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Photo by: Shannon DeCelle

Banking on Community
Loan fund supports microentrepreneurs in ways traditional banks would never dream of

Donald Ravenell, owner of Mahogany Barber and Beauty Salon, doesn’t mince words when asked what it was like seeking start-up financing from banks. “The experience was not very pleasant,” he says, in a tone that implies he’s understating by a wide measure. Despite having a strong business plan and even some business school, Ravenell had a bankruptcy almost a decade in his past, and the banks just couldn’t get past that, he said.

Microenterprises—businesses with five employees or less—often face these kinds of problems, says Paul Stewart, senior loan officer at the Capital District Community Loan Fund, a nonprofit community financial institution headquartered on Orange Street in Albany’s Arbor Hill. Microentrepreneurs have to jump hurdles not only of credit history, but also collateral, and the fact that banks just aren’t as interested in smaller loans, which are just as much work for less profit. Even if a microentrepreneur can get a loan, it’s likely to be at a steep interest rate.

This, says Stewart, is a shame, since these very small businesses are the foundation of a functioning community. “If large businesses are allowed to drive small ones out, the communities are the losers,” he says. With small businesses you get a better mix of goods and services and the businesspeople are more invested locally. Stewart describes his vision as “locally owned, locally controlled businesses, keeping the wealth in the community.”

In order to promote that, the loan fund accepts deposits and donations from socially concerned investors (individuals, churches, banks’ community reinvestment departments) and makes loans of up to $25,000 to microentrepreneurs starting or expanding businesses. (It also makes loans to nonprofits—its original mission.) It focuses on women, minority, or low-income businesspeople and businesses serving low-income communities.

Staff respond to about 300 funding inquiries a year, and they look at each borrower on a case-by-case basis, examining not just credit and assets, but also business plans and overall wherewithal to carry out the plan. Final determinations are made by a volunteer loan committee that meets monthly. “The primary importance,” says Stewart, “is that the entrepreneur is heading in the right direction.” The loan fund’s fixed rate of 8 percent is usually well below market rate for these kinds of loans—especially considering the number of small business owners who resort to credit cards for start-up.

Ravenell, and hundreds of others, turned to CDCLF for financing when the banks said no—or seemed likely to. When Laurene Walsh needed a loan to covert her garage into a day-care room for her expanding home child-care business, she didn’t even go to the banks. Having worked in banking for 13 years, she knew her numbers weren’t going to be worth their while. Besides, the loan fund had the best rate out there. “The loan fund really wanted to lend,” she recalls. “A large bank, they have a lot of business, they don’t have to look at a small businessperson like me.”

Chris Pepe and John Wallner of Anokha Imports learned this the hard way. Pepe had begun importing and selling handmade crafts from India after she spent a year there for graduate school. Fluent in Hindi and comfortable traveling to meet the craftspeople herself, she had a great advantage over most importers, who bought from middlemen in New Delhi at steep markups. After a summer trade show netted them $17,000 worth of wholesale orders, they knew they needed funding to invest in inventory and business infrastructure.

Banks, however, “more or less laughed at it,” recalls Wallner, who first encouraged Pepe to make Anohka a “real” business, and then joined her as a business partner. “They said if you want to take a second mortgage on your house, you can do that.” But then a loan officer at HSBC introduced them to Stewart. “We didn’t know what to think after being told by everyone in the world that we were unbankable,” says Wallner. But Stewart, he remembers, said they had a great story and a great potential to help both their community here and the craftspeople in India. After a little work on the business plan, they got a $15,000 line of credit.

The loan fund’s “community-based banking” model goes far beyond being less strict about credit scores, emphasizes executive director Bob Radliff. It’s about providing a “complete package” to help entrepreneurs succeed. The fund offers classes in conjunction with the College of Saint Rose, legal clinics, marketing seminars, and energy-efficiency advice. Recently it introduced a special program focusing on the needs of child-care providers, and there are plans for a special seminar on issues facing hair- and beauty-salon owners.

The loan fund didn’t always have such a wide range of support services and trainings, but as its microenterprise lending got going in the mid-’90s, “We realized we couldn’t make these loans in a vacuum,” says Radliff.

Mike Mathews, associate professor of business and MBA program coordinator at Saint Rose, is enthusiastic about the training partnership, which began in 2000. “I owned a business for several years, so I have a soft spot for people starting businesses,” says Mathews. He and several other faculty teach, and bring in experts like loan officers, lawyers, and accountants. He says their program isn’t necessarily so different from a number of great business training programs in the area—except that it’s focused on the truly micro enterprises. “Really small businesses sometimes get lost in the shuffle,” he says.

Even this full catalog of offerings misses one of the main things that borrowers say sets the loan fund apart from its for-profit banking peers: the personal touch, from helping with the business plan to networking with other funders.

When Lissa D’Aquanni, owner of the Chocolate Gecko, wanted to move her homemade chocolates operation out of her basement, Radliff came with her to look at buildings. Wanting to stay in her Delaware Avenue neighborhood, she settled on an abandoned building that needed a complete gut rehab. Banks had no interest: The project was far too big for her current sales. “Their response was, ‘You need to be looking at a kiosk in a mall,’” she says, still shuddering at the thought. “I knew that was so antithetical to this business.”

The loan fund was on board, but its maximum loan was only a drop in the bucket for what D’Aquanni needed. “On paper the Community Loan Fund portion of it was so minute, but in reality they played a partnership role,” says D’Aquanni. When she went back to Radliff, despondent over the banks’ response, she says, “He charged me back up again, and went to the meetings with me.” That worked. “Having him there gave me credibility,” says D’Aquanni, and it made people at least look at the business plan seriously, which showed that the plan actually would work. And even once the funders were lined up, she remembers Radliff making phone calls and going to bat for her as the complicated closing process came together. “It wasn’t just like ‘I got you the funding now you make it happen,’” she says.

D’Aquanni’s project wasn’t a traditional plan: The construction portion included 20 to 30 neighborhood volunteers working every Saturday for a month doing everything from pulling down old walls to laying floor tile. Today, volunteers still help with projects from decorating to packing baskets at busy holiday times. D’Aquanni donates 5 percent of her gross sales (in the form of chocolate) to community organizations. The two other businesses in the building—a yoga studio and yarn store, neither of which existed before the building project—draw in additional customer base and make the little plaza an anchor in the community. “It’s a community-based business model,” she says.

That’s exactly the reason the loan fund was so excited about it. “It was more than a small business,” says Radliff. “It was an attempt to help improve a neighborhood.” They were also thrilled because they had given her a small equipment loan previously, and were happy to see that her business was ready to take the next step. “The relationship doesn’t end at loan closing,” says Radliff.

The loan fund is always excited about helping borrowers expand, and about taking on new and promising businesses. Radliff says he feels like they’ve finally reached a point of having all the pieces in place to do microenterprise lending right. The only limit at this point, he says, is that they need more investors. “There’s a tremendous need out there, and we have a limited capacity,” he says. “It’s the only thing holding us back.”

—Miriam Axel-Lute

Photo by: John Whipple

The River Rises
While other high-profile urban-renewal efforts get the money and the press, Troy’s River Street is quietly reimagining itself as a haven for arts-driven business

Relaxing on stylish but homey modern furniture, Nadia Trinkala and George Pisegna are discussing the relative merits of various urban environments, from San Francisco to Manhattan, as a well-groomed cat rouses itself from its sunbath and leaps to the arm of a sleek sofa for a bit of attention.

A husky female voice croons sultry neo-soul over the stereo, reinforcing the laid-back vibe, and conversation wends its easy way from the price of real estate in the Castro district to the architecture of downtown Troy.

“That’s why so many movies have been shot here,” says Pisegna, a former architect himself. “There have been six movies shot in downtown Troy, because of this incredible architecture. I don’t know of any other comparable small city with such great buildings.”

Curled on the couch, Trinkala concurs, referencing the plaque mounted in front of the nearby Rice Building commemorating the filming of Martin Scorsese’s The Age of Innocence.

Just then the front door swings open, and a pair of women step in from River Street to investigate the colorful crafts and knickknacks artfully displayed around the intimate space, as the kitty hurries over to investigate the newcomers. The sudden entrance of the two women serves as a subtle but irrefutable reminder that the conversation isn’t taking place in a well-appointed loft space, or the rec room of bohemian friends—as would be easy to believe—but in one of River Street’s many arts-themed retail establishments, All Blues Arts and Curios.

Before making disparaging assumptions about the easygoing Trinkala’s and Pisegna’s work ethic, though, know that neither really works in All Blues, which is owned by artist Jean Kreugger. The duo are just chipping in, manning the shop as a favor to their vacationing friend. (Pisegna laughs, “Poor Jean, she’s going to come back and find that Nadia and I have completely remerchandised her shop. Everything’s different.”) Trinkala, a dealer in modern furniture, actually operates out of the Bournebrook multidealer space, just down the street, and says she was attracted to Troy for exactly this genial and informal camaraderie.

Previously, Trinkala operated a store and gallery, Trink, in Cohoes. In her years there, she says she saw commercially driven renewal efforts begin and falter repeatedly. “Often, it seemed like, ‘Well, maybe it’s going to happen,’ but one shop would open, then close within a year. Then, another would open and close within a year. They never synchronized their efforts, and so there just weren’t enough people to maintain the momentum.”

Eventually Trinkala sold her business and took some time off. But the native Trojan reports that many of her Troy-based friends encouraged her to return, at least professionally. “They were telling me to come down here even when I was in Cohoes,” she says.

Despite some initial apprehension, Trinkala decided to give Troy a shot. She took a space in Bournebrook and, she says, on River Street she has found what she never quite got in Cohoes.

“It’s here,” she says definitively. “It’s really nice, and with the other merchants there’s a real sense of community. It’s a groovy atmosphere.” An atmosphere that includes everything from the aforementioned modern wares to antique furniture, office supply stores, a record and rock-memorabilia shop, a historic-home-supply warehouse, several hair salons, a live music venue, and all manner of arts-and-crafts retailers.

Pisegna agrees, though he notes there are some improvements to downtown Troy yet to be made—the addition of a significant nightlife first and foremost among them. “We need an after-5 life,” he says. “Right now, there’s nothing to do after 5 or on the weekends.”

Nevertheless, both Trinkala and Pisegna are optimistic. “We’ve overcome the really bad things,” Pisegna claims. “The city has really stepped up. It just needs the last ummph, the last push.”

“I’d like to see the return of the river festivals, like the Arts Center used to put on,” says Dana Rudolph, who owns and operates Dana Rudolph and Company, a jewelry, bead and gift shop on River Street. “One a year, like Larkfest. I think it would put River Street businesses on the map. I mean, no one knew about Lark Street before Larkfest.”

Rudolph is in a position to know: In 1977 she opened her first jewelry shop on Lark Street in Center Square, and was instrumental in engineering the first Larkfest. She and buildingmate, Mary Miller, the proprietor of long-defunct Lark Beat Records, cooked up a scheme to call attention to local musicians, artists and artisans—a scheme that worked in spades.

Larkfest has continued to expand and to grow in popularity. For her part, though, Rudolph is not sure that it hews tightly enough to its original purpose. “It’s become increasingly commercial,” she says, suggesting that she would prefer something more focused for her new home on River Street.

Because, despite the old regional prejudice against the Collar City—“We called it the ‘Troylet,’ right?” she says laughingly—Rudolph has been won over by the city and its growing cadre of artists. She says she’d like to see a celebration of the creative community emphasizing—and offering for sale—their contributions: “I would want to do antiques, arts and crafts—juried craft shows and the like. Enough with the tube-sock stalls, Larkfest can keep those.”

In fact, Rudolph is full of ideas for the continued revitalization of Troy; in addition to her own, she is a storehouse of jumpstarts she’s heard others propose. Various restaurants, coffee shops and performance spaces, for example (Rudolph is in agreement that more restaurants and nightlife opportunities are imperative for Troy’s long-term success), or the creation of a summer Writer’s and Artist’s Institute at Sage’s Troy campus.

“Years ago, I saw the poet Nikki Giovanni speak in Troy, and she said, ‘Mark my words, in 10 to 20 years Troy is going to be on the map,’ ” Rudolph recounts. “And it’s true, it’s happening. We’re hot. I think it’s going to continue to develop along an arts line, and it could be a real mecca. It’s got all the plusses of small-town friendliness, but it’s a city, and I like the fact that I walk over to City Hall and talk to the mayor.

“I’m not like a real businessperson: I’m an artist,” Rudolph says. “But when I was looking into this place, I just had a feeling that it was going to pop. It just feels magical.”

In All Blues, the cat has left off attending to the shopping couple, who have smiled their goodbyes and set off down River Street to root through the sidewalk displays of antique desk chairs, outdated kitchen accessories, steamer trunks, kitschy religious prints, etc. Trinkala and Pisegna have have finished discussing the coffee and tea house soon scheduled to open across the street, and Pisegna suggests that they should open a jazz club.

“Oh, yeah,” enthuses Trinkala, “a really funky jazz club would be great.”

In the minds of its residents, it seems, all systems are go on River Street—if you’ve got an idea, all you need to do is move on it.

“We can only go up,” says Pisegna. “The future is bright and obtainable.”

—John Rodat

Photo by: Leif Zurmuhlen

The Good Neighbor
A Mansion Neighborhood store owner builds her business— and her ties to the community

Lina Kouchpileava, owner of Diana’s Wine & Liquor at the southwest corner of Grand Street and Madison Avenue in Albany, is waiting for the customer to make up his mind. After looking intently at the selection in a display case for a few minutes, he decides on a particular Australian red wine, a shiraz.

“That’s a good wine,” Kouchpileava says; however, she adds, it’s “a little watery” compared to another, similarly priced Australian shiraz she likes better. She muses on the relative merits of another of the Australian brands she has in stock, then stops herself and laughs: Kouchpileava says that she probably shouldn’t be putting down anything she has on hand. “I have to sell everything in the store.”

She’s certainly trying hard enough. She’s doing her best to build the business by being responsive to customer requests. She also stocks a good selection of New York state wines, as well as some rare Russian vodkas. Walk past the store any day except Monday, when it’s closed, and you’re likely to see Kouchpileava inside. She explains, “I work from 9 to 9 everyday.” Even when business is slow—as it is on a weekday morning like this—she has plenty to do, taking inventory and stocking shelves. Most customer traffic, she notes, doesn’t start until after 4 PM, when people are going home from work.

Diana’s Wine & Liquor will celebrate its second anniversary in business this June. Kouchpileava, who already owned and operated Stephanie’s convenience store just across Madison Avenue, decided to open a wine-and-liquor store after hearing so many requests from customers.

The liquor store is located in what was previously a butcher shop; the space was empty for many years. Kouchpileava remembers that when she first took a look, it “was horrible inside.” The floor was a mess, she explains, and an entire “rotten” wall had to be replaced. Even knowing what the old meat-market looked like, it’s hard to picture it as being the same place as this clean, well-appointed store, with its wine bottles in sparkling glass cases and liquor bottles neatly shelved in every conceivable nook and cranny.

Not everyone in the neighborhood was enthusiastic about the prospect of a liquor store, however, when she made her plans known. Such businesses in urban neighborhoods can be problematic, attracting homeless alcoholics and other, as one resident put it, “undesirable” elements. The Grand Street area is fragile in a way both peculiar to, and typical of, many distressed urban blocks. One bad influence can make the quality of life exponentially worse.

Happily, through Kouchpileava’s careful planning and the design of the store—with all the merchandise behind the counter or in a display case—none of the worst-case scenarios came true. The wine-and-liquor store has become part of the fabric of mini-marts, sit-down and take-out restaurants, beauty parlors and beauty supply stores that form the economic backbone of the neighborhood.

Grand Street resident Theresa Johnson is one of those won over by what Kouchpileava has done with the place: “I’m psyched that she’s successful.”

Tom McPheeters, longtime member of the community and one of the forces behind the effort to restore St. Anthony’s Church into a community center, was initially in the opposition, too. But that has changed, and he now says, “She has certainly done her best to be a good neighbor.”

This goes beyond the well-maintained store, and the flowers she plants out front in the summer. For a period of three months last fall, Kouchpileava donated 10 percent of wine sales to Grand Street Community Arts, the organization that is revitalizing St. Anthony’s (the church is located directly across Grand Street from the store). According to McPheeters, this came to more than $700.

Kouchpileava came to the United States from Poltava, Ukraine, on Dec. 22, 1992; she has no trouble remembering the date. Beginning with practically no money, she began as a waitress and housecleaner. Summing up two decades of effort, she notes that she worked hard, and for as many hours as necessary, to build a life here. She’s not the first to say it, but Kouchpileava means every word when she says that this is “the best country in the world.” The sentiment was reinforced by a trip home three years ago; the Soviets may be gone, but the difficult lives of her friends haven’t improved much.

One can’t help but wonder, what’s with the names of the stores? After all, her first name is Lina. Well, it turns out that Stephanie and Diana are her granddaughters. She proudly has their pictures on display by the cash register. When Kouchpileava had only the convenience store, Stephanie, the older sister, would repeatedly ask her grandmother: “Baba Lina, whose store is it?” Then, she would turn and mercilessly tease her sister: “See—it’s my store.” So, to restore sibling harmony, Diana got “her” own store, too.

Though this causes some confusion with customers, Kouchpileava doesn’t mind: “I love it when they call me Stephanie or Diana, [instead] of my own name.”

—Shawn Stone

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