Latino small business owners banking on unity for empowerment

BY PAUL GRIMALDI
Journal Staff Writer

PROVIDENCE -- Visitors to Yolanda Langley's cramped shop on Broad Street are buzzed in by a clerk.

Langley greets each warmly, offering a welcome smile, a hand touching a shoulder or an easy handshake.

The 54-year-old native of the Dominican Republic wears a dark suit and the confident look of someone who's convinced she's doing the right thing.

"I decided to help my culture," she said. "The only way is you have to have a place to teach them how to eat."

A vegetarian, Langley opened Vida Sana -- Healthy Life -- in Washington Park eight years ago. She wanted to show her fellow Dominicans that their diet was too heavy with fat and fried food.

No bigger than a bedroom, the store's shelves are packed floor to ceiling with food supplements and homeopathic medicines such as bee pollen, primrose oil and shark cartilage. Each one is considered a remedy for some malady or physical shortcoming.

While Langley has been proselytizing for nearly a decade about healthful diets, she has only recently become part of another movement -- one growing among the Latino merchants doing business in and around the city.

"This is our goal . . .to teach our people how to work with the system," she said.

The merchants are pulling together, wedging a place for themselves in the state's business community at a time when Rhode Island's growing Latino population is being recognized as a potent economic force. About 9 percent of the state's population is Latino, according to the 2000 U.S. Census. By 2002, the Census Bureau found there were 3,415 Latino businesses statewide.

"They're empowering themselves politically," said Adriana I. Dawson, acting state director of the Rhode Island Small Business Development Center, a business training agency headquartered at Bryant University. "They're doing their homework -- they're always in fact-finding mode."

Five years ago, a dozen Latino business owners launched the Rhode Island Hispanic American Chamber of Commerce.

Langley has joined with Providence businessman Jose Brito, who began the Southside Merchants Association with about 20 members two years ago. The group has grown to 300 and recently changed its name to the Greater Providence Merchants Association to reflect the spread of its membership beyond the South Side.

"Just seeing the need, the everyday things, I just started talking to people," said Brito, a real estate investor with long ties to the South Side.

Brito and Tomas Avila, a real estate broker from Central Falls, quickly learned what the Latino merchants along Broad Street feared the most.

"The biggest issue was the increase in rent that was taking place on Broad Street," Avila said. "There was a fear that if the merchants didn't come together that pretty much they were going to be displaced."

Finding a way to buy the storefronts where they spend long days selling plantains or arroz con pollo (chicken with rice), CDs or cell phones, may be the key to financial stability, but the association's founders discovered that it's not the only issue with which Latino merchants must come to grips.

The association's members face a number of problems common to many small businesses around the state and the country -- a lack of business education, access to capital, government bureaucracies and affordable health care.

"Those are problems everywhere," said Craig A. Baker, executive vice president of Domestic Bank in Cranston.

Layered on those concerns are the language and cultural barriers Latinos face in a state that's only just becoming aware of their economic power.

"The average Latino merchant had no way to cut through the bureaucracy," Avila said. "What my experience has been is that, once the Latino merchants get the understanding of the way business is done here, they understand the need for even basic English."

Many members of the state's political establishment are responding to the Latinos' clamor for attention by making the Broad Street walk -- a trek up and down the street to hear firsthand the concerns of the Latino merchants. Lt. Gov. Charles J. Fogarty, U.S. Sen. Jack Reed and Mark S. Hayward, director of the U.S. Small Business Administration's Rhode Island office, are just a few who have worn down their shoe leather on Broad Street's sidewalks.

With the exception of executives from Domestic Bank, financial institutions have been slower to respond, the merchants said.

"Domestic Bank has been very accessible to the Latino community," Brito said. "It's the only bank that is willing to help."

Baker walks the walk of someone who's paying attention to Latinos.

"I like to get a feel for what's going on down there . . .you can't get things done from your boardroom, especially in a place like South Providence," he said. "Most banks are uncomfortable going into those neighborhoods."

On a recent afternoon, Baker strolled Broad Street with Brito, meeting the merchants who own the tiny bodegas, restaurants, hair salons and other shops spread out along its nearly three miles.

He listened as the merchants talked, and Brito interpreted, about failed attempts to buy the buildings where they run their businesses, priced out by increasing property values or stymied by poor accounting and uneven credit histories.

He offered business accounts and loan programs that can build credit and connections to people who can bring them business from beyond the South Side.

"You need to pay special attention to the products and services they require," Baker said of the Latino merchants. "It really starts with basic consumer products."

From those initial checking accounts come bill payments and a credit history. From the savings accounts can come money for down payments on homes. From home ownership can come commercial mortgages that stabilize businesses.

"Once you get that first [property] you can use it as collateral," said Junior Guerrero. "You have something to bargain with."

The 26-year-old is buying the Broad Street building where his girlfriend runs the Nice Style Hair Salon. He owns three other Providence buildings.

"That's a very important part, when you have a business that owns their own building they're in control of their own destiny," Baker said.

But owning a building is a long way off for many Latino businesses. Most are tiny, run by an owner or a family that puts in long hours six or seven days a week.

Average annual receipts for Rhode Island's Latino businesses, based on Census data, are only $62,582, compared with $213,218 for Asian-owned businesses and $416,940 for white-owned businesses. Only 8.7 percent of Latino businesses reported having paid employees, compared with 28 percent of Asian businesses and 27.2 percent of white-owned businesses.

Financing agencies are cobbling together microloan programs to help these businesses.

In April, the Providence Economic Development Partnership launched its own microloan program, offering applicants business loans of up to $10,000. The program aims to give small businesses and minority- or women-owned companies the money they need to grow and create jobs.

"Small business is the economic engine that drives our economy and [the] microloan program gives entrepreneurs the tools they need to start a new business or strengthen an existing business," Mayor David N. Cicilline said at the time.

The Rhode Island Coalition for Minority Investment, a nonprofit lending agency in Providence, makes microloans, ranging from $2,000 to $35,000, to people looking to start businesses or to keep them operating, but who can't obtain bank financing.

Last week, the Rhode Island Economic Development Corporation said it had set aside $500,000 in its Micro-Business Emerging Growth Fund, a pilot program intended to aid small businesses. The money is being carved out of the $4 million available through the Small Business Loan Fund Corporation, an arm of the EDC.

Businesses will be eligible for fixed-rate loans ranging from $5,000 to $50,000. The cap on the EDC loans builds from the coalition's program limit.

"This is an opportunity for EDC to step up and play a role," in helping small businesses, said Victor Barros Jr., the agency's urban development manager.

Stop Wasting Abandoned Property, the Providence affordable-housing organization, is playing a part. It wants to build a three-story multiuse building on a one-acre lot across from the Grace Church Cemetery. The building will have six to eight first-floor business units that merchants can buy, along with about 30 apartments and a half-dozen condominiums on its upper floors.

Called the Southside Gateway Project, it is seen as a key to anchoring the north end of the Broad Street commercial strip.

"If it works, it makes a win-win for everybody," said Carla Destefano, SWAP's executive director.

The business classes are falling into place as well.

The Small Business Development Center is one group offering one-on-one consulting and business seminars in Providence and elsewhere. The capital city's sessions are well attended, said Dawson, the center's acting director, and the number of participants is often capped.

Domestic Bank is drafting business professionals for a financial educational program it will offer to Latinos.

"It's a major milestone for [Latinos] when they realize there is a support network for them," Dawson said.

The new merchants association is part of that network, said Langley, the Broad Street merchant. It's her way of helping the other Latinos who are trying to grow their businesses.

"I see more progress," she said. "I have to do my part."