(KPIX 5) — About 8,000 small business loans are denied every day in this country, according to the U.S. Federal Reserve. It’s a story Alicia Villanueva knows all too well.
She and her husband came to the United States from Mexico 18 years ago, chasing the American dream. They cleaned homes and washed cars, but it was not enough to make ends meet. So drawing upon her talents in the kitchen, and some old family recipes, Villanueva began making and selling homemade tamales. Her home kitchen quickly transformed into a make-shift tamale factory.
“Every night I was cooking,” recalled Villanueva. “Like, let’s say, 50 to 100 tamales.”
But even as her home-cooked tamales started selling like proverbial hotcakes, Villanueva could not get the traditional bank loan she needed to move her food preparation into a commercial kitchen.
Then Villanueva met Eric Weaver. The son of an economist, Weaver says he saw firsthand in his own family the need small business owners could have for micro-loans. Years ago, Weaver’s great-aunt bought a small business herself — a move Weaver said could not have been possible without the small loan she received from a business associate.
So in 1992, Weaver founded Opportunity Fund, launched with a consortium of 15 banks. But although the San Jose-based non-profit works with traditional lenders, its business practices are a bit different. Weaver says Opportunity Fund delves into an applicant’s financial picture and character. And since it lends to people with bad or non-existent credit, a granted loan comes with an automatic offer of hands-on financial management support, and a hefty dose of financial responsibility.
Weaver says Fund managers will call a client directly if they are even one day late on a loan payment. So the repayment rate is high, sitting at 95%. Today, Opportunity Fund loans about $5 to $7 million a month to small business owners in California and 13 other states. The money comes from business and private donations. An average loan can range from $2,600 to $250,000. Under Weaver’s leadership, 6,200 businesses have received loans.
Villanueva says she is extremely grateful to be in that ‘6200’ club. She has borrowed about $100,000 in the past few years, using the money to fund her first food cart, a catering van, even rent for a new warehouse location where she and her employees craft thousands of tamales each year. And she is quick to thank the man who made it all possible.
“When you find someone who believes in you and make that this dream come true,” said Villanueva of Weaver, “It’s amazing support.”
Weaver just recently stepped down as Opportunity Fund’s CEO and now works as its senior advisor. He says his days now will be occupied with fundraising, grant writing, and expansion projects. Opportunity Fund, along with other partners like Lending Club, is set to expand into other parts of the U.S. later this year.
But even with all that lies ahead, Weaver says it never gets old, and the rewards of watching businesses like Villanueva’s succeed are immeasurable.
“What was important to me was to do something I thought would make a meaningful difference in people’s lives,” explained Weaver. ” I never dreamed it would come to this. It’s wonderful.”
So for creating a lending program that’s funding opportunities for thousands of entrepreneurs, this week’s Jefferson Award in the Bay Area goes to Eric Weaver.