Small Loans for Soon-to-Be Big Businesses Use microenterprise loans to help make micro a temporary condition.

Things were looking pretty bad for Margaret Quenemoen back in1991. Her run of bad luck started with breaking her ankles, beingout of work and having to live in her car. But hope came in theform of headbands she made for the winter sporting community inTelluride, Colorado. She hit a resort restaurant and ended upselling all of them to the tune of $130.

"I was living in a beautiful mountain town, and I wanted tostay-I didn't want to go home [to live] with my parents,"she remembers. "I realized that I could start abusiness."

She became a licensed street vendor and kept receiving requestsfor more items-shirts, vests, pants. "It was apparent I had areal business going," says Quenemoen, 41. When she took herwares to a trade show and scored an $80,000 purchase order, sheknew she'd need some funding to grow her company, Jagged EdgeMountain Gear Inc.

Enter the Utah Microenterprise Loan Fund (UMLF) in Salt LakeCity. Quenemoen went to her local Small Business DevelopmentCenter, which sent her to UMLF. "With their help, I built abusiness plan and I got that loan," she says. "Not onlywas the money critical, because I'd been turned down everywhereelse and all my credit cards were maxed out, but they [also] gaveme support." The support consisted of small-business classeswith other startups and connections to business mentors.

That type of help is typical of a microenterprise loan program,according to Bill Edwards, executive director of the Associationfor Enterprise Opportunity (AEO), the national association ofmicroenterprise development in Arlington, Virginia. "I wouldsay virtually every microenterprise program provides training andtechnical assistance to an entrepreneur," he says. "Or,if they don't directly provide that service, there's aninformation referral-to a local community college, forexample."

The information is just as valuable as the money to theseentrepreneurs, many of whom are in the early stages of theirventures and have very little business experience. In fact, theterm "microenterprise" is defined as a company with fewerthan five employees that is seeking $25,000 or less in capital.According to the AEO, there are currently 2 millionmicroentrepreneurs in the United States today. "If someonewants to start a business, their chances of success are going to bemuch greater if they work with a microenterprise program,"says Edwards.

That was certainly the case for Quenemoen, who now sells herJagged Edge line of products in three retail stores in Colorado andonline at www.jagged-edge.com. She recently paid off the $10,000loan she received through the microenterprise program and expectsthe company's 2002 sales to hit $2.8 million. "I woulddefinitely send [other business owners] to the microenterprise loanfund," she says. "If they're not in the Utah area,I'd refer them to one in their community."

What Now?

Your first step in seeking microenterprise loan funds should beto check out www.microenterpriseworks.org, the Association forEnterprise Opportunity's (AEO's) website. There, you'llfind a listing of organizations that offer microenterprise funds inaddition to general small-business support. Most of these programsrequire a business plan, but many of them offer assistance withthat step, too.

Your local Small Business Development Center, chamber of commerceand banks should also have information on programs available inyour community, says Bill Edwards, executive director of the AEO.Keep in mind, though, not every program will have the word"microenterprise" in the title-you'll have to do someinvestigating. Still, says Edwards, "A little time spent doingresearch is time well-spent."