Although Clark was embraced by the neighborhood, banks weren't so kind when she wanted to expand her home child-care business to a full-fledged day-care center.
Two rejected her for a loan, despite her good credit, bachelor's degree in business and associate's degree in early-childhood education. Then her husband, Kenneth Maxwell, read bout Finanta, a community-development financial institution that gives small loans to entrepreneurs.
Clark is one of three business owners who will be spotlighted Thursday as recipients of a new "microlending project" in Philadelphia. Under a program guided by the Urban Affairs Coalition, six big banks are collaborating to provide $322,500 for loans to small businesses to be administered by Finanta.
"One issue we have all been aware of for a while is that very small businesses in low- and moderate-income communities have difficulty obtaining bank loans," said Don Kelly, the coalition's director of Community and Economic Development. "The banks have standardized systems that require procedures and documentation that is sometimes difficult for a mom-and-pop shop to meet."
The microlending idea became well-known after Bangladeshi economist Muhammad Yunus gave small loans to poor women and saw how they helped entire communities. He won the Nobel Peace Prize in 2006.
Kelly said it took a year for the coalition's economic development committee to select Finanta, on 2nd Street near Girard Avenue, to partner in the project.
Each bank provided services from programs they already have in place, Kelly said.
For example, Patrick Kelly, senior vice president of Bank of America and chairman of the task force that developed the program, said Bank of America contributed $112,000 to Finanta for its loan-loss reserve fund, a fund required as a safeguard against bad loans.
That money enables Finanta to borrow $750,000 that it will lend to small businesses, Patrick Kelly said. And Citibank provided a grant to help Finanta provide technical assistance to entrepreneurs, Don Kelly said.
The microloans range from $1,000 to $50,000. Alyssa Ryan, of Finanta, said that the organization also provides smaller loans, between $500 to $15,000.
Don Kelly said that planning for the microlending project began long before the demonstrations against big banks by the Occupy Wall Street movement. In fact, he said the Urban Affairs Coalition began to bring community groups and banks together decades ago after findings that banks were "red-lining" poor and minority neighborhoods.
"They would draw a red line around an area and refuse to grant loans, even when a business owner or homeowner was qualified," Don Kelly said. That practice in the 1950s and '60s led to the decay of many city neighborhoods, and banks were required to make loans under the Community Reinvestment Act of 1977, he said.
This microlending program continues that legacy.
"It's exciting," Patrick Kelly said. "There is a need, and we figured out a way to meet it."
Contact Valerie Russ at 215-854-5987 or russv@phillynews.com, or follow her on Twitter @ValerieRussDN.
