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A local nonprofit that specializes in microloans to small businesses is stretching its financial wings with a new check-cashing company in Wheaton.

The company, Community First Financial Services LLC, will be located next door to Latino Economic Development Corporation's Wheaton office on Price Avenue. It will generate needed revenue for LEDC's nonprofit through check-cashing, remittances and eventually short-term personal loans when it launches in the fall, said Manuel Hidalgo, the executive director of LEDC.

Check-cashing services, or stores that provide immediate cash for a percentage of a check, is nothing new in the Hispanic community, and there are already several such businesses in Wheaton.

According to data compiled by a consultant for Community First, Community Wealth Ventures, Latinos are three times more likely than whites to be without banking services. Of those, 61 percent use check-cashing services.

There are several reasons: language barriers, a perceived lack of access to banks, no proper identification and a preference for quick and easy financing, according to Community Wealth Venture's marketing overview.

"They prefer their local ‘bodega' — mom and pop store," Hidalgo said.

Even if that ‘bodega' comes with higher fees, which is the case with check cashing and payday loans.

And while they can be magnets for crime because of the high amount of cash flowing through — Community First has bulletproof windows in front of the tellers and an emergency button — the past few years in Wheaton have been trouble-free, said Natalie Cantor, the director of the Mid-County Regional Services Center.

Cantor also said the town has a good balance of banks and check-cashing services.

"There's room for both, there's need for both," she said.

Hidalgo said another challenge with check-cashing services is the exorbitant fees many charge for payday loans, or a loan of cash in advance of a check.

They're so controversial that in Maryland payday loans are prohibited by a small-loan rate cap of 33 percent annually, according to the Consumer Federation of America.

Instead, many check-cashing businesses have tried to develop pre-pay credit cards, which Hidalgo said has not caught on within the Latino community.

"The Latino community is resisting this notion of using plastic," he said. "Cash is king."

Hidalgo said he hopes Community First can help make responsible, small-term loans affordable for its customers and ease their reliance on cash.

Eventually, Community First will likely offer a six-month loan process similar to what LEDC uses for its small businesses, where consumers pay a 14 percent rate on the loan.

"There is a place for folks who are unbanked to have a credit card," he said.

Hidalgo said finding a place for responsible loaning in the Latino community was one of the motivating factors behind Hispanics in Philanthropy, a national nonprofit for the Hispanic community, which paid for the two-year consulting process.

He also stressed that Community First, a for-profit enterprise, will not receive funding from federal, state and local governments or donors like its nonprofit counterpart does. The business should be able to pay for its own rent soon and the rest will finance foreclosure preventative counseling and small business loans in Wheaton, he said.