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Thanks to EDLF, Toby Sanders was able to expand the inventory at his video rental store, Movies We Like, in TAP's Decatur Cluster. (Photo: Eric Dortch)

Lack of access to capital is one of the most pressing problems owners of small businesses face. The Atlanta Project (TAP) and its corporate partners have teamed up to help solve that problem with a new initiative that provides low-interest loans and business assistance to minority entrepreneurs.

Launched last spring, the Entrepreneurial Development Loan Fund (EDLF) is a collaborative effort of TAP, the Atlanta Chamber of Commerce, the Greater Atlanta Small Business Project (GRASP), and six financial institutions--Bank South, First Union, NationsBank, SouthTrust, Wachovia Bank, and Trust Co.

The five-year, $11.5 million fund is managed by GRASP and controlled by the six lenders through the Atlanta Business Community Development Corporation.

In its first six months, the EDLF approved more than $1.6 million in loans for 26 start-up and existing businesses in the Brown, Central DeKalb, Decatur, Grady, and Harper clusters.

For Toby Sanders, who was trying to make a go of an independent video rental business in a small neighborhood, the $40,000 line of credit through EDLF impacted his store's growth in a number of ways. "For starters, I was able to take some of the money to expand my inventory of tapes and become more competitive with the major chains," Mr. Sanders said. "I then had monies freed up to start a cart business at a local mall, which in turn, advertised the video store to shoppers."

EDLF makes loans of $25,000 to $100,000, with terms of up to five years and interest rates that are competitive with bank rates--approximately 2 to 4 percent above prime. The money may be used for working capital, inventory, supplies, furniture, fixtures, machinery, or equipment.

"We're trying to make a difference in the clusters by providing minority entrepreneurs with a point of entry into the marketplace," said Jim Harris, director of the Micro Loans Program at GRASP. "We especially want to help those entrepreneurs whose businesses may be considered too new or too risky."