September 6, 2010
Jeremy Sowers' barbecue business is thriving thanks to a special recipe, hard work, and a type of loan more common in developing countries than here in the U.S.
Last year Sowers got a $10,000 microloan at 6.75% interest from Opportunity Fund, a non-profit organization based in San Francisco. He has three years to pay it back and says his monthly payment is about $330.
The loan helped Sowers, a former paramedic, grow his Emergency Barbecue mobile catering stand to a store that sits near Highway 101 in San Carlos.
Before the money from Opportunity Fund came through, Sowers tried to get loans from his personal bank and the Small Business Administration, but both turned him down. "I really needed that money. It was one of those situations where if you get it you succeed, and if you don't there's the potential it will bring the whole thing down."
The loan from Opportunity Fund also enabled Sowers to hire four more employees to serve up all that smoked beef, chicken and pork.
Eric Weaver, founder of Opportunity Fund, says his organization made more than 200 loans last year to small businesses in the bay area. Borrowers included child care providers and businesses that wanted to go green.
"They're designed for people who don't have access to more conventional types of credit," Weaver says.
Opportunity Fund's microloans range from $500 to $100,000. Interest rates are currently about 8%.
"Applying for a loan with us is really pretty easy. We make it easy and we make it friendly," says Weaver, who says the payback rate is about 90%, far greater than the payback rate of other business loans.