Lehigh University students get special training in community development lending
Updated On: May 07 2013 04:22:23 PM CDT
Some local college students are getting a unique lesson in entrepreneurship and giving back to the community -- one business at a time.
One of those businesses is Hammer Training and Fitness in Allentown. It's not for amateurs.
"It's a one-stop shop for any kind of fitness," said owner Rodney Guignet. "Martial arts. We do MMA, kickboxing, boxing."
But when the gym hit a cash crunch and needed to expand, banks went running.
"The money was hard to come by," said Guignet. "They just didn't feel safe giving us any kind of term loan."
That is, until the gym turned to a micro-lender called the Rising Tide Community Loan Fund.
"We provide loans to small businesses," said Chris Hudock, Rising Tide's director.
But you might be surprised who the loan officers are in this case. They're actually college students.
"They're actually doing what I do," said Hudock.
We're not talking all of Rising Tide's loan officers, but two Lehigh University students are getting the full experience of evaluating businesses to see if they qualify.
"You just kind of get a gut feeling about whether the loan can be repaid or not," said Lehigh senior Sam Henderson.
"I'm a college senior and I'm actually getting involved and helping someone make their dream come true," added fellow senior Anna Tarassishina.
The fund pumped $75,000 into Hammer Training under a seven year small business loan. The interest rate is 10 percent -- higher than some traditional banks, but lower than others.
"We were able to hire more sales people and bring more staff on," said Guignet.
It's a one-two punch of more staff and more advertising that's getting this business stronger.
"It was a dream for a long, long time," said Guignet.
Currently, only Lehigh University participates, but Hudock is open to partnering with other schools too. For now, there are no plans to expand the program beyond two students.
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