Mark Newman needed some fast cash last October to keep his small Studio City wine-importing business afloat. He went to his main bank but was rejected for a loan because of his relatively low sales. So Newman, 61, turned instead to an online lending company called OnDeck. After submitting a handful of bank statements, he was quickly approved for a $65,000 loan, which allowed Newman to cover his wine shipments and keep his business running. All good, right? Wrong, says Newman.
Insights into the world of small business lending and development
Karen Smith worked for decades as an office administrator and hated it. So she changed her life radically: She launched a business making jewelry five years ago. At first, she made beaded bracelets. Then she taught herself how to work with metal, mostly by reading books and watching YouTube videos. “I looooove doing this,” said Smith, as she lit a torch in her tiny Oakland studio and soldered a silver ribbon to make a ring. “I have never in my adult life had a job where I felt the freedom and passion that I feel now with my work. This is what I’m meant to do.”
Ariell Johnson talks about launching her comic book shop and coffee house and pursuing different financing options to get the business off the ground.
Andrew Li and Chris Caquelin tell the origin story of their American-made clothing store and how they secured affordable small business loans through mission-driven organizations.
Missoula-based Montana & Idaho Community Development Corp. and Boise-based Capital Matrix have set up a fund dedicated to loans for Idaho businesses. Both nonprofits specialize in financing “nearly bankable” business that can’t get bank loans. Capital Matrix supplied a $150,000 seed fund for Montana & Idaho CDC to establish an Idaho lending fund. Until now, Montana & Idaho CDC has funded Idaho businesses from the same program that covers loans in both states.
On this date last year, OFN launched Venturize, a digital public awareness and education campaign designed to inform small business owners about their financing options and help them prepare for the borrowing process.
The campaign is a major initiative to address the rapid growth of online lending, which has dramatically changed the market for small business loans, presenting both CDFIs and small business owners with new and tough challenges.
Heather Chung discusses searching for financing options to open her Korean restaurant and to then expand the business to multiple locations.
Maria Cruz shares how a flooded basement in her flower shop led her to take out costly loans and where she found an affordable alternative.
President Trump released his full Fiscal Year 2018 budget yesterday, and it calls for a reduction in the Community Development Financial Institutions Fund from $248 million to a paltry $14 million. This essentially amounts to elimination of the crucial fund, which would be a heavy blow to small businesses in distressed rural and urban areas. The administration’s reasoning behind their decision is that the program has been so successful that it is no longer necessary. The first part of that statement is accurate. The last part is dangerous.