When $200,000 stands between you and a dream, what do you do? You borrow the money, of course. But what if you have a good idea, but no one wants to listen?
Every small business that survives a few years in downtown Newark is a success. Janell Robison had made it through six years- six hot summers, anyway — owning and operating a Rita’s Ice treat walk-up window, not too far from city hall. Celebrity mayor Cory Booker even stopped by from time to time.
It was a great seasonal business for Robinson, a Newark city cop, and it provided part-time jobs to the same area teen-agers that Robison counseled as part of an after-school program with the police department. But the 2009 economic downturn hit the city hard, and Robison closed for good at the end of the summer. If you are a seasonal business, who is trying to stay open, then one thing that you might want to consider is selective invoice finance, this might help your business out. However, there may be plenty of other things that you can do to help your business.
Today, I’m beginning a new monthly series called “Debt Isn’t All Bad.” Each month, I’ll feature a real American success story that combines elbow grease and well-timed loan to prove that — despite the rantings of some extremists — judicious borrowing money doesn’t have to a bad debt. Instead, it can be a good investment. The stories come courtesy of an innovative new sector of the lending industry called Community Development Financial Institutions, authorized by the Treasury Department 20 years ago. It’s not quite micro-lending for Americans, but you can think of it that way.
While Robinson, 37, shut her doors, she didn’t give up. She doubled down. Robinson went looking for a spot in the busiest section of Newark, on Market Street. It wasn’t hard to find a spot, but this location was more expensive and, critically, would allow sit-down space. There was a big catch, however: to make the numbers work, she’d have to operate the store year-round. That’s good for employees, but bad for a firm that sells summer treats with a shelf life of about 24 hours.
Still, she was determined, so she took her story to local banks. Progress was…slow as watching ice melt.
“No one turned me down, exactly,” she said. “But they just wouldn’t respond.” Despite 6 years of experience running a Rita’s, banks didn’t think Robinson knew what she was doing. Despite putting up her own home as collateral, she couldn’t get anyone to invest in her dream, and in downtown Newark.
The money was essential.
“When we went into the place, all we had were three brick walls,” she said. She was looking for $200,000 to pay for capital improvements to the space.
Then she heard about New Jersey Community Capital, a Community Development Financial Institution set up to encourage small businesses in high-risk areas. In conjunction with the Brick City Development Corporation, NJCC operates a Newark Fund — a pool of money set aside to encourage entrepreneurship in Newark. Within a few months, she had her $200K and construction started at 191 Market Street almost immediately.
As with all CDFI loans, NJCC didn’t just give Robinson money. It also have her “technical assistance” — a crash course in financial education designed to increase her odds of success.
Robinson scooped her first ice on May 6. Soon, she had 15 part-time employees, most teen-agers, working at the place. Cory Booker even stopped by in August.
“That was the one day I wasn’t at the store,” Robinson said, laughing. “But he knows about us. He’ll be back.”
Robinson is in winter mode now. The kids are back in school, and she is down to five employees. But she is still open. She has expanded offerings to accommodate draw in office workers nearby. Talk about contrasts: She’s serving Hale & Hearty Soups next to ice treats.
“It’s unusual for a Rita’s. We have to educate customers,” she said. “But we are here. We are open.”
All it took was a dream, a little money, and someone who would listen.
To learn more about Community Development Financial Institutions, visit the Opportunity Finance Network.
To learn more about Rita’s new Newark location, visit its Facebook page.