Introduction

Welcome to Self-Employment Loan Fund’s on-line orientation!  We are going to cover six basic areas of Self-Employment Loan Fund (SELF).  We will cover the history of micro-lending; the history of SELF as an organization; the training program; the availability of on-going business assistance; the loan programs; and then we will go over the application process.  If you have any questions, please call the SELF Office at 602-340-8834.

History of Micro-enterprise and 

Peer Lending

The SELF concept originated in Bangladesh in the mid 70's by an economist named Muhammad Yunus.  Yunus received his education in the states and upon returning to his homeland was appalled at the impoverished conditions of a good portion of the population, especially women.  He believed that if he could get the women to open some kind of business, they would have money to feed their children.  

After an unsuccessful attempt to convince the local banks to offer small loans, he began to loan monies from his own pocket.  He urged the women to form solidarity/peer-group circles within their individual communities or villages and called the women to work together and help one another to start their own businesses.  Each woman would then use a micro-loan ranging from $5 to $25 to start a business.  For example, one woman used the $20 loan to buy a goat and sold its milk.  She would then pay the $20 back with interest and the next person within her peer-group would start a business and borrow money until all had started a business.  

This model was so successful that as a result this program, the Grameen Bank was formed.  Today, the Grameen Bank has millions of dollars in assets.  Each year the Grameen Bank lends hundreds of thousands of dollars to women and is critical to the economy of Bangladesh. 

In the mid-‘80’s, 60 Minutes aired a story of the Grameen Bank and the Bangladesh micro-enterprise model. Visionary economists who saw the program thought this concept would work in the United States.  As a result of that television program, five similar programs were started in Arkansas, Southern Arizona, Chicago, San Francisco, and Los Angeles.  All work on the basic concept of the Grameen Model, lending small amounts of money to develop micro-businesses.

History of SELF

In 1992, at a national hunger conference in Phoenix, a group of women heard about the program in Los Angeles, called the Coalition for Women's Economic Development (CWED).  CWED was designed to target people in the barrios of East Los Angeles and Watts.  The Phoenician women formed a task force to research if a similar program was needed and could be successful in Phoenix.  As a result of their time and commitment, the SELF program became a reality in August of 1994.  

The organization was formed as a non-profit funded by the U.S. Small Business Administration’s Office of Women’s Business Ownership, the City of Phoenix Community Development Block Grant, Junior League, local banks, corporations, private donations, and foundations.  We are funded to serve low-income people who might not otherwise be able to start or expand a business.  

Classes have a maximum enrollment of 30 persons.  If enrollment exceeds 30 people, persons who do not meet the following criteria will be put on a waiting list: 1) Anyone who lives or does business in the enterprise zone;  2) Those whose income is within HUD's low-income guidelines.  If you are placed on a waiting list, you will be able to participate in the next session.

Our mission is to help low-income people, primarily women and minorities, become self-sufficient through self-employment.  Most of our participants are minority men and women operating home-based businesses.  To date, we have served over 3443 people.  We have lent approximately $516,432.00 in micro-loans to more than 139 individuals.  

We also have quite a few people who go through some or all of the training program and decide that entrepreneurship is not for them.  Some people develop the business plan and for some reason or another, it never quite comes together.  However, we consider these people successful.  More than likely, we have saved them time, money and the headaches associated with business failure.  Most people do not realize the extensive work involved in running their own business and that is what our program is designed to do - teach people what it is to run their own successful business.

SELF’s developmental task force has determined that there are three areas critical to business success: business training, technical assistance, and access to credit.

Business Training

Starting Your Own Business/

Business Plan Workshop

The course is designed for individuals who have not yet started a business or have been in operation for less than one year and would like to write or update an actionable business plan. The course provides participants with the knowledge and practical skills necessary to write a business plan and successfully run a business.  This business training program is accredited through Maricopa County Community Colleges.  This partnership allows participants to receive three college credits for the completion of SELF’s training workshop (provided that minimum enrollment is met*).   The class meets once a week for 10 consecutive weeks, from 6:00 - 9:00 p.m. at community college campuses. Click here for more information on upcoming workshops.

In the first two weeks, participants will analyze their expectations of business ownership, conduct a personal inventory, explore the feasibility of a new business idea, research the potential market for their products or services, and evaluate profitability. 

During the remainder of the course, subjects crucial to business success are covered. Topics include marketing, record keeping,  financial projections, sales strategies, product pricing, distribution, licensing, business structures, management, and so on.  At the end of the ten weeks, the goal is to have prepared a completed business plan.  

In addition to the workshop, you also are entitled to private business counseling to cover issues particular to your business.  During the workshop, you are entitled to six hours of one-on-one counseling.  

Cost

The course fee for the workshop is $150. A $25 deposit and completed application is required to register for the course.  You may chose to pay the fee in installments with the balance due on the second night of the workshop. You must have the entire $150 fee paid by the second week of class or you will be dropped!

Attendance

Participants are allowed no more than two absences during the ten week period.  If you miss more than this, you may continue to attend the workshops, but you will not be eligible for the Peer Lending Program.  If you are more than ten minutes late to class, you will be counted as absent.  Since there are no exceptions allowed for this attendance policy, it is suggested that you use your absences only if there is an emergency.  

Attendance and homework requirements are laid out for time management purposes.  It is very important that you are in class and complete the assigned work.  All of the homework relates directly to your business.  We want you to write a successful business plan, which will only happen if you do your homework and participate in the class activities. 

Instructors

The instructors for the workshops are certified Community College instructors and are current or former business owners.  By profession they are seasoned business experts and they have extensive experience in teaching others to operate successful businesses.

When you finish the course, the business counselors, the instructor, and members of the SELF staff will look at your business plan for purposes of completion, refinement, and polishing.  At this time we also determine if each person, who has indicated a desire to borrow funds from SELF, has met all of the eligibility requirements and if the business is one that will benefit from a SELF loan. 

* In the event that the minimum enrollment requirement is not met, SELF reserves the right to cancel the class or continue the class and offer it as a non-credit course.

On-going Technical Assistance

SELF has a group of people in all areas of business that volunteer to work with participants in the program.  These volunteers are bookkeepers, CPA’s, financial advisors, marketing specialists, small business lenders, etc.  They are available to answer questions about your business either through meetings or over the phone.  When you have an area of need, call the office and we will pair you with a volunteer.

SELF also hosts montly networking meetings called Professional Entrepreneurs Group (PEG).  All are welcome.  The meetings are held at SBDC, 2400 N. Central, Suite 102, from 8:00 - 10:00a.m.  We invite a guest speaker to discuss specific business topics in a roundtable-like format that allows for questions, participation, and networking.

Once your business is in operation and you have completed the training program, you can request a well-business check-up.  This is performed by a group of volunteers who look at information you provide about your business.  After evaluating this information, they will sit down with you to discuss your strengths and areas for improvement.

In addition, the SELF/Community Colleges partnership allows participants access to resources available at the college sites (i.e. computer labs, research facilities, libraries, etc.).

Micro-Loan Pools (Access to Credit)

SELF has two micro-lending opportunities: Peer Lending Program & Individual Lending Program.

Peer Lending Program (PLP)

To borrow from SELF’s Peer Lending Program (PLP) you must have completed the SELF training program or a similar approved training program and have a complete written business plan.  SELF does not conduct a credit check or require collateral for a PLP loan. The PLP takes place in a Borrower’s Circle.  

Borrower's Circle

A Borrower’s Circle is five to eight peers who have also successfully completed the Starting Your Own Business/Business Plan Workshop and who are committed to the process of group lending.  For the first six to ten weeks, you will participate in SELF’s Introduction to Borrowing.  This phase involves getting to know your circle members, organizing the circle, electing officers, writing by-laws, reviewing business plans, completing loan applications, and deciding on the order of borrowing.  Circle members determine loan order according to need and ability to generate income.  Two loans are issued monthly after the Introduction to Borrowing phase.  

Loan Re-payment

Payments are due semi-monthly until the loan is repaid.  You also have the option to double up on your payments.  For example, if you are required to pay $44 twice a month, you may chose to make one $88 payment for the entire month.  After the borrowing starts, borrowers’ circles are required to meet every two weeks for one hour each session until loans are repaid.  You meet for the purposes of making payments, discussing business issues, and continuing education.

Step-up Lending

The PLP is a step-up lending process with loans ranging from $200 to $5000. If you are a new business (or in business less than six months) you may borrow up to $500 for your first loan with a six month repayment period.  After your first loan is repaid, you may borrow up to $1,000 with a 12 month repayment period.  So within a six month period, you can get up to $1,500.  If you've been in business six months or more, you may borrow up to $1,000 for your first loan with a one year repayment period.  After this loan is repaid, you may borrow up to $3,000 for which you may take as much as 18 months to repay.  After that you can borrow up to $5,000 with up to two years to repay.  

What are the benefits of  micro-loan?

The peer lending component of the SELF program is designed to provide loans to those individuals who do not qualify for traditional lending opportunities.  We do not require collateral or credit checks for the PLP.  However, your total commitment to the process is our collateral.  It also helps to build or restore business and personal credit.  SELF reports your business loans with Southwest Credit Data on both the consumer and commercial reporting arms, so that when you pursue other credit opportunities, you are listed as a business with a good credit standing.  The objective of SELF’s lending program is to position your business for traditional lending.

What can a PLP micro-loan purchase?

Micro-loans are a start-up capital investment and to date have benefited micro-business owners in the following ways:

1.)   Nana’s Place Childcare – purchased play equipment and marketing brochures.

2.)   Cleaning Hands Cleaning Service – purchased cleaning supplies to meet the service needs of her first contract.

3.)   Jablonski’s Flooring – purchased equipment and Worker’s Compensation (Insurance) so that he could hire workers.

4.)   Mi Roperito (My Little Closet) – purchased $500 in fabric to make children’s clothing.

5.)   Hair Nails, Etc. – stocked the salon with hair products.

6.)   Unique Stitch – purchased a digital embroidery machine.

To give you an idea of other items purchased – company letterhead and stationery supplies, business cards, fax machines, computers, office furniture, playground equipment, marketing supplies, promotional materials, additional phone lines, computer software, inventory, etc.

Loan Restrictions

You may not use a SELF PLP micro-loan for the following things:

1.)   To pay off existing debt

2.)   To purchase real estate or automobile(s)

3.)   Product research and development

4.)   Certain kinds of publishing

5.)   Illegal or risky business

6.)   Multi-level marketing (i.e. Amway, Avon, HerbaLife, etc.)

7.)   Professional services (i.e. – you cannot pay a marketing consultant for marketing advice – SELF offers technical assistance for issues of business nature)

8.)   To open a non-profit agency (you may utilize SELF business training – but you may not use a micro-loan to fund the agency)

Loan Loss Reserve.  Five percent of your loan is put into a savings account called a loan loss reserve.  In the event that a circle member defaults or is unable to make a payment, the monies in the savings account will be used to repay the debt. When all loans are repaid, the balance of the loan loss reserve is returned to the circle members.   If a circle member is late more than 30 days, SELF will step in to collect the loan.

Individual Lending Program ( ILP) 

ILP loans available to qualified individuals who have operated a business for a minimum of 21 year and have a completed, current business plan.  Loans range from $3,000 to 15,000 with a 12 to 36 month repayment period.  Participants in the ILP meet with a Business Coach periodically.

Application Process  

1. Download an Orientation form ( click here). You must include this with your application to prove that you have completed the online orientation.

2. Answer all questions on the form and sign.  

3. Download a registration application (click here) and Agreement to Terms form from this website. (click here)

4. Answer all questions on the application and sign. 

5. Read and sign the Agreement to Terms form.

6. Mail completed orientation form, application, a signed Agreement to Terms, and your $25 deposit to:

Self- Employment Loan Fund, Inc
1601 N. 7th Street, Suite 340
Phoenix, Arizona 85006

Please double-check your application for completeness before you mail it to the office.  An incomplete application will slow down the enrollment process.  Application information is strictly confidential, however, we reserve the right to use demographic information for our statistical reports to funders.  Since participation in the SELF program is a considerable time commitment, please discuss your decision to enroll with all the people in your life who might be affected.

Please refer to the class schedule on this website for the next class start date and location. (click here)

Click here to go to a web page
that you can print, fill out and apply

Click here to go to download an 
Adobe Acrobat PDF file that you 
can print, fill out and apply.

(requires you have Acrobat 
reader installed on your system)

Click here to download an application
in Microsoft™ Word format

Click here to download an Orientation form
in Microsoft™ Word format