Agencies' loans give shop a 'new do'

Jacqueline Hamilton has just expanded her 10-year-old wig-making and styling business from her duplex to a modest, two-story building at 2019 Lowry Av. N., a block away from her North Side home.

To industrial titans, this might not seem like a huge deal.

To Hamilton, 34, who grew up poor and is the first in her family to own a home or business -- it's a gigantic deal.

And this is a good thing for our town.

"Now we can have a big banner across this business," Hamilton said the other day as she readied the store with sister Shawna, a partner in Hamilton's JBS Hair and All-Wigs.com. "It feels good to grow."

This is a welcome but risky stretch for an entrepreneur thin on capital. But nothing has come easy for the enterprising Hamilton. She dropped out of school to help her sickly mother raise younger siblings after her father left their since-demolished public housing project. Hamilton, who still cares for her mom, eventually earned her high school diploma. She also is a real estate agent. She quit a building-cleaning business 11 years ago to pursue her avocation of wig making. Many of her customers are cancer patients.

"Over the years there was sacrifice and some tears," Hamilton said. "There were weeks where if I had $100, my sister and I didn't know whether to buy groceries or more hair. So we'd spend $60 on hair for the business and $40 on food. We were walking in the dark. I had to use my credit card to support the business. Now we use the money that's coming in."

Hamilton's reputation for enterprise, elbow grease and thrift persuaded lenders last month to make her a mortgage to buy the building, which also houses a women's clothing boutique and a second-floor apartment.

After being rejected by several bankers from whom she initially sought a commercial mortgage, Hamilton was directed to the Minneapolis Consortium of Community Developers, which specializes in assessing and advising tiny businesses.

Rob Smolund, an analyst with the nonprofit business-development agency, liked the building, and believed that being paired with the clothing store would complement the wig business. He helped Hamilton with a business plan that envisions doubling the business to $100,000 in sales annually within a few years.

Most sales of the wigs, which range from $9.99 for inexpensive synthetics to $300 for handmade pieces from real hair, are made with credit cards. Hamilton and her sisters have a buoyant style and gracious touch that generates referrals from dozens of female customers coping with cancer and hair loss. Others just want a different look once in a while.

"Jacqueline has been in business for 10 years and she is a committed entrepreneur and is committed to her community," Smolund said. "This move from her home to a larger space should increase her traffic flow, and she should be able to carry more products. Also, she's just a pleasure. She's open to consultation. She's hard-working and eager to learn."

Hamilton put down 10 percent cash on the $205,000 building. Franklin Bank loaned $102,500. And the Minneapolis Community Planning and Economic Development agency loaned $82,500 at a below-market rate of 6.9 percent from a capital-acquisition fund targeted at small operators in low-income neighborhoods who are not yet fully bankable.

Although there have been some late payments on the 87 loans made through the program, the city has not lost a dime, said Greg Davidson, a onetime Wells Fargo lender who is a senior economic development specialist with the city development agency.

After the borrowers prove their creditworthiness, most of the city-assisted loans are pooled and sold to institutional investors through the Minneapolis-based Community Reinvestment Fund, a national broker of community-development loans. The process quickly raises fresh funds for more retail loans.

Hamilton also is the embodiment of a city goal to increase the commercial vitality of the North Side, which has lagged behind the dramatic renaissance of E. Lake Street and E. Franklin Avenue on the South Side.

One reason: The North Side lacks some of the big corporate partners that the South Side enjoys, such as Allina Hospitals and Wells Fargo Mortgage. Both have built operations on the near South Side, feeding employment and aiding the growth of immigrant entrepreneurs around their corporate campuses.

But any part of town could use 100 more like Hamilton. She's a school volunteer and youth mentor and as hard-working a businesswoman as her advisers ever have seen.

"I make wigs, adjust them, cut the bangs, wash them and reset them for our customers," Hamilton said. "The majority of my business is by referral. We take our time and provide good service. We have walk-in traffic and also have orders as far away as Alaska, Germany and Switzerland, thanks to our website, All-wigs.com. That's about 15 percent of our business," she said.

"I'd like to make this a bigger business that employs more people. And maybe one day we'll also be in south Minneapolis."

Neal St. Anthony • 612-673-7144 • nstanthony@startribune.com