Ruth Herring has designed and sewn clothing since she was in seventh grade and she has always dreamed of turning her hobby into a business. Unfortunately, Herring had been out of work since 1995 on a disability and had very little credit so she kept getting turned down for loans from banks. She didn’t give up though, and finally got her first $1,500 loan from a non-profit organization run by Yale students known as the Elmseed Enterprise Fund. The student organization was created to help local entrepreneurs and is not formally affiliated with the school.
Herring used that $1,500 loan to buy a new sewing machine, supplies and enough fabric to start HerringBone, her own custom sewing and design business. She has since paid off that loan, and got another larger one, also from Elmseed, that she used to buy a second, higher grade sewing machine, as well as business cards and furniture for her store.
Pictured above in a gray suit of her own design, Herring rents a small storefront where she sells and creates custom clothing, all thanks to the students who form Elmseed. “This is like a dream come true,” she says standing next to her sewing machine. “A blessing.”
These types of micro loans are part of a larger trend of socially motivated financiers who give small, low-interest loans to help people, typically those in developing countries, to start their own businesses so they may support themselves. This idea of helping people with limited resources to become financially self-sufficient, is also now being applied in the U.S. to people like Herring who don’t qualify for traditional loans from banks.
Elmseed was started by four Yale students in 2001 and their funding sources come from the organization’s alumni and community donations. The loans start at 10 percent interest, but rates go down to as low as five percent for good clients, and all loans are to be repaid within a year. “For us, it’s not about profit,” says Yale student Alice Song, the group’s development director. “It’s about helping the community.”
To read more about Elmseed and Ruth Herring’s story visit the New Haven Advocate.