Ripple Effect – New research reports macroeconomic impact of Opportunity Fund lending

Today, Opportunity Fund is releasing new research that calculates the “ripple effect”—the macroeconomic impact—of Opportunity Fund’s small business lending on California’s economy. Small businesses are often referred to as the engine of our economy. This new report – “Ripple Effect: The Macroeconomic Impact of Small Business Lending” – aggregates the direct, indirect, and induced economic effects of small business loans to calculate the total impact of Opportunity Fund’s lending.

Based on an examination of Opportunity Fund’s small business microloan program from 1995 to 2015, representing a total $131 million investment, the report finds that the small businesses we have funded generate more than $257 million in annual economic activity in California – a return of $2 each year for every $1 we’ve ever invested.

Responsibility and Reliability
Opportunity Fund commissioned TXP, Inc. to measure our impact using objective, verified research methods because we believe rigorous economic analysis is critical to advancing our mission and fulfilling our responsibility to our investors to fully measure the return on investment from your support.

Regional and Industry-Specific Data
In addition to the key findings noted below, I encourage you to examine the report to see annual economic activity by industry and by region. For example, our lending spurs California’s manufacturing industry to generate an additional $24 million per year! And while we started lending in Southern California less than 5 years ago, the $34 million we’ve already invested in Los Angeles and Orange County return the most of any region – $74 million in annual economic activity. (Not to mention the activity in the Inland Empire!)

These critical investments in California’s small businesses would not be possible without your support. I hope this research gives you confidence and courage to continue investing in California’s entrepreneurs, like Mo, whose story we share below. Please contact me or Evaluation Officer Jenna Boyer, who authored the report, with any questions about the report.

Key Findings

 1. Every $1 Opportunity Fund lends generates approximately $2 in new annual economic activity.

 2. Opportunity Fund’s loans have helped to support more than 15,000 existing and new jobs in California.

 3. Every $1 Opportunity Fund lends generates ~$.56 in additional wages earned annually through downstream economic activity.

 4. Opportunity Fund’s lending to date generates more than $8 million in aggregate tax revenue every year for local and state government.

The Ripple Effect of a Microloan


Meet Mo
Calculate the Ripple Effect of a Long-Haul Trucker

Mo is a long-haul truck driver from Concord, California. After twenty years driving for a big company, Mo used a loan from Opportunity Fund to purchase his own truck to earn more as his own boss.

“I spend days away from my family. I love my wife and our daughter, Sarah. She is the reason I work so hard. She just graduated from college!” Mo says with a smile.

Four years ago, Mo had a heart attack, just minutes after making his last delivery. He needed a quintuple bypass. Six months later, he was back on the job, but he needed to make up for the time he lost while recovering.

Mo got a new loan from Opportunity Fund to buy refrigerators for his trailers, enabling him to haul cold and frozen foods, rather than dry goods.

“I earn 40% more driving cold products. This loan made it possible for me to support my family, even after the heart attack,” said Mo.

Everywhere Mo drives, he produces a ripple effect in the economy: gas stations, mechanic shops, restaurants, and motels all get a boost from his business; in turn, those businesses pay their employees, who then buy groceries, shop locally, and pay taxes. Additionally, the movement of goods that Mo provides supports growers, wholesalers, and retailers who rely on the trucking industry to get their products to market.