Low-income help group gets new money: three-year-old local group gets $750,000 federal loan.

A Los Angeles organization which has been helping low income women start up their own businesses is one of 35 organizations chosen to administer a new federal program to get economically disadvantaged women started as entrepreneurs.

The Coalition for Women's Economic Development (CWED) received a $750,000, 10-year loan from the Small Business Administration, one of the largest of the 35 awards, said Juanita Weaver, an SBA spokeswoman. In addition, CWED was given a grant, which the organization is not obligated to repay, of $150,000 to administer the program.

Although the application for the grant was submitted in March, "I can't tell you that the riots didn't help to ensure the grants," said Forescee Hogan-Rowles, executive director of CWED.

For three years prior to the riots, CWED had been providing assistance and loans in four areas that were hit hard during the civil unrest -- South Central Los Angeles, East Los Angeles, the Pico-Union district and Long Beach, Hogan-Rowles said.

With the addition of the $750,000 from the SBA, CWED's revolving loan fund is near $1 million, which will translate into a lot of loans considering that the organization has set a limit on loans of $1,500 for first-time borrowers and $5,000 for second-time borrowers.

"It makes our fund one of the largest (loan pools specifically for women business owners) in the country," Hogan-Rowles said.

Nationwide, there are more than 4 million women-owned firms, representing 30 percent of all small businesses and the number continues to grow, according to the SBA. Aside from this program, which is a demonstration project, the SBA does not have any loan programs specifically geared toward women business owners, Weaver said.

Likewise, there are no special loan programs sponsored by private financial institutions in the Los Angeles area, Hogan-Rowles said.

The SBA program is not targeting entrepreneurs looking to become the next Apple Computer, but is for people seeking another way of supporting themselves and meeting family needs, Weaver said.

Patricia Saiki, administrator of the SBA, said: "We're going to provide these people with access to the financial tools they need to market their creativity and skills and get into action. We are going to give them an opportunity to achieve economic self-determination."

Unlike banks, Hogan-Rowles said CWED is interested in giving small loans. "It's not cost-effective for banks to handle such small loans. It comes out to $225 (of profit) for 15 months of work."

Also unlike banks, CWED has never turned down an application for a loan. But CWED makes all loan applicants take eight to 15 weeks of classes.

Applicants must attend classes once a week for two hours a day and are given four hours of homework on all aspects of running a small business. "We don't turn down loans, but we make sure you know what you're doing."

Since 1989, CWED has made 85 loans and not had a single default, she said.

The interest rate, 15 percent, is competitive with what women with sketchy or non-existant credit histories would get in the private market. "This is not a giveaway," Hogan-Rowles said. "For a lot of the women we serve, it is the first loan they have ever had."

For example, about a year ago, CWED made a loan of $500 to a woman who had been living on government assistance for the last 10 years, Hogan-Rowles said. The woman had just started a wedding business and wanted the money to buy a candelabra and a gazebo, items that she was spending money on renting.

At the time she came to CWED, the woman couldn't even afford an apartment and was renting out a room, Hogan-Rowles said. "Everybody told her, 'You'll never get a loan,'" she said.

But she got one, and every two weeks for a year she came by the CWED office to make a $40 payment -- the loan plus interest, Hogan-Rowles said. "Last month she made enough money off her business to move into her own apartment," she said.