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Community Capital of Vermont July 2007 E-Newsletter

An Alternative Financing Source
for Vermont Entrepreneurs
In This Issue
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IDA Websites

From Emily Kaminsky, Fund Manager

Welcome to our July issue! I am back to work part- time. Thank you to Olivia for continuing the e- newsletters while I was on maternity leave!

This month, our Quick Links section at left highlights links related to Individual Development Accounts (IDA), an innovative program that many loan funds and social service agencies use to encourage low and moderate income individuals to save for business start-up, homeownership, or secondary education. Read about Vermont's IDA programs below. Articles this month highlight: - Community Capital Borrower - Young Rembrandts - Tangible Assets, Vermont's IDA program - Community Capital Can Now Report to the Credit Bureau - Update on Job Start

SEARCH FOR BOARD MEMBERS: Community Capital is in search for individuals committed to our mission to serve on our board. In particular, we are looking for individuals that reside outside of the central Vermont area. If you are interested in serving on our board, please contact Emily Kaminsky at (802) 479-0167.

Young Rembrandts
Community Capital is proud to present Young Rembrandts - one of Community Capital's newest borrowers.

Young Rembrandt owner, Ariane Ehtesham, taught 4th grade at Underhill ID School in Jericho for 6 years. Although she loved teaching and thought she would make this her lifelong career, her job was not secure due to the shrinking enrollments in our rural schools. After being laid off (and then being asked to return!) a number of times, she finally decided she needed to find a more certain career path for herself and her family.

Ariane knew about the Young Rembrandts drawing program because her daughter had been involved in it through her school. When she heard from a friend that the business was for sale, she and her husband George began looking into it. They began doing their homework. For Ariane, it was important that the business offer a product that was educationally valuable and one that she could feel proud of. For George the financial security and future potential of the business was important. Together they made the decision that the Young Rembrandts franchise was an excellent business for them to pursue.

Unfortunately, the nature of the Young Rembrandts business is that there are very few "hard" assets and they had difficulty securing funding through traditional lenders. Just as they were about to give up, they stumbled upon Community Capital while investigating their local Huntington Community Revolving Fund. With Community Capital's more flexible lending policies, they were able to secure the financing needed to buy the business.

They have only owned the business for a little over a month. Fortunately, summer is a relatively slow period in the year which allowed them the opportunity to learn the day-to-day operations gradually. In this short time, they have been actively selling the program to new accounts and have already added 3 new accounts for the coming school year! They are excited to be able to offer this great program and are excited by the future potential of the business.

For more information, please visit contact Ariane Ehtesham at (802) 659-4380 or emai at

IDA Tree
The Vermont IDA Program, offered by the Vermont Community Action Agencies, is designed to enable low to moderate income Vermonters to save a part of their earned income for a first time home, a small business, or post secondary education or training. Savers are matched 2:1 on their $500 savings for up to two years. Participants generally save between $25 and $41 monthly to reach their goals, and they receive 12 hours of financial education as well as homeownership training, career counseling, or business counseling to improve their success in asset ownership. The Vermont IDA Program helps participants increase their commitment to their communities and offer stability to their families.

Allison, a single mother, knew she had to go on to college if she ever wanted to earn a liveable wage and pull herself and her daughter out of poverty. When she heard about Tangible Assets, the Central Vermont IDA program, Allison jumped at the opportunity to set aside some of the money from her part-time job into a 2:1 matched savings account. She attended our financial literacy classes, where she was particularly interested in investment strategies, and stayed in school. After saving for two years, she applied her $3,000 to her tuition. A bright and confident young woman, Allison will graduate this spring with a degree in nursing, and a concentration in obstetrics and nurse-midwifery.

Individual Development Accounts are a proven strategy for helping low and moderate income families move out of poverty and secure an economic foothold through home purchase, business development, and education and training. Already, more than 700 families have saved, or are still saving, learned financial management skills, and purchased their assets. Since 2001, 142 people have invested nearly $411,000 in businesses; 69 people have invested more than $160,000 in education and training; and, 53 families have purchased homes investing more than $178,000 in equity.

IDAs are available throughout the state: contact your local community Action organization for more information, or to enroll.

BROC-Community Action in Southwestern Vermont, 1-800-717-2762
CVCAC-Central Vermont Community Action Council, 1-800-639-1053
CVOEO-Champlain Valley of Economic Opportunity, 1-800-287-7971
NEKCA-Northeast Kingdom Community Action, 1 -800-639-4065
SEVCA-Southeastern Vermont Community Action Council, 1-800-464-9951

CBA Logo
Community Capital is excited to be part of a nationwide effort led by Credit Builders Alliance, an organization that helps small alternative loan funds like Community Capital report to the credit bureaus.

For several years, small loan funds were not able to report their borrowers' loan repayment history to any of the three big credit bureaus due to a policy instituted by the credit bureaus that required each reporter to have at least 5,000 accounts and report electronically. This policy served as a major obstacle to loan funds whose mission was to not only help entrepreneurs start or grow their businesses but also to have a chance to (re)build their personal credit.

Alternative loan funds like Community Capital are one of the few ways that individuals without the credit score to borrow within the financing mainstream have to improve their credit scores. Up until now, borrowers with poor or no credit who successfully borrowed and repaid loans from loan funds like Community Capital saw no positive benefit on their credit score. As a result, borrowers were unable to graduate to conventional financing after they paid off their Community Capital loan.

Credit Builders Alliance is a consortium of small loan funds like Community Capital. By working together, members of CBA have negotiated with Experian to report their borrowers' credit. Visit for more information. New member loan funds are being sought and are encouraged to apply.

With Job Start legislation successfully passed in the Vermont Legislature and signed by Governor Douglas, VEDA is now preparing to transfer the Job Start loan program to the Office of Economic Opportunity (OEO). Community Capital is currently working with OEO to hammer out a grant that will transfer the Vermont Job Start loan fund to Community Capital by September 1, 2007.

Community Capital expects to receive approximately $375,000 in cash to lend and $195,000 in loans receivable. Community Capital will also receive approximately $57,000 in Legislative approprations to support the operation of the Job Start loan fund at Community Capital.

As of June 30, 2007, Job Start at VEDA stopped taking new applications due to the pending transfer. Any applications to Job Start should be forwarded to Community Capital for processing. The Job Start loan fund will be run similarly to Community Capital's existing micro loan program. Community Capital will qualify applicants for the Job Start program first. Job Start eligibility is primarily related to household income. Applicants must have an income less than 70% of HUD median.

Community Capital staff and members of the board look forward to using the Vermont Job Start program as another tool to work with our partners around the state to promote micro and small business development.

If you have news that you would like featured in any of our upcoming e-newsletters, please contact me at 802-479-0167 or Until next time...

Emily KaminskyCommunity Capital of Vermont

phone: 802-479-0167