Today is a big day for Opportunity Fund and small business owners in California—we won $3 million in loan capital and grant funding from the prestigious Wells Fargo NEXT Opportunity Award! We will use the NEXT award to expand our EasyPay loan product in the Bay Area, Los Angeles, and throughout California—financing 1,000 entrepreneurs over the next few years, creating and sustaining 2,900 jobs. Longer term, we hope to offer a “white label” version of EasyPay to other CDFIs, making the program replicable on a national scale.
EasyPay is an affordable and responsible financing solution that allows small business owners who do not qualify for traditional financing to access capital and repay their loans automatically through daily credit and debit card sales, rather than as a lump-sum term payment each month. This means that loan repayment matches sales volume—a huge advantage for cyclical or seasonal businesses. In practice, the automatic split means that during busy days (weekends for a restaurant), the business repays more; during slow days (weekdays for a clothing retailer), the business repays less. It also means that businesses with seasonal sales cycles—such as a flower shop or barbecue joint—have a repayment schedule that effectively matches their revenue cycles.
Opportunity Fund reports repayments to the credit bureaus so that our borrowers are automatically building their credit. And the automation means lower costs for both Opportunity Fund and our borrowers, letting entrepreneurs focus on building their businesses and serving their clients.
Before we created the EasyPay loan, the microlending industry offered just one basic business loan with monthly installment repayments. EasyPay is an entirely new loan product that lets Opportunity Fund serve a broader range of small business owners— and it is replicable and scalable.
Through EasyPay, Opportunity Fund offers an affordable, appropriate financing solution to small business owners without good alternatives. With this huge boost from the Wells Fargo NEXT Award, EasyPay will help Opportunity Fund say “yes” to the dreams of more entrepreneurs than ever before!
We are grateful to the Opportunity Finance Network, Wells Fargo, The MacArthur Foundation and The Kresge Foundation for this amazing honor and investment in Opportunity Fund and our small business clients. Click here to read the full press release about the 2013 NEXT Awards.