Small entrepreneurs keep demand for lending strong

The region's smallest entrepreneurs the sort of folks who borrow a couple thousand dollars and launch a business out of the front seat of a truck pay close attention to the national economic woes.

They just don't let it bother them too much.

The Nevada Microenterprise Initiative, which provides loans as small as $2,500 to start-up businesses, continues to see a steady stream of borrowers at its Reno office.

In fact, the organization is on track to match the $600,000 in lending it handled during 2007, says Deborah Prout, president and chief executive officer.

That $600,000 reflects a lot of loan applications. The median loan at Nevada Microenterprise Initiative totals about $5,000, and the organization never makes a loan larger than $35,000.

For $5,000, borrowers often can buy the tools they need to start a business, purchase a trailer or make a down payment on a pickup truck that's likely to double duty as their office.

And a growing number of borrowers, Prout says, are using loans from Nevada Microenterprise Initiative to begin leasing semi-trailer trucks so they can handle part of the flood of freight-hauling work that's available from the Wal-Mart grocery distribution center at Tahoe Reno Industrial Center.

Layoffs and the threat of layoffs from big companies encourages the entrepreneurial spark for some borrowers, says Edward Vento, senior business development officer for the microenterprise initiative.

"I'm seeing some well-qualified, well-experienced people," he says. "They've had it with the layoffs, and they're going out on their own."

A hang-up for many them, Vento says, is their lack of sales experience, no matter how strong their technical and professional skills.

Vento, who spent years in sales and marketing positions for international companies before joining Nevada Microenterprise

Initiative this year, coaches many of the borrowers through the sales process, step by step.

Not long ago, for instance, he spent some days showing a borrower how to make cold calls to potential clients, then turned the phone over to her while she made calls under his guidance.

"It becomes a whole different world for them," he says. "They just need some coaching."

Like big banks, the Nevada Microenterprise Initiative is cautious about lending into some industries in the current environment construction or home-improvement businesses, for one. Restaurants, for another.

"We would look at these very carefully," says Prout. "We would be stupid not to take a close look at some sectors."

Most of the would-be entrepreneurs who knock on the doors of Nevada Microenterprise Initiative have a strong understanding of how their business will fit into a market niche, even a tiny niche, says Vento.

But even well-managed small businesses have been rocked by recent economic weakness.

"We're watching some of our best clients struggle," says Prout. The issue for many of them is slow-paying customers, leaving them with little cash to operate their businesses, she says.

Financial and other support for the Nevada Microenterprise Initiative comes from the U.S. Small Business Administration, private-sector banks and businesses, foundations and state and local governments.