Washington Cash

A Brief History of Washington CASH

Mission & History
Founded in 1995, Washington Community Alliance for Self-Help (CASH) is a microenterprise development organization that provides low-income women, people with disabilities, and other underserved individuals access to capital and business development training.

Potential clients at January 2006 orientation vie for 30 spots in Washington CASH’s winter business training class

Potential clients at January 2006 orientation vie for 30 spots in Washington CASH’s winter business training.

While other organizations provide microfinance in the Puget Sound region, Washington CASH is uniquely focused on those entrepreneurs who are most disenfranchised. The award-winning Washington CASH program helps participants create successful, sustainable businesses, and offers exceptional peer business group and mentor support that produces tangible results -- 75% of our clients have experienced an increase in household income, and 56% report a significant increase in business revenue, after working with Washington CASH.

Washington CASH is the only microcredit program in the state using the proven peer lending model. The cornerstone of the Washington CASH experience, peer lending allows participating entrepreneurs the ultimate decision-making power regarding the readiness of their loan group members to receive funding. This peer accountability reinforces our client’s obligations to grow their businesses and keep loan payments current, and also encourages members to support and learn from each other. Since other group members cannot apply for new loans unless all loans within the group are up to date, members must motivate and empower each other, thus ensuring the success of both the individuals as well as the group.

Since 1995, 1,280 low-income people have completed Washington CASH’s business training courses, 623 businesses have been started or expanded, and 295 loans have been made, totaling more than $624,000. In 2005 alone, 336 clients benefited from our free business development training in three counties, 1,822 received free business consultations, and 23 took out business loans totaling more than $48,000.

DESCRIPTION OF NEED
Many women in today’s labor market are forced to accept low-wage, unstable, and demanding jobs that fail to provide a sustainable living for them and their families. When they do seek a loan to start their own business and escape this cycle of poverty, they are routinely rejected by banks because of poor or no credit history, incomplete education, or lack of collateral. However, through expert training and access to capital provided by Washington CASH, these same women can become successful business owners, employers, and role models for their families and communities. A vast array of small business owners – from childcare providers to web site developers to personal chefs – have been educated, coached, and launched into entrepreneurship at Washington CASH.

This success is even more impressive when one considers the economic and social challenges faced by our clients. For instance, 49% of our clients have incomes below the federal poverty level ($18,850 for a family of four) and nearly all are at or below 200% of the poverty level. The average household income of our clients is $21,995 (some with multiple dependents), and 28% have a household income below $10,000. Additionally, 57% of all Washington CASH clients are members of a racial minority and 81% are women.

Kristi Brown of That Brown Girl Catering

Kristi Brown, a client since 2001, is a prime example of the effectiveness of Washington CASH’s programs. When Kristi came to Washington CASH, she was unemployed, slipping into poverty, and unsure about how to parlay her talent for cooking into a small business that would support herself and her family. After completing Washington CASH’s nine-session business training course, she joined a business group and launched her enterprise, That Brown Girl Catering, with her first loan of $500. She then attended technical assistance workshops, met with her volunteer mentor multiple times, started an Individual Development Account (IDA), and took out subsequent loans, which she used to purchase catering equipment and hire a bookkeeper. Today, Kristi’s business is thriving and her revenue has doubled in just three years. In May 2005, she and her business were even featured in the Puget Sound Business Journal. And hers is just one of many Washington CASH success stories.

Program Details
Washington CASH’s year-round program includes three interwoven phases. The program is offered at no cost to clients, but only those with incomes less than 200% of the federal poverty line are qualified to enroll.

Phase One -- Readiness and Feasibility: As the entry point into Washington CASH, the nine-session business training course introduces clients to the fundamental practices of successful business operation, including market research and marketing plans, cash flow statements, record-keeping skills, and feasibility assessments. Clients take away practical skills such as forecasting, budgeting, and completing a business plan. Since 72% of participants have never owned a business before, phase one is a crucial step that sets them up to succeed.

Phase Two -- Access to Capital: After completing the nine-session business training course, clients can then join biweekly business groups and apply for microloans to develop their businesses. Loans begin at $500 then increase to $1,000, then $2,500, and onward up to $5,000, and can be used for any business purpose, such as purchasing equipment, launching an e-commerce web site, advertising, or signage, to name a few. It is during this phase that Washington CASH matches clients with successful entrepreneurs and community businesspeople that serve as mentors to help clients get off to a strong start and avoid the problems that often plague fledgling businesses.

Phase Three -- Growth: Once their businesses are up and running, clients have ongoing access to the staff at Washington CASH who can provide individual and group technical assistance, help with revising business plans, tutorials on basic and advanced computer skills, additional financial planning, literacy training, advice on sales strategies, bookkeeping tips, and more. At this time clients also have the opportunity to open Individual Development Accounts (IDAs). Offered in collaboration with United Way of King County, these savings accounts are matched two-to-one through federal funding. In addition, entrepreneurs have access to Washington CASH’s state-of-the-art, free computer resource center, which is open 46 hours per week, along with assistance from a computer expert who is available one full day per week to answer specific questions.