Loans help Bronx small store owners expand

By Erin Arnold
Staff Writer

Leonor Chavez couldn’t have opened Diana’s Party Supplies and Flowers without it. Rosa Oviedo never would have gotten her restaurant, Tropigood, off of the ground without it. And Leon Barber (shown at left) never would have improved the window display for In Our Image Studio without it.

What is it, exactly? It is a small business loan program from a local nonprofit agency called ACCION New York. Established in the city in 1991, this nonprofit micro enterprise development organization now has several locations within the city’s five boroughs, including a Bronx office on 161st street, within walking distance of Highbridge. ACCION, which means action in Spanish, helps self-employed individuals by providing them with small loans to start or expand small businesses.

“ACCION is a great program and it provides good services in a outlet that is lacking,” explained Laura Chittick, a VISTA volunteer working in new business development for ACCION.

Ms. Chittick decided to work at ACCION after spending five years in the banking industry. As a result, she has seen many entrepreneurs open restaurants, beauty shops, flower shops, street vending businesses, and taxi services with the loan money they receive.

Small business owners often face myriad obstacles before they stand a chance of making a profit and getting ahead. High costs, uncertainty of success, and long hours are just a few factors that they must worry about. Fortunately, nonprofit agencies such as ACCION New York make this process a bit easier for some hard working individuals.

A variety of people come to ACCION looking for help in starting a new business or expanding an existing one. Most of the clients have been turned down by larger banks, where they do not qualify for loans. Diana Chavez, for instance, applied for small loans to buy a refrigerator to keep flowers fresh in her party store. Two banks denied her before she finally found help at ACCION. Rosa Oviedo used the loan from ACCION to purchase an air conditioner for her small Columbian-themed restaurant in Queens.

ACCION partners with several larger financial institutions, including Banco Popular, which refers customers that it cannot serve. In addition to the carefully tailored services offered by ACCION, clients also have the opportunity to build good credit, something they wouldn’t do if they borrowed money from an unlicensed loan shark. ACCION reports to the 3 major credit bureaus so small business owners can repair bad credit while making payments or establish a good credit history if they have no previous debts.

Leon Barber, owner of In Our Image Studio, located in the Bronx, is just one of the success stories that ACCION boasts. Mr. Barber turned his love for photography into a profitable business venture several years ago. After seeking help from the Bronx Overall Economic Development Corporation (BOEDC), he was put in contact with ACCION NY and obtained a small business loan. “I was actually looking for some business planning services and not financial help,” he explained. “I was referred to Nathalie Bernal, who is a loan officer, and she told me that I would probably qualify for a loan.”

The first step of the loan process includes an orientation session. Once that is complete, a loan officer interviews the potential client and starts the paperwork. Mr. Barber remembers that included providing three forms of ID, finding a co-signer, showing proof of business, and demonstrating advertising. He also had to specify what he would be using the money for. “The requirements were tough, but not impossible,” Mr. Barber said. “I decided to go for it.”

And it paid off. Within two weeks, Mr. Barber’s paperwork had gone through the appropriate channels and he got a phone call that he was approved for the loan. “The wait time was great – almost two weeks exactly had gone by and I got the phone call to come pick up my check. It was really good!” he said enthusiastically. “The money came just in time.”

He used roughly $2000 to put up a new sign for his storefront and put the rest of the funds towards paying bills. And he is carefully planning for the future also. “I pay back my loan religiously. I plan to open another studio within the coming years. As soon as I pay back this loan I want to apply for another one so that I can expand,” he said.

“Roughly 10% of our clients are start-up businesses and the others are current entrepreneurs looking to expand or improve their businesses,” said Ms. Chittick. ACCION never guarantees its clients that they will receive a loan. Denials might occur for any number of reasons. “Sometimes the client doesn’t have a proper business plan,” Ms. Chittick explained. “Other times we sit down and discuss with them how moving from the home to a storefront location won’t automatically improve their business. We also can’t accept clients who have filed for bankruptcy within the last year.”

But for those who are approved for a loan, ACCION offers other support services to ensure that the client succeeds. Simon Flax provides in-house technical assistance. He is available to answer accounting and cash flow questions. A local law firm also offers free legal advice. Still, Ms. Chittick cautioned that the agency’s focus is primarily on lending. “Some nonprofits try to do so much they end up doing nothing. We like to keep our focus,” she said.

Mr. Barber’s photography studio is located at 1855 Westchester Avenue in the Bronx.