' loans average $2,000, but they range from $200 to $25,000. Evans said the group charges 15 percent interest and has a 94 percent repayment rate. Banks must maintain a 99 percent rate to remain profitable, according to the American Bankers Association.
The Women's Self-Employment Project said 85 percent of its clients' businesses are still operating and that 65 percent of its customers report a higher net worth than before they started the program.
The group accepts almost all of the women who successfully complete its programs, Evans said. She said it demands collateral and has auctioned computers, dining room furniture and doughnut makers from women who could not repay their loans.
About 8 percent of the U.S. work force is self-employed, and about one-third of American entrepreneurs are women, according to federal statistics. A January study from the Clinton administration found that women-owned businesses have limited access to funds and lack of information about where to get money.
Evans said banks set up women to fail by preferring to lend large amounts of money than small sums.
``If I need a hammer and you give me a hacksaw, I won't be very successful,'' she said.
The Charles Stewart Mott Foundation in Flint, Mich., has given Evans' group $665,000 since 1987 and believes tiny businesses are a good way for welfare recipients to become part of the mainstream, said Mott's Jack Litzenberg.
He predicted micro-enterprises would continue to grow because America's safety net is catching fewer and fewer people.
``People will have to be more self-reliant,'' he said. ``This economy has been fueled on startups, and this is more of that trend.''
LENGTH: Medium: 76 lines ILLUSTRATION: PHOTO: AP Donna Beasley has published two children's booksby CNBfrom her in-home office with tutoring and financing from the Women's
Self-Help Employment Project. color