Ka Wai Ola - Office of Hawaiian Affairs, Volume 28, Number 4, 1 April 2011 — Technical assistance makes Mālama Loan attainable [ARTICLE+ILLUSTRATION]

Technical assistance makes Mālama Loan attainable

ByTreenaShapiro n this eeonomie climate, it's hard for any new entrepreneur to get financing from traditional lenders. That's why Rebecca Soon of Solutions Paeihe finds the Office of Hawaiian Affairs Mālama Loan Fund so exciting. The programprovides beneficiaries an alternative source for business, home improvement and education loans, along with services, support and training for those who need help strengthening their loan applications. "The loan fund really does try to help people that couldn't get credit otherwise," Soon says. "OHA has definitely been making it a priority to support start-up businesses." While banks may shy away from lending to prospective business owners with no established track record of success, OHA's mission is to broaden access to credit for Native Hawaiians and provide mueh needed eeonomie stimulus throughout the community. The Mālama Loan program offers fiveyear, 5 percent fixed-rate loans up to $75,000 to beneficiaries who meet the qualifications. Like any lender, OHA needs confidence that borrowers ean repay their loans to keep the revolving fund viable. Loan applications are processed by First Hawaiian Bank before being sent to OHA for a decision. What sets OHA apart is that about 20 percent of the time beneficiaries who might be denied loans from traditional sources instead are referred to the OHA Mālama Loan īeehnieal Assistance Program for help strengthening their applications. Soon, the Program Manager, estimates about 70 percent of referred clients ultimately qualify for loans after receiving individualized credit counseling, hnaneial management training and other services from the technical assistance providers.

Low credit scores and high debt-to-income ratios are the most eommon reasons for referrals, says Soon. Specialists work with beneficiaries to help them understand how to remediate their credit scores, perhaps by paying down credit cards or making timely

payments on outstanding balances. Those who need to bring their debt to a manageable level might receive help in developing reasonable budgets based on their monthly ineome and expenses so they ean stop overextending their credit. "We'll try to do anything we ean to make their credit better in the long run," Soon says. "As long as they complete the requirements of the program, they'll usually get approved." Sometimes applicants just need help preparing their applications for resubmission because they've left out ineome information or requested larger loans than they actually need. "At times we have been able to decrease the loan amount and repackage it with a stronger application and more information," Soon explains. The providers follow up with clients who request ongoing assistance with their businesses or long-term credit remediation and Soon and her colleagues have seen steady improvements in most of these clients' credit scores. "For some, it has meant business expansion. For others it has meant being prepared for home ownership," she says. "For even more, it has meant that they are now able to move forward after having their credit and hnaneial history destroyed from a hnaneial crisis." Soon passed along an anecdote about a shop owner who needed financing to expand his business but kept getting turned down by banks because of old credit problems. After going through the technical assistance program, he was able to receive a loan through OHA and has been current with payments ever since. ■ Treena Shapiro, a freelance writer, is aformer reporter for the Honolulu Star-Bulletin anel Honolulu Advertiser.

Get informed Learn more about the Mālama Loan Fund and the īeehnieal Assistance Programat an application fair on April 12 at the Department of Hawaiian Home Lands in Kapolei. Registration is required, so visit www.oha loanfair.eventbrite.com, eall 851-7000 or email ohata@ pacificgatewaycenter.org to find out more. More information about OHA's Mālama Loan program is also available online at www.oha.org/malamaloan and through First Hawaiian Bank at 643-LOAN and www.fhb.com. Or, contact OHA īeehnieal Assistance Specialist Robert Crowell at (808) 594-1924 orrobertc@ oha.org.

Rebecca Soon of Solutions Pacific offers help in aftaining an OHA Mālama Loan. - Photo: laeh Villanueva