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Pacific Community Ventures: Look to Your Friendly Neighborhood CDFI

#SFSBW2017 asked some of our resources to share insights, best practices, and examples of how they help small business owners flourish. Today we hear from Pacific Community Ventures.

Tell us about your organization’s mission in one sentence.

Pacific Community Ventures is a nonprofit here in San Francisco that engages small businesses, investors and policymakers to build an economy that works for everyone.

Pacific Community Ventures collage

What are your organization’s recent accomplishments that demonstrate how you have helped the small business community?

In 2016 we provided 379 small businesses with access to fair and affordable loans and free expert mentorship. The businesses we worked with created and retained 3,492 jobs. Companies working with our advising and lending programs grew their revenues by 20% on average and had an average 44% job growth — which way surpasses state averages (2.6%).

What tools and resources have your organization created to help small businesses tap into new opportunities to reach new customers, increase their revenue, and grow their business?

PCV offers San Francisco small businesses a unique “loan plus advice” program. We work with small businesses who are beyond the startup phase — but don’t have a sufficient track record to qualify for bank lending — and give them loans and microloans up to $200,000. We match each borrower with a pro bono advisor who has expertise specific to that small business’s needs – expertise in areas like marketing, legal, finance, or human resources. So it’s great to help a business owner who has a challenge to growth in an area they don’t have experience in yet.

We also offer that same pro bono advisor matching program to any small business who comes to us. Our innovative BusinessAdvising.org platform connects small businesses with pro bono expert advisors from a pool of over 500. Rather than just providing general business knowledge, or working with a retired professional, each advisor in our program is an active professional with expertise specific to the different needs of that individual small business.

San Francisco has been experiencing quite the transformation. What is your organization doing to attract and support new and younger small business owners? What resources do you offer to entrepreneurs and small businesses to get started?

While we don’t work with pure startups, we do offer resources to a group of people who fall into the “resource gap” — business owners who have graduated from accelerators and need help beyond what our amazing partners at the SBDC can offer.

By offering a resource for small business owners who are turned down by their bank or the Small Business Administration (due to their more stringent guidelines) we’re filling a major gap. And, our free mentoring program doubles their chances of success. According to the Small Business Administration, only 30% of businesses make it to 10 years. But for small business owners with a mentor like ours, 70% survive to that ten-year mark, double the rate of other small businesses.

San Francisco is known for its diverse culture. How does your organization ensure that the small businesses that make this city unique are able to stay in San Francisco?

We work with small business owners who have a dream, but who don’t have big built-in networks or access to enormous sums of capital. For example, the fastest-growing group of Americans starting new ventures is African-American women. But you’d never know that based on where the money is going.

PCV is different. Almost 60% of PCV small businesses have a female owner, and 40% of PCV small businesses have a person of color as an owner. And in the coming years, we’re working to make those numbers even better. If we help empower small business owners to increase their competitiveness while at the same time creating quality jobs with better wages, then every community and worker in the Bay Area benefits.

What words of advice or wisdom would you like to share with small business owners?

When it comes to finding capital, don’t be dissuaded if your bank turns you down, or you don’t meet SBA loan criteria. And don’t take out a predatory online loan! Look to your friendly neighborhood CDFI.

There are hundreds of nonprofit alternatives to online lenders! If you’re a small business owner and you aren’t familiar with CDFIs, they’re probably your future best friend.

Community Development Financial Institutions – like Pacific Community Ventures – offer low-cost loans but are more flexible than a traditional bank. CDFIs are institutions that are 100% dedicated to delivering responsible, affordable lending to help underserved communities join the economic mainstream. For example, we specialize in working with small business owners who’ve had a hard time accessing capital, like female entrepreneurs, entrepreneurs of color. And a full 100% of our borrowers had been previously turned down for SBA or traditional bank loans.

Beyond lending, we also hear from small business owners that the actual day-to-day needs of growing a business, and making that growth sustainable, are beyond the skills of any one person. For example, you may have made a name for yourself at farmers’ markets around the area, or maybe with a food truck or pop-up. But now that you’re ready to open a storefront, how do you find investors? Write a business plan? Develop a brand strategy? Navigate city permitting? And who has the time for all this?

We can’t over-emphasize the value of mentorship. Many small business owners began their companies after early success pursuing their skills and passions: be it designing jewelry, curating a retail shop, opening a restaurant, even starting a small farm or landscaping company. They start wearing all the hats: CEO, marketing, product development, supply chain, and sales. Then they hit their first wall: success.

This is where having an advisor or mentor is crucial. It means having the outside perspective of someone who’s navigated the waters that you’ve yet to dip a toe in.

 

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