Entrepreneur slams city officials after loan falls through

Entrepreneur slams city officials after loan falls through

'Microloan' program called off for at least four months

PAWTUCKET - Everything was going great for Jeannette Garcia, as she says a fledgling city "microloan" program was all but guaranteeing her the capital she needed to get her health and wellness business off the ground within days.

City officials made many promises, said Garcia, taking her through each step of a lengthy process of obtaining a $10,000 loan to invest in start-up costs. That $10,000 would then be leveraged to get another $5,000 line of credit, she said, and her business would be off and running.

Being able to finally show a steady income after two years without steady employment would also allow her to finally be able to remortgage on her Pawtucket home.

But last week, after months of following every procedural step asked of her, said Garcia, the wheels fell off.

Last Thursday, Garcia heard from Herb Weiss, the city's economic and cultural affairs officer. Weiss, who works out of the city's Planning and Redevelopment Department, informed her that the loan program, which had been in process for months, was being nixed for at least the next four months as it is reviewed.

"Where do I go from here?" she asked. "Where am I going to get this funding?"

Weiss could not be reached for comment.

Watch Garcia explain her situation:

Garcia, who had spent weeks building out her plans for Inspire Health and Fitness, a holistic wellness center at 245 York Ave., was stunned. The money she had counted on from the city, as well as the $5,000 line of credit and the chance to remortgage and regain control of her life, were gone in an instant.

According to Garcia, she was told that she did everything right, following each step of the process to getting a loan as instructed. It was city officials who initially approached her about the program, said Garcia, telling her it was "exactly what you need."

"I jumped through every hoop I needed to go through," said Garcia last Thursday. "Then today they say no."

According to Garcia, Weiss and others told her all she needed to do was make sure her "I's" were dotted and her "T's" crossed, and everything else would work out.

Barney Heath, Pawtucket's director of Planning and Redevelopment, told The Breeze that there were never any guarantees offered to Garcia by members of the Pawtucket Business Development Corporation that was considering the loan application, despite what she might have been led to believe.

Heath said that representatives for the PBDC, on which he sits as secretary/treasurer, "felt that the business plan" from Garcia "was lacking a little bit, and needed some more work on it."

There has been an increasing reluctance on the part of the 28-member PBDC board for "risky loans," he said, and members ultimately decided that Garcia's application represented a risky business venture.

As a result of Garcia's failed loan, officials from the nonprofit quasi-city PBDC, as well as the separate Pawtucket Redevelopment Agency, are now "relooking" at the microloan program "to see if we can tweak it" and get the "kinks" out.

Because the new microloan program uses federal dollars, said Heath, the same requirements as a loan for $100,000 from the PBDC applied to a $10,000 loan. Even though the loan is so small, he said, a collateral and a co-signer are both required, he said, and Garcia was unable to fulfill the requirements.

Heath said he understands why Garcia is so angry, which is part of the reason the "entire program" is now being re-evaluated to see why it's had so little success in its first few months.

"The hurdles we've set may not be the right hurdles," he said.

Garcia said she was "beyond" angry about the situation, saying that officials courted her strongly and then treated her life and livelihood like it was "nothing" to them.

Heath defended Weiss against criticism that he might have been too positive about Garcia's prospects of receiving the loan, saying that it is the job of Weiss and others in such positions "to bring business into the city." Some business prospects fail, he said, but there are way more "success stories."

If her business was so risky, said the veteran fitness instructor, then why was she told that it was "perfect" for what the city was trying to do when it started the microloan program earlier this year? Why did officials go "out of their way" to pursue her?

According to Garcia, she was told that there were three other businesses that also applied for microloans but were also rejected. Heath said he was unaware of any other businesses that were under consideration for a loan from the PBDC.

Garcia, who is active in numerous city activities, including the Pawtucket Arts Festival, took exception to officials' issues with her 30-page business plan. According to the business owner, the consultant that city officials offered to help her through the loan process, Urban Ventures, rewrote her entire business plan to turn the holistic health and wellness practice into a "ladies fitness club."

"This isn't just for women," she said. "And this is not a gym."

Garcia said she now cannot afford many of the pieces of equipment she was planning to buy as soon as her loan came through, including a commercial juicer, and has sent those who were helping her get the business up and running home. She already received three months of free rent as she built out the space, and has "no idea" what will happen next.