Policies

In my role as Minority Business Enterprise Manager for the City of Charleston I encountered a significant number of business owners having problems with access to capital. In my present role as Tiny Business Coordinator in the conNECKtedTOO project of The Charleston Rhizome Collective I have seen that “Tiny Businesses” also referred to as mom & pop operations, are not comparable to enterprises classified as small businesses by the Small Business Administration (SBA) in that they have less than 250 employees and make much less than 750,000 in average annual receipts.

Following the essence of microloans as launched by Nobel Peace Prize recipient Muhammad Yunnus, we recognize that “Tiny Businesses”, although extremely important to our communities, are not capable of applying for and receiving microloans which are promoted by the agency to “Small Business” owners. Many times inadequate accounting practices, poor record keeping or the inability to satisfactorily complete a loan application prevents these business owners from having access to capital, even in cases of emergency to remain operative. Thus, these businesses do not seek these loans and many do not know that they exist.

It is with this understanding that the conNECKtedTOO project seeks to advocate for a loan proposal that provides Tiny Businesses with a reasonable opportunity for access to capital.

The conNECKtedTOO MISSION leads us “to support and promote TINY BUSINESS in Charleston, as a vital part of commerce and neighborhood.”

Theron M. Snype, Tiny Business Coordinator, conNECKtedTOO

The CHARLESTON RHIZOME COLLECTIVE believes that TINY BUSINESSES are nimble, adaptable, profitable, for the people. However they have not been well supported in front of the forces of gentrification in the Charleston area, as all statistics show. No tax break, no accessible loans, no public recognition for historical importance, no cultural evaluation of their assets, … And that is why we innovate and research.

We initiated creative conversations with thirty TINY businesses, through a booklet of questions. Among them there was the following one:

What don’t you understand about ? Choose one subject to elaborate

• Computers
• Hip hop
• Contemporary art
• Opera
• Activism
• Churches
• Micro loans
• Fake news

“Micro loans” was chosen as the least understandable subject by 60% of the TINY businesses we contacted. Another 30 % did not answer that multiple choice question.

Further conversations and previous experience moved us to envision a pilot program for loan proposals adapted to what we call “TINY businesses.”

PROPOSAL FOR LOANS TO TINY BUSINESSES

These loans would be part of a process, dedicated to establish a relationship of confidence between the TINY business and the lending institution.

• They would not ask for an extensive amount of paperwork that many TINY businesses are not equipped to provide
• They would not ask for traditional guarantees but be a way to create guarantees
• The first loan could be limited to help with an emergency (hurricane, equipment repair, training for an employee, health issue, adaptation to rent or property tax increase, death in the family…) and no more than $5,000
• The interests would be high (18%). However the cash amount of the interest would be going three different directions: a third for the Lending Institution, a third for a Savings Account in the name of the TINY business, a third for a collective fund dedicated to create a Circle of Relationships between TINY businesses borrowing money
• When the loan is fully paid the Savings account could be cashed by the TINY business, or used to be able to get a larger loan, or kept to grow some savings; the decision will be made by the TINY business who would have been made aware of the various possibilities and their consequences in specific free trainings and support
• The use of the collective fund will be discussed and decided between the lending institutions and the borrowing TINY businesses.

What is conNECktedTOO bringing to the table:

• A vision that is not business as usual, but geared to extend capacity of TINY Businesses to belong to today’s society
• A two year active project to generate collaboration and pilot a network embedded in an active and accessible mobile/app
• The voices and vision of 30+ TINY businesses
• The possibility of extending challenging and creative art projects and events dedicated to building equitable communities
• Access to individuals – inter-generational, grassroots, interracial – educators, artists, administrators or self-employed TINY business owners, who lend their experiences, research and advice

The present plan, timeline and budget of conNECKtedTOO, a project of Art & Culture In/With Community for Economic Development, are supported in large part by an ARTPLACE AMERICA award. Proposing policies adapted to TINY businesses is part of our commitment.

Additional support has been provided by the Gaylord & Dorothy Donnelley Foundation, a grant from South Arts in partnership with the National Endowment for the Arts, the SC Arts Commission, the LowCountry Quarterly Arts Grant Program and the N.E.W. program of the Coastal Community Foundation.

See Pictures of notes on wall and texts developed for INTEREST RATES

MICRO LOANS QUESTIONS TO TINY BUSINESSES

Our question in the Booklet was “WHAT DON’T YOU UNDERSTAND…” (see below)

The goal with the following questions is to deepen the answers we have received and start to deal with the WHYs and HOWs. My understanding is that we are not going to become a lending institution but we wish to influence institutions making micro-loans. They could benefit from our knowledge, experience and connections with TINY businesses they are supposed to serve. So we must know more from the TINY Businesses to again amplify their words and experience. We attempt to work for some social change and for me it means hope, honesty and easy access.

What do you think Micro-Loans are?

Is there any difference with other types of loans?

Are Micro-Loans appropriate for your business needs?

Do you think Micro-Loans should be easy to get for emergencies?

What don’t you understand about Micro-Loans?

Do Micro-Loans ask for as much guarantee as other loans?

Do Micro-Loans have low interest rates?

Do micro as in Micro-Loans, mean small loans?

Can you describe your ideal Micro-Loan?

Do you agree with the following answers:

WHAT IS A MICROLOAN?

A microloan is a small, short-term loan with a low-interest rate, extended to small businesses with low capital requirements or only a few employees. Microloans typically range from $500 up to $50,000. These loans typically carry a maximum term length of 6 years and average interest rates between 8 and 13 percent.

IS GETTING A MICROLOAN EASY?

Unlike traditional bank loans, microloans are much easier to qualify for and most registered businesses can qualify for a microloan. The standards needed to qualify for microloans are typically much less stringent than for other types of business loans at higher borrowing amounts.

ARE YOU OPEN TO DO ANY OF THE FOLLOWING?

Review personal and business credit reports

Have a strong business plan

Offer collateral or a personal guarantee

Invest personal funds into the business