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Wanted: capital for women.

Ambition and energy may be assets, but they rarely fill out a credit report to a banker's satisfaction. So how do women break out of poverty and into business? In Alaska, part of the answer may lie in Womensfund, an innovative program willing to take chances on small businesses run by women.

Womensfund is designed to find micro and small loans for small businesses owned by women. Incorporated last year, the non-profit agency aims to help women become economically self-sufficient. Project director Carol Mikos says the final result strengthens local economies, as low-income women move from welfare lines to profit lines.

"The key is to get women out of crisis and into a stable economy. Once they're in that stable economy, they tend to stay there," Mikos says.

Too often, a lack of education, credit history and assets combine with the "glass ceiling" of gender prejudice to deny financing to female entrepreneurs. "But now the banking world is changing," says international business consultant Kathryn Keeley. "There's a surge across the country to find alternative ways of financing."

Womensfund, Alaska's reflection of that surge, is based on a program developed by Keeley 16 years ago in Minneapolis, Minn. Keeley founded Chart/WEDCO (Women's Economic Development Corp.), a non-profit businesswomen who couldn't find traditional financing.

Chart/WEDCO used private money to make small loans to women starting or operating small businesses. Loans from $10 to $10,000 were used to help buy business cards, fabric, vacuums -- whatever was needed to put women to work. A welfare mother bought a computer to start a mailing label service out of her living room; a middle-aged woman bought the supplies needed to transfer her experience from years of cleaning up after her family into a profitable janitorial service. They are recipients of 2 out of more than 3,000 loans made by the program since its inception.

The program went beyond most commercial loan arrangements. It provided information ranging from product marketing, to what questions to ask a lawyer or accountant, to how to dress for a commercial loan interview. To overcome federal requirements that keep welfare recipients from owning assets, Chart/WEDCO sometimes put business assets in its own name until businesswomen were free of welfare. When traditional loan financing couldn't be found, Chart/WEDCO made its own loans, taking products or services as collateral.

"I've taken kids' bikes as collateral, and I have gone to collect," Keeley told reporters in a 60 Minutes news segment. Keeley brought the concept to Alaska in the spring of 1991 when she spoke at a "Women in Small Business" seminar. Intrigued by the possibilities in Alaska, she returned in August 1991, touring the state from Bethel to Unalaska.

Keeley then began working with Mikos at the Alaska Women's Commission. Mikos gathered a group of professional women, ranging from bank officers and attorneys to small business owners, and began brainstorming on an Alaska Womensfund.

Womensfund managers have spent the first months of 1992 putting together bylaws and policies. They also have sought funding and potential applicants. To sell the project, the group uses examples of the models Keeley established in Minnesota, several other states and more than 20 countries around the world.

Alaska's Womensfund is run by a seven-member board of directors. A loan committee will review applications, make recommendations for loans and assist applicants in business development.

Keeley found that just providing money isn't enough; new business owners need advice they often can't afford. Pre-loan preparation and follow-up business consultation are two of the hallmarks of the program. These strategies pay off; the Minnesota program has an 87 percent loan repayment rate over its 16-year history.

Another focus of the program is to offer small loans that can gradually increase as the client proves her ability, rather than starting out with a single large sum. Keeley recalls loaning a woman $500 to buy roses to sell on street corners one Valentine's Day. The roses were used as collateral.

With the profits, the woman repaid her loan and bought even more flowers to sell on Mother's Day. The loans and profits grew, until the once-homeless flower seller now owns three flower shops and two buildings.

Women who can't qualify for traditional loan sources can borrow up to $10,000 from Womensfund. They must demonstrate the need for financing and the ability to repay loans, supply collateral and accept specific restrictions on their debts and assets. Clients need to be within reasonable commuting distance of the Womensfund staff in Anchorage, to maintain a close relationship with the fund staff.

Womensfund plans to help businesswomen establish good credit so that within three years they can leave the program and become clients of traditional lending services.

Organizers aim to amass $180,000 for the program's loan pool and are soliciting donations from banks and other lenders now. Federal funds for loans will be available through the U.S. Small Business Administration after Womensfund has been in business for one year.

"The largest growing segment of the population is women in poverty, and the way to get out of poverty is to change your life," says Joan Zimmerman, president of Capital Management Inc. of Anchorage and a member of the Womensfund loan committee. "This is a way it's possible for women, from whatever education or background, to make changes in their lives."
COPYRIGHT 1992 Alaska Business Publishing Company, Inc.
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Title Annotation:Womensfund provides capital for small businesses run by women
Author:Murkowski, Carol
Publication:Alaska Business Monthly
Date:Jul 1, 1992
Previous Article:Women battle gender bias.
Next Article:Traffic stoppers; doing business along the Alaska highway.

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