The fund loans federal dollars to ASNTB members through the fund's financial partner, the Permaculture Credit Union
The Arroyo SECO Community Revolving Loan Fund (CRLF) seeks to educate, support and empower our local Time Bank community through micro-loans and access to professional development. Supported by philanthropy and the community it serves, this charitable fund supports community revitalization by providing equitable access to resources for members of the Arroyo S.E.C.O. Network of Time Banks (ASNTB).
Meeting People Where They Are
More and more, the mainstream economy offers fewer opportunities for local growth, community enrichment and personal empowerment. The first of its kind ever established by a Time Bank, the fund offers our network of artisans, entrepreneurs, visionaries and worker-owned cooperatives access to community-supported, low interest micro-loans to build their small businesses. Like community-sustained agriculture, local currency movements and alternative economies like Time Banking, supporting small business, cottage industry and worker-owned cooperatives nurtures human-scale economics in our communities and promotes the values of the Sharing Economy..
Time Bank members are enterprising, resourceful and creative. Many members have launched local business, restaurants, co-ops and hand made products such as jams, jewelry, clothing, botanicals and bread. Our fund provides them with micro-loans to scale up their production, upgrade equipment or purchase materials and supplies.
The fund is especially supportive of women and the economically distressed, ventures that promote environmental and/or community sustainability, ventures that show direct and positive impact on the ASNTB community, social entrepreneurs or cooperatives with a social mission and ventures that promote the Sharing Economy.
How It Works
Eligible Time Bank members with either a small business or worker-owned cooperatives may apply to receive a micro-loan. Loans in the amount of $500-$5,000 will be considered.
As an experiment in complimentary currency, the loan fund utilizes both federal dollars and time credits. The fund loans federal dollars to ASNTB members through the fund's financial partner, the Permaculture Credit Union, while members pay associated loan fees for processing in time credits. The payment of these fees is calculated in the time it takes the loan officers to manage the loan over the course of its life.. As loans are repaid, more funds become available for new borrowers.
Borrowers may also participate in the Local Economy Incubator, which matches Time Bank entrepreneurs with Time Bank mentors who provide business development expertise in areas such as sustainability, strategy, business plan development, branding, media and more.
Why It Works
Micro-lending programs are particularly successful because they leverage social capital. Borrowers are more likely to repay their loans when they are accountable to their community. The Arroyo Seco Network of Time Banks takes this social capital one step further by honoring a set of core values that includes reciprocity, paying it forward and a deep respect for nurturing interdependence. Participation in the Local Economy Incubator fosters even more community trust and responsibility as we invest our time, resources and belief in tomorrow’s small business owners.
Our loan fund is community-sourced, community-driven and community-managed. The loan fund administrator, peer review panelists and Incubator mentors are Time Bank volunteers who are compensated for their time in Time Credits.
We strive to offer our members meaningful opportunities to engage in their community whether as a borrower, a mentor or a supporter. We hope to see today’s borrower become tomorrow’s mentor and fund donor.
About Our Financial Partner
The Permaculture Credit Union is the first and only credit union in the United States that operates exclusively within permaculture values. By honoring care for the earth, care for people and investment in sustainability, our partner understands and is committed to supporting community-driven initiatives. By partnering with an established and federally regulated financial institution, we offer our members an opportunity to enhance their existing credit rating, making them even more viable in the mainstream economic system by offering them access to resources that might otherwise be unattainable outside of the Sharing Economy.
Eligibility
Must be an active member of the ASNTB* with either a local small business or cooperative
Must be at least 18 years of age
Must be a member in good standing at the Permaculture Credit Union by opening a share account with $50 deposited and a $5 processing fee, agreeing to their permaculture values statement and completing their New Account packet and PCU/CRLF Loan Application form (coming soon)
Must have a business license to legitimately operate within the city of Los Angeles or applicable area (if business license has not been acquired, the Local Economy Incubator will help applicants through that process)
Must complete ASECO CRLF Application which consists of: business/co-op description, statement of need, explanation/proposal for use of funds, anticipated impact of loan on borrower, business plan (if available), business goals and repayment strategy. More in-depth business plan may be required depending on the size of the request.
Funds can be used for expansion, equipment or machinery, furniture or fixtures and repairs or improvements. Funds cannot be used for operating expenses (i.e. rent, salaries, et.c) or to refinance existing debt. Funds for start up will considered on a case-by-case basis.
Depending on size of request and borrower needs, borrower may be required to participate in a professional development program through The Local Economy Incubator to receive support in the areas of business plan development, governance, strategy, sustainability, finances, legal, branding, marketing, and media from a team of community mentors
Businesses that are supportive of women and the economically distressed, ventures that promote environmental and/or community sustainability, ventures that show direct and positive impact on the ASNTB community, social entrepreneurs or cooperatives with a social mission and ventures that promote the Sharing Economy will be given priority
(*”Active” is defined by: complete ASNTB profile listing 3 services, 10 exchanges with at least three different people in the past year of membership)
Loan Terms & Requirements
Applications are accepted quarterly (Jan, Apr, Jul, Oct) and on an emergency basis
Loans are available in the amounts of $500 to $5,000
Short-term and long-term loans are available but must be paid back within 36 months. Applicants must propose a payment schedule that works for them within that time frame.
Current interest rate is set by Permaculture Credit Union at 6% fixed rate, amortized over the life of the loan
Loans must be activated within 45 days of notification
Optional 60-day grace period before repayment schedule begins
No penalty for early repayment
No federal dollar application fee, 3 Time Credits required at time of loan request to to assess, review, determine outcome and complete initial processing
Approval and terms are based on the letter submitted by the applicant, basic financial history and interview (if needed)
Approved borrowers must sit on at least (1) one Peer Review Panel
Late payment penalty is assessed in Time Credits based on the time it takes the ASECO loan manager to do outreach and triage
In the event of default (120 days past due) a repayment schedule must be set up with ASECO loan manager, unless the default is caused by dire circumstances
Borrowers may apply for additional financing if initial loan is paid off or in good standing after one year
Exit interview required to document outcomes
All applications and financial information provided as part of this loan process are confidential and not shared with outside parties, including the Permaculture Credit Union
ASECO and the Permaculture Credit Union reserve the right to deny a loan application at any time, for any reason
ASECO conducts its business with the highest moral and ethical standards - discrimination because of race, sex, color, national origin, physical or mental disability, religion, sexual orientation or age is strictly prohibited under any circumstances
The Borrowing Process
Applications are accepted quarterly (Jan, Apr, Jul, Oct) and on an emergency basis
Within 3 business days after the submission deadline, applicants will be asked to provide any further documentation needed to consider the application.
Applicants attend a 30-minute roundtable meeting with the ASTNB Peer Review Panel to receive loan determination and sign paperwork if approved.
Applicant opens account with Permaculture Credit Union
3 Ways You Can Participate: Borrow, Mentor and Support
Borrow
The Community Revolving Loan Fund is now accepting borrower applications for Quarter 2.. See below for more information on how to apply.
Mentor
The Local Economy Incubator is now vetting Time Bank business development mentors. If you’d like to offer your expertise to a Time Bank entrepreneur, submit a completed APPLICATION to
asecolocaleconomy@gmail.comSupport
The CRLF is funded through the generous support of The Metabolic Studio, a direct charitable activity of the Annenberg Foundation and matching funds from the community. Support the next Time Bank entrepreneur or worker owned co-op with your tax-deductible donation. Donate Today!
How to Apply for a Micro-Loan
The ASECO Community Revolving Loan Fund is now accepting borrower applications for Quarter 1..
Complete our application online
or by email
asecolocaleconomy@gmail.com to request the PDF.
The current DEADLINE TO APPLY is April 15, 2014.
To receive more information on how you can receive a micro-loan, participate as a mentor or donate, email CRLF Project Developer Sarah McGowan Dear at
asecolocaleconomy@gmail.comResources
Grameen America
The Mondragon Experiment Documentary
Cutting Edge Capital
Shift Change Documentary about Cooperatives
Small is Beautiful: Economics as if People and the Planet Mattered by E.F. Schumacher
E.L.F (Ecological Loan Fund)
BALLE (Business Alliance for Local Living Economies)
Economics of Happiness
California Center for Cooperative Development