The news is full of stories of small companies in trouble because their access to credit has been cut off
Houston, TX (PRWEB) December 29, 2008
Dittmar Associates, a small, woman-owned company specializing in aerospace and high-tech sectors, recently celebrated winning a $1.2 M contract - the largest in the company's 5-year history. But there was a catch. Banks wanted access to all the money up front in order to advance the company a loan to cover up front costs.
"Our bank has great folks working for it," said Mary Lynne Dittmar, President of Dittmar Associates. "But if we had the money upfront, we wouldn't need the loan to begin with."
"During a time when the financial industry is getting huge windfalls in government bailouts, the average person is still paying the banks anywhere from 7% to 15% interest on credit cards," she continued. "Small business is in the same boat; either credit is too expensive, or entrepreneurs can't get loans for basic items like supplies or payroll. We decided to take a different path."
The path the company took was to reach out to its audience - the hip, technically-literate community found on social sites such as Facebook and on the microblogging service Twitter (twitter.com).
"We decided that we'd rather offer the benefits of participating in the growth of a small company directly to our customer base - the high-tech sector - by setting up our own micro-loan program," Dittmar said. "Basically, we put out a call via Twitter to help out the company by loaning it money. We'll give the same rate of return the banks wanted to charge us in interest - more than twice what you can get for your money elsewhere - and without the volatility of the stock market."
The approach is based upon contracts Dittmar Associates already has in hand, so the company has guaranteed revenues. The contracts themselves have termination clauses that assure the company will be reimbursed for all of its costs - so basically, the micro-loan program is as low a risk as can be found anywhere.
Dittmar Associates has a history of involvement with other organizations supporting poverty relief, environmental conservation, and sustainable economic development. As a result, the company is well aware that many people might want to get involved but don't have much to give. In addition, some people are frankly skeptical that a business in aerospace needs the money at all and would rather put it into charity, particularly at this time of year.
Their answer? Encourage loans as small as $25.00 - and pass on the benefits by investing a portion of the total loan amount into MicroPlace - a not-for-profit organization dedicated to providing micro-loans for poverty relief around the world.
"The news is full of stories of small companies in trouble because their access to credit has been cut off," said Dittmar. "We thought we'd try to turn our own challenge into an opportunity for ourselves, for those who decide to participate, and for others who need help. It's my favorite scenario - a 'win-win'".
Dittmar got the news about her loan on Christmas Eve, and a couple of her friends have teased her about the similarities between her circumstances and those of George Bailey from "It's a Wonderful Life", the Frank Capra film that surfaces every holiday season. In the film the Baileys help out their town with loans for years before running into financial trouble. In the end, the townspeople rally around them, donating nickels, dimes and dollars to Bailey's Savings & Loan, and helping themselves in the process.
"I'm not sure I'm quite the saint that Jimmy Stewart was," she said, smiling ruefully. "But we have tried to run a company with a corporate soul, much like the Baileys did. And who knows? Maybe with the help of Twitter and some good people we can help ourselves, and help some other folks along the way."
Dittmar will provide regular updates on fundraising via her Twitter account. Use "follow dittmarml" to check out their progress at Twitter.