Microloans

From the Monday, November 26, 2007, Business section, pages B, B4, an article about an artist looking for bridge financing and being turned down by one of the big banks:

Thinking Big
VISUAL ARTIST GETS FINANCIALLY CREATIVE

Big Bank said no to his request for bridge cash, so he visited Alterna


Madhavi Acharya-Tom Yew
Business Reporter

Visual artist Jason Baerg had a development deal for his newest and most ambitious work to date and just needed some short-term bridge financing to tide him over until the pledged funding arrived.

So he approached one of the Big Five Banks in January.

"They closed the door really quick. They just said, 'No'," said Baerg, 36, who has a fine arts degree from Concordia University and has exhibited his work across Canada and sat on national art juries for the Canada Council for the Arts and Indian and Northern Affairs Canada.

The new project is called Metroscope, and he describes it as "an investigation of the psyche of the city." Among other things, it's about being an artist in an urban centre, tapping into urban subjects to engage an urban audience.

It would involved a documentary, as well as billboard-size art pieces and eventually, an Internet site that would let users make their own contributions to his work.

Baerg had firm financial commitments for the project from Aboriginal Peoples Television Network (APTN), SunTV and the National Film Board of Canada. The bridge financing was meant to help him get started, develop his ideas and hire a crew.

When the bank turned him away, Baerg went to Alterna Savings.

Susan Henry, manager of community economic development, saw Baerg The Artist. But she also saw The Entrepreneur.

She liked that he had formal education, but that wasn't all.

"He had really thought out everything in terms of what he wants, how he's going to use the financing, how he's going to pay it back. I found him to be very detailed and organized."

Henry knows that helping artists with their business plans can be a challenge, particularly when it comes to film projects. "Projects not finishing when they're supposed to can pose a big problem to your cash flow. Also, you may budget a certain amount and it may go over, or the documentary you've made may not get picked up by a distributor."

The best thing Baerg had going for him that he already had financing commitments from two broadcasters and the National Film Board. Baerg got a microloan for $5,000. He paid it back one month later and got another loan for $10,000.

Henry also saw Baerg juggling different projects, with different timelines, so she helped him fine-tune his focus and set priorities. It became a vision for what his business would look like next year and the year after that.

"It was a way to set goals. She said, if you're going to be making this feature length documentary in the spring, you need to be here financially," Baerg said.

"A small loan equalled a lot of extra support."

Baerg, who was born in Sarnia, was raised in Prince Albert, Sask. He returned to Ontario at 15. By then, he knew that he wanted to be an artist.

After getting a degree from Concordia, he completed a graduate studies program in new digital media at George Brown College.

Baerg then moved to New York City, working as "interactive architect" as it was called then. He helped develop websites for the growing armies of companies that were interested in establishing their businesses online.

"It was a really amazing, exciting time," Baerg said. "Then Sept. 11 happened." Baerg re-evaluated, and decided to return to Canada.

"The New York landscape is really different when you're not born and raised there. They have no idea what the Banff Centre for the Arts is; they don't understand the significance of the Canada Council of the Arts," he said.

"Back in Canada, I was much more established. I really came back to leverage my own ideas." Baerg, who is part Cree Metis, earns money writing for the Centre for Indigenous Theatre. He also applies for his own grants. These funds help sustain him while he's creating the artwork that he may later sell to a collector.

"It's all in starts and stops," he said. "Sometimes you're pursuing an art project and then a big grant comes in. And if you're writing grants for an organization, you can get a pay cheque from them for doing that."

Thought Baerg is an artist, his financial struggles are much the same as any entrepreneur just starting out. When he was a student in Montreal, he worked as a bartender to make money to develop his art. When he first returned form New York, he did construction jobs.

"I really believe that it doesn't matter what business you're in a restaurant or fine art business," Baergsaid. "You need to invest everything you've got, financially as well as in your sweat equity."

Getting the financial side of his business under control allows Baerg to focus on what he loves.

"If I were to be strategic and if the bottom line was dollars today, I probably could produce a work that would be extremely commercial. But I'm much more interested in innovation and pushing the boundaries of media," Baerg said.

"My bottom line currently is not just about the green. It's about what do you really want to do, what do you really want to say."

Alterna Savings Q&A

Since 2000, Alterna Savings has given out more than 400 loans totaling nearly $1.5 million.

Q: What is a microloan?
A. A business loan that's less than what a traditional financial institution would typically offer, for entrepreneurs who would not otherwise qualify.

Q. How much is it for?
A. It's a loan ranging from $1,000 to $5,000 for start-ups, to a maximum of $15,000 for more established businesses.

Q. What's the interest rate on a microloan and who can apply?
A. The standard rate is prime plus 6 per cent. Alterna Savings' program is geared to low income, self-employed people with small business start-ups that have been operating for between one and five years.

Q. What qualifications are needed?
A. Alterna Savings prefers its new applicants to be graduates of a recognized small business training program, such as those offered by the YMCA, Toronto Business Development Centre, or Centennial College of Entrepreneurship.