Small Business Skips Bank Loan For Community Investment

Comfort Cafe in Hastings-On-Hudson, NY wanted to expand, but couldn't get a loan in the credit crisis. The owner got creative, and raised the money he needed by selling discount cards to loyal regulars.

"Granted, this is a small town. Pretty much everybody goes to Comfort - the only restaurant of its kind on the small strip - and we all have a stake in its success. Any extension of Comfort would bring more activity, vitality, and commerce to a tiny downtown (commercially devastated in the 1970s by the chain stores and strip malls of automobile-friendly Central Avenue).

So Halko [the owner]'s idea is to sell VIP cards. For every dollar a customer spends on a card, they receive the equivalent of $1.20 worth of credit at either restaurant. If I buy a thousand dollar card, I get twelve hundred dollars worth of food: a 20% rate of return on the investment of dollars. Halko gets the cash infusion he needs to build the new restaurant - and since he's paying for it in 20% tab adjustments, it just comes out of profits. He gets the money a lot cheaper than if he were borrowing it from the bank, paying back in cash over time. Meanwhile, customers get more food for less money.

But wait, there's more: the entire scheme refocuses a community's energy and cash on itself. Because our money goes further at our own restaurant than a restaurant somewhere else, we are biased towards eating locally."

Full Story: Comfort Dollars

Comments

Build Your Own Paper Block City

Urban Fold is an all-inclusive kit that allows anyone to build the city of their dreams with a few simple folds.
$24.95
building block set

NEW! Build the world you want to see

Irresistible block set for adults when placed on a coffee table or desk, and great fun for kids.
$25
AICP CTP Storefont Display

The first online AICP* CTP exam prep class

Are you ready to take the AICP* Certified Transportation Planner exam?
Priced at $245 for May exam!

City Coasters

Hand-drawn engraved maps of your favorite neighborhoods are divided up across 4 coasters making each one unique.
$36.00