In New York City, microloans have promoted small business development in low-to-moderate income communities. Now, thanks to a $500,000 loan fund for green cart businesses created by the Laurie M. Tisch Illumination Fund, the Office of the Mayor and ACCION New York, microloans will also play a crucial role in bringing fruits and vegetables to neighborhoods with limited access to these healthy foods.
The Green Cart proposal, recommended by the Food Policy Task Force, will increase access to fruits and vegetables in low-income communities underserved by supermarkets by providing 1,000 new permits for fruit and vegetable stands. To be phased in over two years, the legislation requires vendors to operate in designated neighborhoods where consumption of fruits and vegetables is low.
However, permit holders will need capital to cover green cart start-up and inventory costs, and street vending is typically an industry that lacks access to mainstream financing. As informal start-up businesses, street vendors do not have the length of time in business or documentation, such as tax returns and sales records, that are required by traditional banks.
The $500,000 loan fund will help green cart vendors overcome barriers to business financing by offering reduced interest rate loans capped at 9.99% with requirements that are more flexible than those of traditional lenders.
"The most inspiring effect of a microloan is the positive change that it brings to the business owner's community," says Gina Harman, president and chief executive officer of ACCION New York. "By partnering with Mayor Bloomberg's office on this initiative, we will support not only underserved businesses, but the health and wellness of low-income New Yorkers."
About ACCION New York and New Jersey
ACCION New York and New Jersey is a nonprofit microlending organization that contributes to the economic development of the New York metropolitan region by providing loans and advisory services to individuals and small businesses that do not have access to traditional sources of credit. As a leader in both U.S. microfinance and local small business lending, ACCION New York has provided over $77 million in small loans since its inception in 1991. Ranging from experienced restaurateurs to home-based businesses and native New Yorkers to recent immigrants, loan recipients have transformed capital into citywide economic development, positive community change, and personal empowerment.
In January 2009, ACCION New York combined operations with ACCION USA.