Starting a business requires courage, planning, hard work, patience, vision, and capital. Entrepreneurs are naturally endowed with the drive and tenacity to succeed in business, but access to capital is another story.
Banks don’t like to lend money to people who are new in business or those who have had credit issues in the past. Online lenders are proliferating, but small business loans from online sources often carry higher interest rates and less favorable terms.
In the San Francisco Bay Area, small business owners have an alternative. Working Solutions, a local nonprofit microlender, has provided $10 million of safe, affordable capital to nearly 1,200 borrowers. Working Solutions also provides hands-on coaching and expert advice to give borrowers every opportunity to succeed. One borrower, Christopher Coccagana, founder of T-We Tea, likens Working Solutions’ approach to “training wheels for small businesses.”
2Bridge recently sat down with Emily Gasner, executive director of Working Solutions, to discuss the organization’s unique approach. We also chatted with Christopher Coccagna, a Working Solutions borrower and winner of the Working Solutions’ 2015 Invest in Dreams award. Christopher received his first loan from Working Solutions in 2011 to expand his home-based tea business and develop his website. He received a second loan from Working Solutions in 2014 to expand his retail presence.
Working Solutions is getting ready for the 9th Annual Invest in Dreams Breakfast on March 15, 2016.
Emily — what are the benefits of getting a small business microloan from Working Solutions?
Working Solutions provides safe, affordable capital, which helps small business owners build their credit. We provide access to services that enable the business owner to utilize the loan in a way that's going to grow the business. Businesses also benefit simply by going through our loan application process. Some have called it a mini-MBA, because of the unique opportunity to see the loan application process from a lender's perspective.
Christopher — why did you initially apply for a loan?
I’ve done two rounds of funding with Working Solutions—the first loan was about establishing my business as credit-worthy. I wanted to show a history of payment and build up my credit-worthiness for the day when the bigger loans needed to happen. When we expanded our retail store we needed a larger financial investment in the business, so I applied to Working Solutions for a much larger microloan, and we consolidated the two loans.
Christopher — how did the Working Solutions loan—and the loan application process—benefit your business?
The application process is very caring and nurturing for small business owners. They root for you throughout the application process, and the advisory board that reviews your application really wants to learn about your business. It’s such a good process, like training wheels for small business owners.
And then there’s the post-loan support. That’s another area where Working Solutions excels through one-on-one meetings, quarterly check-ins, and the constant support, including workshops and even business advisors. A budgeting advisor helped shape my mindset about how I run the business. Just the process of having to submit quarterly financial reports was really good to understand the health and financial well-being of the business.
Emily — you're coming up on $10 million loaned. What does that mean to you?
It means a lot to me in terms of the growth of the organization, our investment in the community, and that we’ve grown in a very sustainable way. These businesses have created and retained over 1,100 jobs. So just seeing the difference in the community has been fabulous.
Amazingly, you have a 96 percent repayment rate? What do you attribute to your success?
I attribute that to the careful and thoughtful application process. We make sure that the loan is a good fit for the people who are looking for capital, and that the borrowers are eager to take advantage of the free business consulting. We focus on making sure that borrowers are using and managing the money wisely as opposed to just lending them money and saying okay, good luck.
Emily — tell us about the 2016 Imagine Dreams breakfast.
The event started as a thank-you breakfast to our bank partners, and now it's grown to about 300 community leaders, business owners, clients, and people who are interested in our mission. This year, we’ll talk about the $10 million we’ve invested and what it means for the community. Also, we have three award-winners of the Invest in Dreams Award. It’s always fun and a good chance to get reacquainted. I'm really excited,
Christopher — what’s next for your business?
Over the last few years, we’ve jumped at every opportunity that’s presented itself. We learned a lot, and now we’re making informed decisions. We’re focused on expanding the core of the business, which is our wholesale and online presence. We’re maturing into something better.