Youthful enterprise - Small Business Development Centers help young entrepreneurs get financing - Brief Article

Nation's Business, Nov, 1996 by Cara Hersh

I am a young entrepreneur with a great idea for a very small business, but I lack start-up funds. My age and short credit history have hindered my efforts to get a loan. What loan programs, grants, agencies, and the like are available to help young entrepreneurs? M.S.H., South Pines, N.C.

Perhaps the best place to start searching for funds would be a Small Business Development Center. SBDCs, funded jointly by the federal government and individual states, are usually associated with state universities. An SBDC can help you--at no charge--determine if your business project is feasible, develop a business plan, and complete your application for funding.

The SBDC for North Carolina, headquartered in Raleigh, is associated with the University of North Carolina. The number for in-state phone calls is 1-800-2850-UNC (1-800-285-0862) for calls from outside the state, it's (919) 715-7272.

If you are under 22, you can try the Young Americans Bank, in Denver. It is a state-chartered commercial bank covered by the Federal Deposit Insurance Corp. Its services--for customers no older than 21--include savings and checking accounts, certificates of deposit, loans, and credit cards. Call (303) 321-BANK (321-2265).

The Farm Service Agency (FSA) makes loans of up to $5,000 to rural youths ages 10 to 20 to establish and operate income-producing projects, including repair shops, catering services, and businesses involving livestock and crop production as well as arts and crafts. Application forms for youth projects are available from the more than 1,900 FSA offices across the country. For the location of the nearest office, check the blue pages of your telephone directory under U.S. Department of Agriculture--Farm Service Agency.

If your are disqualifies you from these programs and you can't get a business loan because of your short credit history, you can explore other options.

The so-called microloan programs created by the Small Business Administration (SBA) offer loans of $100 to $25,000 through responsible private, nonprofit groups. Microloan programs are generally more flexible than traditional banks. Mitty Owens, director of microloans at Self-Help, a nonprofit community-development financial institution in Durham, N.C., says that microloan decisions are based on a number of factors, including character references and the amount of money, time, and effort the applicant has put into the endeavor. To find out about such programs in your region, contact the Association for Enterprise Opportunity, a Chicago-based trade group, at (312) 357-0177.

You could also apply for other types of SBA loans. Check the blue pages of your phone book for the number of a local office of the agency.