Micro Loans = MAJOR opportunity for Yellow Bike Project

Here's another one from Pete Dahlberg over at the Yellow Bike Project. They recently found out that their estimated cost for the planned Webberville HQ was slightly under the actual amount needed, and are trying to make up the difference (appx $120k) with a number of smaller microloans. Here's the scoop on this program:

The Yellow Bike Project is kicking off a micro loan program to finance the last $120,000 of the total $300,000 of construction costs on our new headquarters facility. We'd planned to cover this with a conventional bank loan, but have just discovered that we won't be able to do so. The facility will be built on City land, and at the end of the 99 year lease the building will be turned over to the City. Conventional bank loans require collateral that is unavailable in this arrangement, since the City will own the building at the end of the lease, and so we have to to look for alternative borrowing mechanisms.

The microloan program is a win-win arrangement that will benefit both the lender and The Yellow Bike Project. On one hand, most saving accounts right now are earning much less than 3% interest. On the other hand, even if we could get a conventional lender, they would charge interest upwards of 8%. This program allows us to give a better interest rate to our lenders than they would get parking their money in a bank account, and we spend less money paying interest on a loan - freeing up more money to fund programs and supplies. And let's not forget what your money will accomplish in our hands: the completion of a long-term home for affordable self-serve bike maintenance in Austin. This is about communities coming together to create solutions. Wheatsville Co-op, using a similar program, raised over $715,000 from 160 investors for the recent expansion of their grocery store.

If you are interested in participating, visit http://www.austinyellowbike.org/microloan.htm where you can find details about the program, view a draft contract, and a webform where you can sign up to participate. There you will also find past and current balance sheets that demonstrate our ability to repay these loans. A Yellow Bike representative will contact you and arrange the signing of the contract and exchange of payment. To keep our books as simple as possible, we're limiting these loans to a minimum of $1000. If you'd like to help out, but can't swing a large enough loan at the moment, you can always make a smaller donation at www.austinyellowbike.org. Thanks for your consideration, and please feel free to spread the word!

This sounds like a rather interesting program, if they can get it to work. There was some discussion over on A2W about Yellow Bike's ability to pay back the loans, but according to their latest profit/loss statement they've been making a (marginal) profit over the past few years and expect to be able to pay all the loans back within 5 years. Interesting. I know a lot of my readers don't have a spare grand in the couch cushions, but if you do, and you support Yellow Bike's mission, why not help 'em out? Though there IS risk involved, the benefit to the community gained from the new YBP HQ facilities will be SUBSTANTIAL. Thanks for forwarding this Pete.