Microloans
Why Microloans for Small Business Owners?
For many in California, a job is not enough to provide economic self-sufficiency. For others, wage employment isn’t even a realistic option, due to language barriers or family situations that require flexible work schedules. Many of these enterprising individuals start small businesses—on the side or as their main employment — to support their families. They start home daycare centers, hair salons, janitorial services, small retail stores, and more.
These entrepreneurs often need small amounts of capital to start or expand their businesses, but cannot get a loan from a bank because:
- The loan amount they need is too small;
- They have poor, little, or no credit history;
- They have been in business less than two years; or
- They have no collateral.
How Does It Work?
Similar to microfinance institutions around the world, we lend a hand to low-income entrepreneurs by meeting their small capital needs. In doing this, we look at their potential as successful business owners, not just the numbers on their credit report and their loan application.
We meet with each applicant to go over their business plan and cash flow statements. We ensure that they need a loan, are ready for it, and will be able to repay it. Then we find a loan amount that is right for them. Clients can start with as little as $500 to help boost their business while building their credit score. For clients with larger needs, but who still are not “bankable,” Opportunity Fund provides small business loans of up to $100,000.
With offices and loan officers located throughout the Bay Area, Opportunity Fund lends to Northern California small businesses, targeting those located in the urban markets of San Francisco, Alameda, Santa Clara, and San Mateo counties. Opportunity Fund also deploys capital to small businesses in need in Southern California through a unique partnership with Financiera Confianza in Los Angeles.
What are the Results?
When small businesses get the capital and business advising they need, they:
- Increase their business revenues by 30%
- Create jobs (2.4, on average, with each loan)
- Stay in business (90% survival rate)
After investing more than $19.5 million to support small businesses, the results are in:
- 2:1 Return on Investment
- Businesses grow to: hire new employees; generate more taxe revenue; spend their dollars at other local businesses
- Each year, our current lending portfolio generates over $22 million in additional economic activity.
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