On the road to independence

WASHINGTON -- Imagine getting to work in the suburbs, or picking up your children from child care before the agency starts charging late fees by the minute, or just getting groceries -- all without a car.

WASHINGTON -- Imagine getting to work in the suburbs, or picking up your children from child care before the agency starts charging late fees by the minute, or just getting groceries -- all without a car.

Now imagine buying a car while supporting a family of four on an income of no more than $40,000 a year or taking out a loan with 30 percent interest.

Sophia Goulbourne, a 26-year-old mother of two who lives in Leesburg, Va., and works at a mall in Fairfax County, knows what it's like to have no car and no means of buying one. But two years ago, she discovered a car-buying program through an Oakton, Va.-based nonprofit organization that has helped her and her family move closer to financial independence.

"I could not do it on my own," said Goulbourne, who plans to pay off her $4,000 loan on a used 1997 Infiniti this month, along with a smaller, more recent loan that paid for a major repair. "I didn't have the money; they gave me the money."

Northern Virginia Family Service has been participating since 1989 in a national Ways to Work program that guarantees small loans to low-income families. Many of those clients are single parents. Many have shaky credit records. Most of the loans are used to purchase cars.


The nonprofit group, in partnership with Virginia Commerce Bank, helps arrange and co-sign two-year loans of as much as $4,000 with interest rates of no more than 8 percent that allow these clients to buy cars and build good credit ratings. The group also offers classes to teach clients about managing their household finances.

In fact, the national organization behind the program said that while providing low-income families with private transportation is important in the suburban age, the greatest benefit of the program may be the rehabilitation of its clients' credit.

"Initially, it's all about the mobility," said Jeff Faulkner, president of Milwaukee-based Ways to Work. "Ultimately, it's all about the loan."

For example, while studies show that the purchase of a car enhances a poor family's income, cleaning up a person's credit history also can have a direct, long-term impact on job prospects. That's because many employers now conduct credit checks on job applicants as part of the vetting process, Faulkner said.

"It becomes determinative of your employment," he said.

Teaching clients how to handle their finances and rebuilding their credit ratings with small loans also provides a practical way of allowing them to return to the commercial lending markets as savvy consumers who can improve their lives.

Faulkner said he likes to view the program as an American version of the "micro-loans" pioneered for people in the Third World by Nobel Peace Prize recipient Muhammad Yunus' Grameen Bank. That program began 40 years ago with $27 loans tofurniture-makers in Bangladesh.

Ways to Work originated in Minneapolis in 1984 as a loan program backed by the McKnight Foundation, a philanthropic organization in Minnesota.



Goulbourne said she had encountered the Catch-22 familiar to many low-income families: She needed a car for work, but she needed a better job to be able to afford a car.

"I couldn't afford to go to work and pay for day care," she said.

Before buying her first car, Goulbourne had relied on a subsidized taxi service that shuttled low-income clients to their workplaces. Occasionally, however, the taxi arrived late and Goulbourne was slapped with $10-a-minute late fees at her children's county-run child care, she said.

Things changed when Goulbourne bought a used Infiniti with 120,000 miles on it with the loan she took out two years ago. She now works as an assistant manager at a formal-wear store in the Dulles Town Center mall, a step up from working as a sales clerk at an outlet in Leesburg.

Buying the car made the advance possible because she could put in more hours, which led to a promotion. That led to a new job, and then a second used car for her husband Musa, 29, who works in a Wal-Mart in Leesburg. And now, with the cars, she is on time more often, allowing her to avoid those steep child-care fees.

A few months ago, Goulbourne had to take out an $800 loan to pay for repairs to the car. But she hopes to pay that off, and the remaining balance on her car, with money she expects to receive from an income-tax refund.

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