The programs aren't affiliated with universities, but give students hands-on experience in working with struggling businesses. And because students are volunteers, eliminating labor costs, Yale students say their involvement has enabled Elmseed to achieve what many of the nation's 500 or so other microfinancing programs have not: self-sufficiency.
Thomas, 47, of New Haven, credits Elmseed with helping him turn around his construction business, which now has up to 10 employees and will do $500,000 to $1 million in business this year, up from $50,000 five years ago.
"I just can't say enough about them," Thomas said. "It's a very, very vital part of my success."
Rutgers students are starting to raise money for a program and hope to create a national network of student-run microfinance programs by offering matching grants when students form chapters at their colleges.
"We think with the student model it has a chance of catching on nationally," said Rohan Mathew, a Rutgers student involved in the effort.
Elaine Edgcomb, director of financial programs at the Aspen Institute, a nonprofit that says it is dedicated to fostering leadership and dialogue, has not studied Elmseed, but said it could serve as a model for other microfinancing programs if it can provide consistent support and expertise while relying on student volunteers.
"It is very hard for programs to cover all of their lending costs," said Edgcomb, who has studied the programs extensively.
Thomas said there was no let-up in support, with students urging him to make time for meetings even when he was busy with the business. They brought in a lawyer, an accountant, and a marketing specialist from a Hartford television station.
The students helped Thomas see that his sheetrocking business was not that profitable, so he branched out to windows, doors, and bathroom renovations. As he made more money, he bought tools instead of renting them.
And Thomas was able to get a $1,500 loan. When he repaid that, he got a $3,000 loan.
