La Luz microloans are compounding success in Sonoma

Sometimes a microloan can make a macro difference in the success of a small business. The La Luz Center Microloan Program is proving that theory, making $100,000 available for low-interest loans to entrepreneurs in Sonoma Valley, with a concentration in the Springs community.

La Luz is striving to increase the community’s economic vitality and success by helping local residents start and sustain businesses. “We are looking for people who have solid ideas they are passionate about. We want to help them out,” said Juan Hernandez, the executive director of La Luz.

Loans range from $1,000 to $10,000 at an interest rate of 4 percent, and are available to business owners who would not normally be considered “bankable,” meaning they would likely not qualify for a bank loan.

The program was a success story for Noemi Vazquez, who borrowed $1,200 for an industrial sewing machine, and at payments of $45 a month has completely paid her loan off. It allowed her to expand her business from alterations and small projects on a standard sewing machine to taking on large projects like costumes for Ballet Folklorico and Quinceanera dresses.

Vazquez has lived in Boyes Hot Springs since 1989, and is an accomplished seamstress who does not need to use patterns. She’s grown her business by word of mouth. “Anybody need something made? They call me up,” she said, and her volume of work has greatly expanded because of her new machine.

Cliff Casola, who now owns Marshall’s Garage and Body Shop in Glen Ellen, has a $10,000 loan that helped him purchase auto-painting equipment and electrically upgrade his building. “I’m doing what I love and I’ve tripled the volume of my business,” the Sonoma native said. A graduate of Sonoma Valley High School and Sonoma State with a criminal law degree, Casola was a San Francisco police officer before returning to working on cars, specializing in vintage cars, a pursuit he has loved all his life. “It’s nice when people trust and rely on you,” he said.

The loan program was started with a $50,000 grant from Simon Blattner, who made the contribution in honor of his wife, longtime La Luz board member Kimberly Blattner. “We are looking for more applicants. Small businesses are the engine of American prosperity,” he said. “We want someone who says, ‘I don’t want to make tacos, I want to own a taco business.’”

Blattner has a long held belief in the value of lending money to help people get ahead, stemming from his experience as CEO of Rittenhouse Paper Co, where he set up a fund to lend money to employees at a plant in the heart of Appalachia. “Everyone paid back. Nobody was being hurt, they were all being helped,” he said of the experience that convinced him people given a chance rise to the opportunity.

Cynthia Owings, who owns Cynthia Scones and distributes her handmade, fresh fruit scones throughout Sonoma and Marin counties, received a 10,000 loan that she used as a down payment on an extra delivery truck and for operating expenses. “Since I got the loan I’ve been able to increase business,” she said.

With $40,000 of the La Luz microloan fund currently lent out, Valley residents John and Pam Story recently contributed an additional $50,000 to the fund. “It is really important to give people a hand-up rather than a handout,” John Story said. “Microloans have been successful throughout the world.” He explained that one of the biggest challenges to the program has been getting the word out that the money is available. “We want to reach people who are not necessarily comfortable asking for financial help,” he said.

Hernandez said it is La Luz’s goal to be able to move away from emergency help “which is what we do best,” to being more proactive in assisting people in achieving healthy lifestyles, higher education and financial security. The center offers classes, in conjunction with local financial institutions, teaching basic banking – how to budget and how to save. This is in addition to English classes, health fairs and computer classes, all geared toward being a catalyst for positive change.

The microloan ties into those goals by encouraging job creation and business development. Applicants are provided business mentoring in addition to the loan, and build positive credit as the loan program is administered through the Exchange Back.

Loans are from 12 to 36 months, depending on the amount, with no application fee and a $75 or $100 closing fee. The money can be used for a new business or an expansion for needs such as inventory, marketing, equipment, vehicles or general working capital. A loan cannot be used for debt consolidation or personal use.

Interested parties meet with Hernandez and fill out a “simple” loan application. Applicants then meet with the La Luz microloan committee, which reviews the application, provides feedback and perhaps requests more information before approval.

To apply for a La Luz microloan call Juan Hernandez at 938 5131.