Self-Starters Will Get a Jump on Success From Low-Income Loans

PASADENA â€”  No fancy signs or newspaper advertisements tell passers-by that inside the weathered two-story building on Painter Street is a businesswoman with a big idea.

Henrietta Samuels, 49, a seamstress, lives on the top floor in a cramped one-bedroom apartment she shares with her husband and two sons. Her workplace is a small bedroom table, where she sits day and night in front of a secondhand Singer.

She is one of many low-income residents in Pasadena and Altadena running “microenterprises�--everything from organically grown herb shops to child-care services to leather goods boutiques--out of their homes.

Under a Pasadena-based pilot program, Samuels and 18 other self-starters soon will have a chance to turn their microenterprises into something bigger. They will be eligible for small loans allowing them to buy inventory and raw materials, and to replace antiquated equipment. The nonprofit Neighborhood Enterprise Center program also is creating networks in which entrepreneurs share advice for avoiding common pitfalls in operating a new business.

Before she left her native Jamaica in 1980, Samuels already was sewing for a living. She sold hand-tailored dresses and did alterations.

But after a decade of self-employment, the loan program marks Samuels’ first chance to borrow the $1,000 she needs for a new sewing machine.

“My desire, my biggest desire, is to go professional,� she said on a recent afternoon, inspecting the hem of a long-sleeved fuchsia and turquoise dress. “That’s why I came here, because I wanted to do designing.�

Founders of the Neighborhood Enterprise Center say the three-year program will draw its participants from distressed neighborhoods in northwest Pasadena and Altadena, where home-based businesses are seen as viable alternatives to minimum wage jobs--but require starting capital.

Family Savings and Loan Assn. in Pasadena has agreed to provide low-interest loans ranging from $500 to $2,500, which will be distributed in a “peer group lending system.� Under the system, participants are placed in groups of three to seven people. In each group, loans are doled out one at a time, and each recipient must pay back the loan before the next person receives any money.

The center, one of four nationwide, eventually will assist 50 entrepreneurs, mostly women and minority heads of households, over the three-year period, said Anita Jackson, the program’s development coordinator. Programs are already under way in Philadelphia, Jackson, Miss., and the Rosebud Indian Reservation in South Dakota.

In northwest Pasadena, a largely minority community, there is a thriving crop of home-based businesses, according to a study by the Washington-based Neighborhood Reinvestment Corp., a public, nonprofit group that is contributing $30,000 to the project. But many residents don’t have access to bank loans through formal channels because they lack the necessary collateral and business experience, the study says.

“There are a number of people who make an effort and do not succeed based on their financial status,� said Jackson. “They simply do not have enough to operate a business successfully.�

According to the Neighborhood Reinvestment Corp. study, the median household income in northwest Pasadena is $22,000, 25% less than the median income citywide, and unemployment is 8%, 60% higher than the rest of Pasadena.

Some of those chosen to participate in the program run their businesses to supplement outside income. Norma Passarella and her daughter, Lorenza, for example, make children’s clothes and costumes and upholster furniture in their Pasadena homes while running a housecleaning business together.

They said they could use the loan to expand their operations. “What we can do is try and hire a couple of girls to go and do part of the work,� said Lorenza Passarella, 27.

Others work at home full time. Irene Duncan, 38, of Altadena, said she’s had her share of dead-end jobs, and she has now turned her full attention to making leather goods--purses, wallets and trendy black hats patterned after those worn by rap performers. She said she would use the money to buy more leather.

“I watch the youngsters. Whatever they wear, that’s what I make,� Duncan said. “They wouldn’t find these in the stores.

“I spent two years at Kent State toward my nursing degree, but I discovered sewing was inside of me. . . . I know I’m a designer because I’m always coming up with new ideas. Some days I can make $200; some days I can make $400. Some days I might make $15. But to me it’s better than being tied down to $40 a day.�