Post-Loan Business Coaching Leads to Micro Lending Success

March 13, 2013

By Bob Coleman
Editor, Coleman Report

We spoke with Kelly Lovlien, Director of Operations, Working Solutions about microlending in San Fransisco and their partnership with TMC Development.

Bob Coleman: We’re talking with Kelly Lovlien, the Director of Operations for Working Solutions, a micro-lender out of San Francisco, who works with TMC Development. Kelly, welcome.

Kelly Lovlien: Thank you, Bob, for having me.

Bob: What does Working Solutions do?

Kelly: Working Solutions is a non-profit micro-lender; we’re headquartered in the financial district of San Francisco, and we provide loans for 5,000 up to 50,000 to businesses that are in a startup or existing phase and are ineligible for bank financing.

Bob: Kelly, tell us about your perfect borrower. Describe someone that you can really provide this service to, this micro-loan.

Kelly: Absolutely. Our kind of Mission client, our perfect client, is someone that needs about $25,000. Usually they have worked in the industry for 8 or 9 years and are ready to strike out on their own and open their own business.

Bob: Such as? Give me an example.

Kelly: Such as a coffee shop, an insurance company; maybe they’re a gluten-free bakery or a cheese shop in the Mission; and they put their whole life savings into their business. They’ve thought about their projections, they’ve thought about permits and licensing, and started negotiating a lease with the landlord; and they realize they need about $25,000 more for project costs.

Bob: I would imagine a lot of job creation going on.

Kelly: Absolutely, so as the City of San Francisco’s micro-loan intermediary, it is our number one job to create good quality, long-term jobs for the Bay area.

Bob: You know, the people who are watching this, they are bankers, they’re stat geeks. Give us the stats. How many loans? Are you getting repaid?

Kelly: Absolutely. So currently we’ve made over 140 loans to date, which is about three and a half million dollars.

Bob: Congratulations.

Kelly: We have a 98% repayment rate which we see as a direct link to that post-loan business coaching and mentoring I was talking about earlier.

Bob: Repayment rate?

Kelly: 98%

Bob: Very impressive. You get the $25,000 loan – then what happens? Would you give them more money, or do they graduate to a conventional lender?

Kelly: Absolutely. So most entrepreneurs that come to us, first they went to their banker and that banker said that unfortunately at this time, because of your credit score or perhaps the time you’ve been in business, you are ineligible for bank financing. However, they’re able to refer that entrepreneur to our program as we have a little bit more flexible underwriting criteria; and we’re able to provide them with a loan, the business coaching; and then as 2 or 3 years go by they’re able to graduate to that conventional financing.

Bob: Kelly, tell us the relationship between you and TMC Development. TMC Development is a top three 504 SBA lender. How does Working Solutions interact with TMC Development?

Kelly: Exactly. So Working Solutions is an outgrowth of, as you mentioned earlier, California’s largest SBA 504 lender – TMC Financing. We started out as a pilot program within the organization and currently we’re housed in their office and we share many resources – admin, HR and accounting. We’re able to provide financing for entrepreneurs at different stages of their business, from micro-loans all the way up to helping them buy their building. In fact, one of our micro-borrowers recently was approved for a loan at TMC.

Bob: Great. Kelly Lovlien, San Francisco, Working Solutions. Thanks for joining us.

Kelly: Thank you.

Watch the interview here

Bob Coleman
Coleman Report

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(626) 824-9431 (Joseph Coleman, alternate contact)

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