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View ProfilesPublished June 14, 2023 at 10:00 a.m.
Hannington Kasagga was an Uber driver in Burlington when he came up with an idea for a new business: a trolley tour company like the ones he'd encountered in Savannah, Ga., where he lived after emigrating from Uganda in 2018.
He pitched the concept to his friend Catherine Turyamureeba, a fellow Ugandan whom he'd met on the job, driving her to work at the Burlington Hilton, where she is the front desk manager. Turyamureeba was sold — and even convinced her sister, Barbara Asiimwe, who has a background in banking, to go in on the business.
In 2022, the three approached a Burlington bank in hopes of securing a loan but were denied. Instead, they were directed to the Vermont Community Loan Fund, a Montpelier-based alternative lender that had recently launched a pilot program aimed at providing zero- or low-interest loans of up to $40,000 to new Americans and people of color. Through that program, called the Justice Forward Fund, Kasagga and his partners were able to secure a loan large enough for a down payment on a trolley — which cost more than $200,000 — that will anchor their fledgling business, Burlington Trolley Tours.
That's just the kind of initiative the loan fund was looking to support when it started the experimental lending program in late 2021, said Jake Ide, the fund's director of investment and philanthropy. Since the Community Loan Fund was launched in 1987, it has lent more than $125 million to local businesses, nonprofits, childcare providers and developers of affordable housing. Most of the capital comes from Vermonters who put their money into fixed-maturity accounts, similar to certificates of deposit, that currently have a fixed-interest rate between 2 and 2.5 percent. At the moment, the loan fund manages a portfolio of $33 million, from approximately 460 investors.
The seeds for the Justice Forward Fund were planted in 2018, when the Community Loan Fund's staff and board were coming up with a strategic plan and identified new Americans as a group they might better serve, Ide said.
The loan fund soon began reaching out to organizations, including the Champlain Valley Office of Economic Opportunity and the Association of Africans Living in Vermont, to pinpoint gaps in access to financial services for people of color. Client surveys provided some insight.
"We found some pretty stark realities that weren't necessarily surprising but certainly were laid out very clearly for us," Ide said.
Among the findings: Five out of six Vermont entrepreneurs of color reported experiencing racism, discrimination or bias when they sought financial services. Half of the respondents said they feared being denied financial services; half said they had difficulty communicating with banking officials or loan officers about their business plans.
The loan fund also wanted to find what type of financing would be most helpful to people of color and discovered that most sought a more streamlined application process and loans in smaller dollar amounts, with no fees and low interest rates. Recognizing the wealth gap and disparities in U.S. homeownership between white people and those of color, the fund decided to waive the collateral requirement customary for most business loans.
"It was important to make this capital the cheapest, most accessible capital that the loan fund offers," Ide said.
The fund capped the Justice Forward lending program at $1 million. Interest rates would range from 0 to 3 percent, depending on the borrower's net worth. The fund secured $350,000 in philanthropic donations from two Vermont families to offset the low rates.
By April, the Justice Forward Fund had lent out the full $1 million, spread among 34 loans for businesses expected to create jobs for 62 Vermonters of color, according to Ide. Borrowers included a pet care company in Monkton, an Afghan natural market in Essex Junction and an online fashion business geared to people with disabilities in Orange. The fund's staff members are now assessing the pilot program's successes and shortcomings and plan to relaunch it this fall in permanent form.
Former Burlington School Board commissioner Aden Haji, a Somali refugee who came to Vermont as a child in 2003, used a Justice Forward Fund loan to purchase a 2023 Volkswagen Jetta to start his new business, Haji Driving Academy.
Haji, a University of Vermont graduate, said his experience working with community youth organizations revealed a big need for driving lessons in immigrant communities. During the pandemic, he took online classes through the continuing education program at Keene State College in New Hampshire to earn his credentials to teach driver's ed.
Haji learned to drive after graduating from Burlington High School, and only then by asking mentors and family members to take him out to practice. He hopes to make driver's education more equitable by tapping into the Vermont Student Assistance Corporation's Advancement Grant program, which helps Vermonters pay for training and certificate programs outside traditional college classes. He has also reached out to AALV and the Vermont Afghan Alliance about forming partnerships. He plans to launch a driving class for teens in Burlington's Old North End this summer.
Meantime, the promoters of the new trolley operation are eager to get it rolling. Last week, the shiny, dark red 33-seater — built in Wisconsin and customized to handle Vermont's wide-ranging weather conditions — arrived at the Burlington waterfront. The trolley, with a tour guide aboard, will take locals and tourists on narrated, 45-minute sightseeing trips in and around the Queen City, starting on Thursday, June 15.
Turyamureeba and Kasagga said the support they've received since unveiling their idea for the business validates their decisions to make a home in Vermont.
"It's easy to connect with people," Kasagga said. "People are willing to help."
The original print version of this article was headlined "Road to Entrepreneurship | A new lending initiative helps Vermonters of color launch and build businesses"
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