For a striking example of the vitality of American entrepreneurial drive look no further than Chinatown. I recently met Kevin Kong, Managing Director of Renaissance Economic Development Corporation (REDC) to learn about new business creation in New York.
With over 70% of its money coming from government sources, REDC is an NPO, which helps mostly immigrant and new business start ups with seed money and advisory services without the requisite collateral usually needed when getting loans. Grants from 10- to 30-thousand dollars are given at from 4-8% interest with a view to payment in 3-5 years. Within less than 10 years since establishment, REDC has been able to raise $14 Mil and has granted over $5 Mil of that to everything from nail salons, restaurants and other small businesses throughout the New York City 5 borough area.
The Kiva-like micro-financing concept is especially critical for new business growth in these hard times as banks scale back lending or raise fees beyond the reach of many small businesses. While the funds are open to all applicants, Kevin cites a very high Asian success rate (almost 70%) in securing financing for plans given to REDC.
We talked about the challenges new comers have always had in America in starting new businesses. The present challenges are seeing more and more individuals; many let go from large companies, setting up consulting or other new businesses and seeking REDC funds. “We are getting more applications than we can process,” said Kevin. They have opened offices in Flushing Queens and Sunrise Park Brooklyn to meet the growing demand from a diverse group of Asian, Hispanic, African American and other individuals.
We also spoke about how Venture Capital and NPOs can help with economic growth and recovery especially in a globally connected world. For traditional approaches to tech growth in NYC there is the heralded The Hatchery which is the East Coast’s venture capital response to Silicon Valley. Also for matchmaking of NPOs with Corporate sponsors Cause Effective has few peers in bringing together money with meaning.
What I came away with in meeting Kevin is a renewed hope that the American dream is still alive and well and that Mom-and-Pop shops continue to find opportunity thanks to people like Kevin and the work at the REDC.