PULSE LOANS WOMEN-OWNED BUSINESSES
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By Damon dim Most banks only lend upto 80 percent of the
Morris Newsservice appraised market value of die home minus die
mortgage balance. But die newest, and most
AUGUSTA- t controversial type of home equity loan, sorhe-
N Q P equity ' times called >"no equity" loans, allows the con-
in your home can, depending on how sumer to borrow up to. 125 percent of f his
wefl you manage your money, be one of homes value
the smatesf things you've ever done. "As far as those are concerned, I wouldn't
It also can be your wqm nightmare. .' even touch those." AshlejrsakL "What tf some-
If youtelto Martinez resident Wane Hahn, thing happenedandyou had to getridof the
who'stoiogaboBK equity loan to pay for home house? You could actually be in a negative equi-
improvements, you'll find yourself saving bun*" ty situation and have to buy your way out* ...;
dreds of dollars a year with tax-deductible For example selling at120,000 house sad-
interest payments. dled with $140,000 in debt would require the
. But if you're one of those seeing Betty Ashley owne* to come up with the lender's $20,000 bal-
of Consumer Credit Counseling Services of anctnSs well as real estate agent commissions
Augusta, youVe likely overspent, areiup to your: and closing costs. And if you plan to keep the
neck in mortgage debt and in danger of losing home, tapping out all the equity also prevents
yourhome. " . • you from refinancing the home to take-advan-
"Wfe have a lot of people who come through ..... tage of falling interest rates.
here with home equity loans," she said. "The . While it's true the interest rates on equity
reason is, it dkmt work out for them." loans tend to bejower and are tax-deductible, a
The equity loans let homeownerr borrow homeowner using home equity credit could be
money against the part of their home* value paying for the car for 10 to 15 years, long after
above the first mortgage. . exhausting its usefulness.
Most loans come in two forms: the tradition- . v?And about 95 perptniof homeownen with'
al second mortgage, a closed-ended, lump sum equity loans said they were aware of me possi-
loan with fixed, monthly payments; and the bility of foreclosure or other legal actions if they
equity line of credit, a revolving ^account that missed payments, according to the American
can be accessedin varying amounts as needed. Financial Services Association study.
Bankets created home equity credit-line loans Fully aware of the pitfalls. Hahn decided she
after, federal tax law changes in the 1980s HoWun/Mofris Nevrt i*r\<t
would spend only about $8,000 on her $20,000
removed the deductibOity of interest paid on line of credit, just enough to pay for two badly
credit cards and car loans. Diane Hahn used her home equity loan to Install the new carpeting she's relaxing on. needed new air-conditioning units and new
Consumers have flocked to the loans in wall-to-wall carpet
recerg years—more than 9 minion homedwn- no restrictions on what they can use it for," said erode a homeowner's built-up equity, but can The Regions Bank customer service rep said
ershttve them, a 28 percent increase since 1988, Alan George, president of People's Community cause him to owe more than the home is worth. her amortization schedule is three years but
according to die American Financial Services Bank. A business owner using one could find a failing that she plans to pay it off in less time.
Association. . Others, however, establish a home equity line business could cost him his home as well .; And because the interest is tax-deductible
-. Most use home equity money to_pay for the to use only as a safety net "If you buy a car with a home equity line of she believes she is saving money in the long run
things they used to finance with credit cards or "Some people will just have it there in case, as credit and you can't pay for it, they're not going by not tapping her savings.
vehicle loans. a safety precaution," said Gene Wilson, a vice to come and take the car—they're going to take "I would have lost the interest on the money
"Iris a consumer product It's not something president with Wachovia Bank in Augusta. your house," said Karen Stinson, a certified tax I took out" she said. "And I don't know if I would
that sfset up to use for a business, but there are But used unwisely, die loans not only can planner in Augusta. have paid myself back."
Knlght-Ridder Newspapers Number of women-owned businesses skyrockets pened to me," she said. "If someone is
laid off, they should never think of it
as the end of the world. It was the best
KANSAS OTC M a thing that happened to my career."
that trend is. expected to continue Thenumber of women firms, those with fewer than 20 Georgia L Clark also had to make
hen doctors could not
diagnose Judy Hohn's during the next decade. employees, and especially the small- an Important choice. She was living
aches and pains, she start* The number of women business business owners skyrock- est with up to four employees, will be in Texas and supporting her 8-year-
ed getting massages. owners skyrocketed from 402,200 in the major sources of employment In old daughter when BranifT Airlines
The experience not only eliminat- 1972 to nearly 8 million in 1997, eted from 402,200 in the 21st century. went out of business.
ed the pain, it sparked her interest in according- to the . Najipfcal. 1972 to nearly 8 million in The fastest-growing sectors of ... Clark returned to Kansas City and
day spas as a way to reduce health- Foundation for Women Business small-business dominated industries in 1981 launched Communications
care costs. Owners. By 2000, women are expect- 1997, according to the include restaurants, physician Publishing Group.
After five years of research, Hohn ed to own 40 to 50 percent of the offices, computer and data process* "1 knew exactly what I wanted to
left a successful career In benefits and companies. National Foundation for•<-. g services, child care providers, do, I just didn't have any clients," she
opened Serenity the Rejuvenating Several factors have contributed to Women Business Owners. medical and dental laboratories and said.
special trade contractors. Today, the full-service public rela-
Day Spa in Overland Park. this dramatic increase in the number
"I had always had it in the back of of women entrepreneurs, including Like many others, Emine Griffith tions, marketing and publishing firm
my mind that I would one day own a downsizing, the glass ceiling and a leave corporate America to launch didn't set out to becorne a business has 12 employee* and, among other
business," said Hohn. who in 1997 strong economy. New technologies, their own businesses. owner. In 1986, she was laid off from things, produces four national maga-
was honored as the Entrepreneur of such as the Internet, video confer- The administration expects that her job at a large advertising compa- zines and a local ona
the Year by the Women's Chamber of ences and fax machines, also have despite barriers to small-firm growth ny. . - . " » • tn 1993, Clark also established the
Commerce of Greater Kansas City. made it easier for people to launch in the next century, small businesses She expected to relocate but part- ' Eagle Awards to recognize unknown
Hohn* experience is not unusual. home-based businesses. and entrepreneurship will continue ed getting free-lance projects la>d but rising leaders among African-
During the past decade and a half, The Small Business to grow and make significant contri- within a few months had gotten so Americans and Hispanics.
the number of women-owned busi- Administration expects this trend to butions in terms of job creation, much work that she launched her "1 like the challenge, and I know
nesses has been growing twice the continue into the 21st century, espe- innovation and empowerment. own company, Emme Inc. that I own what I earn," she said. "It's
rate of male-owned businesses. And dalry as more highly trained women Research indicates that smaller "It was the best thing that hap- Sip [o me to rnake the difference."
• • • • Momlngtfowfca Sunday, January if~-iO0Q - 150