Microloan program helps Nogales-based small businesses

According to the U.S. Small Business Administration, Arizona is home to around 400,000 small businesses, and nearly half of the state’s entire workforce falls under the small business banner. While this is great news for people looking to start their own business or to expand one, there’s always one thing that gets in the way: resources, specifically money.

But in Nogales, a budding small business landing spot for grassroots entrepreneurs, a new low-interest microloan program is helping cover some of the financial burden that small business owners face when trying to get their operation off the ground. Provided by the Nogales Community Development and Zonta Club of Nogales—part of the international organization that works to empower women in business, education and human rights—the microloan program is helping Southern Arizona women gain economic stability with relatively small, but impactful loans.

And beyond providing just the funding, the program also helps women with homegrown businesses build credit and earn required certifications.

When someone takes out a loan through the Zonta and NCD program and repays it, the money automatically goes back into the loan fund, which can then be lent back out. For Nils Urman, executive director of Nogales Community Development, it’s all about helping to build out a strong small business community through support and educational efforts.

“We take everyone through this process and provide training and workshops to get them set up. It’s a perspective shift,” Urman said.

The loans that Zonta gives out range between $500 to $2,000 with a two-percent interest rate and can be paid back in either 24 or 36 months. NCD takes it a step further and provides larger loans, ranging between $10,000 and $75,000. Applicants for the loans have to be women who reside in Santa Cruz County who are at least 18 years old. The rules and policies are directed by Nogales Community Development, which also provides counseling to help small business owners understand which type of loan is the best fit for them.

The microloan program acts more like a financial education program than just a straightforward loan, offering up free courses that can help entrepreneurs grow and get connected with each other.

“A lot of the smaller companies had nowhere to borrow the money and were being directed toward taking out credit cards. We recognized there was a gap in the market,” adds Urman.

The Nogales area has earned recent recognition for its entrepreneurial atmosphere, including its efforts to boost business and financial awareness amongst the city’s youth. Last fall, students from Nogales High School participated in a program with the singular goal of becoming leaders in entrepreneurship through Startup Unidos Youth, an annual program that’s set to serve more than 1,000 local youth in the next five years.

“It’s about encouraging people to develop a supportive ecosystem that engages entrepreneurs to start things. I think it has the potential to be more robust as the talent starts to come in,” Urman said.