Very small businesses, with one or maybe a handful of employees, can have a hard time getting financing as they start out.
But a Newark nonprofit called BrightStreet wants to change that. Rob Falzon is one of the founders.
“There are thousands of small businesses that are struggling to succeed,” he said. “They don’t have access to financing, they don’t have the business tools they need to succeed. These are very local businesses. I’m talking about the small businesses, so it’s wellness, education and childcare.”
Traditional sources of financing are not open to them.
“Those small businesses are declined credit at twice the rate of other small businesses, so as a result of that they’re often looking to predatory lenders or credit card debt,” said Falzon.
BrightStreet is in the phase of taking applications. Falzon said most of the businesses are seeking relatively small loans.
“We’re finding that demand probably is more in the $10,000 to $20,000 range even though we will go up to $50,000,” he said. “Our goal is actually we’ll finance them once, maybe twice, but we want them to graduate and actually go on to traditional financing.”
He says these microbusinesses can really help spark the economy, especially in low-income areas.
More than 95% of US employers are micro-businesses and nearly a quarter of all companies in the US have less than 10 workers.