The first of two parts

When Emily Flores and Angel Ortiz Campos formed Quesitos Texidor Caterers four years ago, she knew sales and marketing, and he knew quesitos. Ortiz had made the cheese-filled pastries in Puerto Rico for years as a bakery employee. In 1994, he began turning out fruit, meat, vegetable, and seafood versions, as well as the traditional cheese, in the kitchen of their New York apartment. Flores distributed fliers and samples around their Bronx neighborhood on weekends. They sold.

The quesitos remained a part-time venture, however, until 1997, when Flores lost two jobs in her field within months of each other. Suddenly, the catering business became a lifeline. "I was 50 -- a middle-aged Latino woman. What was I going to do?" she says. Flores learned about Trickle Up in a course for small-scale entrepreneurs at the Women's Housing & Economic Development Corp., a New York state agency. Nonprofit and international, Trickle Up helps low-income entrepreneurs expand businesses, giving preference to women, minorities, recent immigrants, and those receiving welfare or public assistance. With no income other than her unemployment checks and depleted savings, Flores qualified for a Trickle Up grant.

SURVIVAL PLAN. Mildred Robbins Leet and her late husband, Glen, founded the Trickle Up program in 1979 with $1,000 of their own money. Since then, it has launched 67,000 small, typically home-based businesses in 115 countries -- 600 of them in the U.S., where the program has operated since 1994. "We've never said we made millionaires," says Leet. "We are helping people move out of poverty. Starting a business is the way you survive."

The Leets, who worked for decades in international community aid, chose the name -- a play on "trickle-down" economic theory -- after seeing how few people benefited from donor money. "We saw the massive infusions of aid did not trickle down," says Leet. "The rich were getting richer, and the poor were getting poorer. We developed the idea of the grants with the expectation that [their benefits] would trickle up."

Today, Trickle Up operates out of a New York loft. Funded by individuals, foundations, development organizations, and corporations, it has a $2 million budget and a staff of 13. It has partnerships with about 340 coordinating agencies -- grassroots organizations that identify candidates for grants. They also train recipients and counsel them once they start their ventures.

OVERSEAS UPSTARTS. In Rwanda and Mozambique, $100 grants have helped displaced persons and refugees set up businesses. In Cambodia, land-mine victims have established vehicle repair shops with such minimal sums. "Some people feel they cannot fix a motorcycle if they've lost an arm or leg," says Chhem Sip, deputy director of the United Cambodian Community Development Foundation, which administers grants for Trickle Up in rural Kampot province. "But we can train them to use their foot instead of their arm or their foot and their mouth." In the U.S., Trickle Up grants are $700, reflecting the higher cost of living.

Applicants anywhere must draw up business plans, specifying their product, the amount they will invest, and their market. "That is an entire business-training course in itself," says Suzan Habachy, Trickle Up's executive director. U.S. recipients get $500 to start; those overseas get $50. Each entrepreneur in a project must put in 250 hours of work over three months and reinvest or save at least 20% of any profit to get the remaining money.

"Many of the people we target would never test their idea, would never make it profitable," says Maria Elena DelValle, coordinator of the food-training initiative at WHEDCO, which helped Flores develop her business plan and will lease her space in its commercial kitchen. "With the grant money, they can implement their business concept."

In the U.S., $700 might not seem like much. But a small cash infusion can make a difference to such home-based enterprises. "The program fills a narrow niche," says Jason Friedman, director of economic development for Iowa's Institute for Social & Economic Development, one of Trickle Up's coordinating agencies. "We had someone who makes electronic repairs, and then he diversified into selling pagers. He needed Internet access, and the grant paid half the cost of the computer."

With the $700 Flores received last summer, she bought ingredients, baking sheets, and a multiple-wheel pastry cutter that made the quesitos more uniform and sped production. "This meant more product and more sales. It was a small investment for the increase in revenue," says Flores. In December, the couple sold more than $2,500 worth of quesitos -- just from direct orders. Their next step, she says, is expanding to stores and restaurants.

Next in this two-part series: Growing after the First Grant

By Karin Halperin in New York

To: FINANCE