Ecuadorean immigrant Noemi Muoz finds her slice of the American dream in small chunks of beef.
Preparing one of her succulent native dishes in the tiny kitchen of her recently opened restaurant - the cozy and homelike Rincn Ecuatoriano, in Arlington, Va. - Ms. Muoz is among the thousands of newcomers in the United States each year who set a course for success by becoming entrepreneurs.
Her path to business ownership last year, however, was not nearly as smooth as the sweet and foamy Ecuadorean naranjilla citrus drink that she serves her patrons instead of alcohol.
"In the beginning, we worked hard to open this business, because we started with nothing," recalls Ms. Muoz who, with her sister, runs the only Ecuadorean restaurant in the Washington, D.C., area. "We went to the banks for a loan, but they said, 'No, we cannot give you loans until you have three years in business.' And then they closed the doors."
Finding start-up capital is difficult enough for first-time entrepreneurs who are born in the US. It can be nearly impossible for immigrants who lack a credit history and who haven't built assets in this country, says Caroline Hayashi, program director of the Enterprise Development Group within the Arlington, Va.-based Ethiopian Community Development Council (ECDC).
Her organization, which is not limited to immigrants from the Horn of Africa, gave Muoz a $10,000 microloan to purchase a grill, chairs, a freezer, and advertising in local Hispanic newspapers. "We provide access to capital for those individuals that don't have access to it in a conventional way," Ms. Hayashi says.
Microenterprise lending here grew out of the highly successful group-lending practices started in Bangladesh in the 1970s by the Grameen Bank, which makes loans to groups of mostly poor women so they can start small businesses.
The model in the US, however, shifts away from the reliance on groups, and moves toward the more traditional factors of assessing individual risk, Hayashi says.
Lenders of microloans, in fact, scrutinize many of the same factors as traditional banks, she says, "but in a much more flexible way." For instance, the No. 1 consideration is the viability of the business. "I don't feel I help someone just by giving them a loan," Hayashi says.
But unlike most lenders, microenterprise programs will go out of their way to determine creditworthiness, and to "help build a credit history," through utility bills, landlords, church pastors, and others. The default rate is only about 5 percent, Hayashi notes.
Starting a business has been a time-honored method for immigrants to work their way up from the bottom rungs of economic life in America, says Elaine Edgcomb, co-director of the Microenterprise Fund for Innovation, Effectiveness, Learning and Dissemination (FIELD) at the Aspen Institute in Washington, D.C.
"It's still the case - perhaps even more so in today's economy," she says, noting there is an ever widening gap between the rich and the poor.
"If you're at the low end of the economy, it's very hard to bring in enough money to sustain a family in a reasonable way," Ms. Edgcomb says. "We have found that self-employment is a very important strategy - either as an add-on to a job, or ultimately, as something that is pursued as the sole source of income."
Over the past 10 years, the 200 microloan programs operating throughout the country have provided more than $44 million in loans, and have assisted about 54,000 businesses, Edgcomb notes. There are, however, about 2 million low-income entrepreneurs who could potentially use these funds. Serving them becomes a dual challenge of "raising funds to provide reach" and "reaching out" with better marketing in areas where the loans are already available.
Another ongoing challenge is to assure that the loan recipients receive adequate follow-up, says ECDC executive director Tsehaye Teferra. "Our interest is not only lending the money," Dr. Teferra says, "our interest is making sure we have clients who are going to be successful, and self- sufficient. That becomes very critical."
Like other microlenders, ECDC provides its clients with intensive ongoing technical assistance and training, including lessons in how to start a business, cash management, bookkeeping, and marketing.
Learning these business skills, as well as the more nuanced social skills required by American consumers, is the key to providing immigrants and refugees gainful employment, says Eric Robinson, program coordinator of ECDC's refugee-employment services in Washington, D.C.
"The dreams these people have are just like ours, no matter where they come from," Mr. Robinson says. "They have a vision and they have hopes. And we want to support them as best as we can, and not just make them a number."
Indeed, when Honduras immigrant Gustavo Zelaya arrived more than 10 years ago, he had a dream of opening his own auto-repair shop. With limited options at the time, the auto-mechanic engineer had no choice but to work for another business. But he remained unsatisfied.
"For the salary I was making, I thought it was worth it to start my own business," Mr. Zelaya says.
Two years ago, he secured a $23,000 loan from ECDC to buy an auto lift and other equipment for his one-bay shop; Centro America Auto Repair, in Manassas, Va.
Now, with business booming, he plans to expand and hire some employees. Zelaya never questioned his ability to make it in this county, despite also being turned down for loans from traditional sources.
"I had it in my mind I was going to do whatever it takes to get my dream," he says. "You just have to push and keep trying. If one place closes the door, you keep trying until you get what you want."
(c) Copyright 2000. The Christian Science Publishing Society