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Neighborhood Trust FCU gives $12,250
loan to food vending entrepreneurs |
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 Roberta and her husband Raul started a vending business over eight years ago selling Mexican and Dominican food on the street.
They usually stand with their vending carts on
busy intersections, both in the predominantly-Dominican area
of Washington Heights and in the South Bronx. They’ve
been in this business long enough to know well the challenges
of vending on the street. The weather is one, since extreme
temperatures are bad for business. Another challenge is
securing a permit or “vending license” from the
City of New York. In addition to the number of requirements
that must be met, the number of licenses available has been
frozen since 1993. Getting a license has become increasingly
difficult.
Last November, Roberta and Raul got a lucky break when they
won a bid for a vending permit to sell their food in
a South Bronx park –parks are generally tightly regulated
places for vending. While excited, Roberta and Raul were also
concerned with the cost of the permits. In addition to an
upfront fee of $1,200 for each license (the total cost of the
license ranges from $8,000 - $10,000 depending on the size
of the vehicle), Roberta and Raul had to obtain insurance
for both vehicles, which totaled $ 6,200. If they failed to
pay the fees, the permits would be offered to others on a waiting
list.
 Roberta
and Raul didn’t have the cash in hand, and what’s
worse, they had no access to credit. A few years ago, Raul
had gotten deep into debt including owing a loan shark
(Raul was still making weekly payments of $400 to the prestamista towards
interest only). In trying to help him, Roberta’s credit
was damaged as well. Knowing that the City would only hold
their spots for a limited time, it seemed that they had no
choice but to go back to the loan shark.
When they heard about Neighborhood Trust, one of NYCfNAC's participating credit unions, Roberta and Raul
started to feel hopeful. “Nosotros pensabamos que no se iba a poder
porque sabemos que nuestra situación del crédito
es muy mala,” (We thought that it wouldn’t be
possible [to get the loan] because we knew that our credit
situation was bad) Roberta explains. When they contacted
the credit union, their prospects seemed much better, but there
were still some hurdles to overcome. While their entrepreneurial
skills were evident from the beginning, the couple didn’t
have financial statements for their business or bank statements
to document their monthly business income. With technical
assistance from the credit union, they put together the necessary
information showing their weekly gross sales and monthly
expenses. This permitted them to document their
business cash-flow and to demonstrate that they could repay
a loan from the credit union.
 The other hurdle was their credit history. Raul and
Roberta had several delinquent accounts in their credit report.
Normally, when borrowers with a spotty credit history apply
for a loan with a credit union, they are given the option
to work on improving their credit by starting with a small
loan amount or a fully secured loan to prove they
are creditworthy. In this case, Roberta and Raul
had no time to prove themselves, so the credit union encouraged
them to find a co-signer. With Raul’s brother as
co-signer, Neighborhood Trust approved their $12,250 loan.
Raul and Roberta continue to sell at their usual street locations
and at different street fairs, but selling at the park, especially
during the summer, they are certain, will increase their
sales twofold.
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