Count-Me-In for cash

A new nonprofit makes it easy for women -- even with bad credit -- to snag biz loans on the Net.

By Janelle Brown
Published August 25, 2000 7:00PM (EDT)

Think of businesses born on the Net and you probably think of billion-dollar IPOs, Stanford business school grads and venture capitalists in khakis. Low-income African-American women in Mississippi might not even come to mind.

But the new nonprofit organization Count-Me-In for Women's Economic Independence in Washington believes that should change -- and that even the least ostensible entrepreneurs should have access to cash.

The newly launched group serves as an online lending institution, giving micro-loans (under $10,000) to women who've had trouble securing funding from traditional sources. Founded by Nell Merlino, one of the creators of Take Our Daughters to Work Day, along with a group of other concerned women, Count-Me-In hopes to raise $8 million and dispense it to 2,000 women trying to start their own small businesses.

"Access to credit and capital continues to be a major issue for women business owners, especially women business owners of color," says Merlino, the group's CEO, who used to work as a consultant on public education campaigns. "A lot of women hope that someone in their family will loan them $5,000, or they go to a loan shark or get a credit card. There needed to be a support system and a credit scoring system that proves there has been discrimination against women and also shows [financial institutions] how not to do that anymore."

The 1974 Equal Credit Opportunity Act makes it impossible to track the gender of loan recipients. But there are plenty of anecdotes about the discrimination women face when they seek loans from banks. "The majority of women in the workforce make $25,000 or less, so the kinds of businesses they start are relatively small," Merlino says.

But because these kinds of loans aren't attractive to banks, many women find it difficult to get funding.

That's why Count-Me-In already has elicited such an overwhelming response. In just a month, it's raised $1 million, accepted hundreds of loan applications and given 50 women loans (with an average amount of $3,500). The money comes from businesses as well as individual contributors who may just want to chip in a few bucks. The women are expected to pay back the loan with 12.5 percent interest in terms that extend from six to 84 months -- somewhat comparable to a government-backed SBA loan.

But what distinguishes Count-Me-In is that it offers an extremely user-friendly application that's much more forgiving of applicants' credit problems, which may have arisen from divorce or other personal situations. By comparison, banks generally require entrepreneurs to have flawless credit records for SBA or other loans. Almost all of Count-Me-In's loan recipients also have annual incomes hovering around $20,000 -- hardly the typical small business clients bank tend to work with.

One woman who's received a Count-Me-In loan intends to start a gourmet sauce company. She plans to buy jars and labels, and find distribution with the money. Meanwhile, a single mother used her funds to develop a flower business. Others have used the loans to open beauty salons, Web design businesses, landscaping companies and car detailing services.

Heather McCartney, a 40-year-old dance teacher in New York, expects to use her $5,000 loan to expand her 18-month-old Ethnic Edibles, which sells cookies and cookie-cutter sets inspired by African culture. Before stumbling across Count-Me-In, McCartney was too intimidated to seek a loan from a bank. "I didn't want to embarrass myself, have to open my books. I thought [Ethnic Edibles] was too young for them to take a risk," she says.

Now she's hoping to quit teaching and run her business full time. "The Count-Me-In loan is such a validating gesture for me. Here is an organization that believes in what I'm doing and is willing to put their money behind it," she says.

It may seem odd to use the Net to target low-income women -- hardly the most wired group. Merlino acknowledged the challenge and says the group also plans to distribute print applications. But she's been pleased at how many women have found when surfing at libraries or community centers.

"I've gotten calls from women on phone cards who are in the library downloading the application," Merlino laughs. "We're talking about entrepreneurs, and if the Internet is a tool that's going to make this easier, a lot of them find ways to go online."

Janelle Brown

Janelle Brown is a contributing writer for Salon.

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