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In 2001, Carla Eliana Godoy was struggling to find space for her nonprofit, Art for Change. Funding had become scarce in the wake of the 9/11 attacks, and Godoy found herself bouncing among churches, community centers and even the Lower East Side Tenement Museum.

She wanted to start something similar to the peñas in her native Bolivia, where artists and activists could gather, relax, and enjoy a drink or two. But she didn’t have much money, and couldn’t get a loan.

“As an entrepreneur and small business, access to a low-cost loan, even a small one, is nearly impossible,” Godoy said. “I got turned away from everyone. No one would take a look at me because I never had a business and I had no collateral.”

After two years, she finally got a $30,000 loan, but couldn’t pay the interest. She took out another loan from ACCION New York, a nonprofit micro-lender that serves the metropolitan area. “It helped me to stay open, and provided me seed money to continue to improve,” she said. Her business, Carlito’s Café on 106th St. and Lexington Ave., has become “one of those small neighborhood treasures.”

Now, economic development officials announced last week, there’s more money being put into a new $5.5 million pot to help people like Godoy start and grow businesses throughout Upper Manhattan.

The largest such fund in the state, it will be administered by the Upper Manhattan Empowerment Zone Development Corporation (UMEZ) and ACCION New York to offer subsidized loans to entrepreneurs who otherwise couldn’t get a loan.

“Micro-businesses are the heart of New York City,” said Robert A. Espaillat, the president and CEO of ACCION New York, at a breakfast in Washington Heights last week announcing the program. “And there’s such a demand for this.”

The program will start taking clients over the next few weeks, and Godoy said she could think of more than two dozen people who had talked to her about starting their own businesses uptown.

The fund will offer loans ranging from $500 to $50,000 at interest rates of less than 10 percent. The initial capital was raised by a million dollar cash grant from UMEZ – which is federally chartered to foster growth and development in upper Manhattan and receives funding from the state, city, and federal governments – and loans from Banco Popular, JPMorgan Chase, and TD Bank USA. While some of the monies are being targeted specifically toward Washington Heights and Inwood, businesses located north of East 96th and West 110th Streets may apply as well.

While it’s difficult to gauge demand at the outset, upper Manhattan businesses have demonstrated an appetite for micro-finance. Accion loaned more than $13 million to 914 clients in 2005, which Espaillat said included people of some 70 nationalities.

Building off that experience, private non-profit ACCION New York will oversee how the money is distributed with an eye toward small, targeted investments that will be the difference between buying a new piece of equipment or hiring an extra worker, Espaillat said.

“It’s one thing to preach, ‘get a job,’” said Congressman Charles Rangel (D-Harlem), the newly minted chairman of the powerful House Ways and Means Committee. “If we’re talking about jobs – real jobs for a community – we have to talk about small business.”

In addition to Rangel, executives from UMEZ including CEO Kenneth J. Knuckles attended the event, along with state Superintendent of Banks Diana Taylor, Councilmembers Robert Jackson (D-Washington Heights) and David Yassky (D-Brooklyn), as well as officials from several upper Manhattan banks.

– Jimmy Vielkind