Strengthening LA's Entrepreneurs through Responsible Microlending

submission by Opportunity Fund
Strengthening LA's Entrepreneurs through Responsible Microlending

About Your Application

Organization(s) name(s):

Opportunity Fund

Organization(s) website(s):

www.opportunityfund.org

Organization(s) twitter handle(s):

www.twitter.com/opportunityfund

Organization(s) facebook handle(s):

www.facebook.com/opportunityfund

Organization(s) instagram handle(s):

www.instagram.com/opportunityfund

Please share the direct link for voters to sign up for your newsletter(s):

http://www.opportunityfund.org/newsletter/

Describe Your Organization(s)

Non-profit organization

For-profit organization

Government

Other (please specify below):

In one sentence, please describe what your organization does.

:

Opportunity Fund helps close the opportunity gap for working families by offering affordable, responsible financial products that enable underserved small businesses and households to work toward financial stability and economic mobility.

In one to three sentences, please describe your proposal.

:

Opportunity Fund has a vision that every entrepreneur in Los Angeles can access the financing and support needed to realize his or her full potential to create wealth and jobs. As California’s largest nonprofit microlender, we seek to invest $10 million in 700 small businesses across LA this year—creating and retaining 1,800 jobs and driving economic activity in the region’s most underserved communities.

Please write a sample tweet to describe your submission.

:

Help LA entrepreneurs access #microloans to create #jobs in our community!

Where will you be working? Please be specific (e.g. Third Street Middle School; Boyle Heights; LA County).

Central LA

East LA

San Gabriel Valley

San Fernando Valey

South LA

Westside

South Bay

Antelope Valley

County of Los Angeles (countywide)

City of Los Angeles (citywide)

LAUSD

Other (please specify below):

How do you plan to use these resources to make change? (check all that apply)

Conduct research

Engage residents and stakeholders

Implement a pilot or new project

Expand a pilot or program

Mobilize for systems change

Advocate with policymakers and leaders

Implement and track policy

Other (please specify below):

How will your proposal improve the following “Create” metrics? (check all that apply)

Employment in the creative industries

Arts establishments per capita

Concentration of manufacturing activity in LA

Federal research grant funding

Patents per capita

Jobs per capita

Minority- and women-owned firms

Gini coefficient

Number of high growth startups

Venture capital investment

Measures of cultural and global economic influence (“soft power”) (Dream Metric)

Recruiting and retention rates for local higher education institutions (Dream Metric)

Percentage of graduates from local higher education institutions that remain in LA County 5 years after graduating (Dream Metric)

Unemployment rates (and opportunities) for the formerly incarcerated (Dream Metric)

Describe in greater detail how you will make LA the best place to create.

:

Working families in Los Angeles face the challenges of managing insufficient money, finding affordable housing, raising healthy families, and preparing for the future. The region lacks adequate well-paying jobs in growth sectors; this lack of opportunity is compounded for low-income and minority households by the poor education system. For many households, entrepreneurship is a primary route to financial stability.

Small business ownership creates opportunities for families living in poverty to pursue stability and economic mobility, while creating jobs in their communities. If one in three microenterprises hired an additional person, the U.S. would return to full employment; if every microbusiness generated $5,000 more annually, this would add $20B to the economy. Yet, every day, 8,000 small businesses in the U.S. are turned down for a loan; 50% of small businesses fail, often due to an inability to access the capital they need to grow because of language and cultural barriers, limited assets, low capital needs, and credit issues.

The mainstream financial industry offers little to help small businesses access the capital they need to grow and thrive, especially in places like East LA, Boyle Heights, and Downtown. The fast-growing alternative financing industry offers access to fast cash, but often at a high cost that can strangle a small business’ cash flow. Opportunity Fund is filling this financing gap by pioneering a new approach that combines technology, efficiency, market knowledge, and impact measurement to help entrepreneurs build sustainable enterprises and a better life for themselves and their families. By deploying affordable, responsible microloans to underserved entrepreneurs, our microlending program helps drive small business growth and job creation in the communities that need it most.

We target entrepreneurs who operate their businesses (and, in many cases, live their lives) outside the financial mainstream. In LA, our borrowers are 98% minority, with an average median household income of less than $25,000. These clients have a 90% business survival rate; each loan we originate creates or sustains 2.5 jobs on average.

Through the LA2050 Challenge, we seek to scale our microlending in LA’s underserved communities to serve 700 small business owners in 2016—creating and retaining 1,800 jobs and generating more than $25 million in annual economic activity through new spending, wages, and tax revenues.

Please explain how you will evaluate your work.

:

Opportunity Fund uses a variety of performance indicators to measure the success of our small business clients. In the short term, we track the number of applicants and number, dollar volume, and type of loans originated, as well as client characteristics such as income, ethnicity, gender, credit score, household size, type of business, sales, and number of employees.

Over time, we measure the impact of our loans by tracking changes in borrower household income; growth of business sales and income; job creation; and business survival rates. We also gather data related to client satisfaction and confidence in running their business.

We recently launched a multi-year effort to evaluate the longer-term impact of microloans on businesses, households, and the community at large. This study will gather and analyze data from thousands of microlending clients to deepen our understanding of the impact of a microloan on key economic and household measures.

How can the LA2050 community and other stakeholders help your proposal succeed? (check all that apply)

Money (financial capital)

Volunteers/staff (human capital)

Publicity/awareness (social capital)

Infrastructure (building/space/vehicles, etc.)

Education/training

Technical infrastructure (computers, etc.)

Community outreach

Network/relationship support

Quality improvement research

Other (please specify below):

Discussion
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Pink ribbon award box icon 45b87e779c93f5099a48378c2aadc0fcd51184974daecf76e3f5c50034ea21fb
Award topvotedidea 5a5ae14e3d56a10363ea2a398cece46cf4df891213cbe68677c19d8903a1932a
$100,000
Circle 1 inactive e7784182a1bd5eace578987db27fc19ec6337f418c48c6c8732605b9043d50d0 Step1 title submission inactive cde083e53089b973e7c9dc80a44a038c1ce4cf3b2650aeb5549157d1ed58a2d9

Submission Began
Tuesday, September 08, 2015

Submission Ended
Tuesday, October 06, 2015
at 07:00 PM UTC

Circle 2 inactive 74a43088831beb43fdbd7591ef5d50a5a7a26ff92c9e8ed489782459fa31a8d9 Step2 title voting inactive 96be722f53c417edddb5742ba9a6dc2fd403f7e4f6c19dbe883d50d20d93689d

Voting Began
Tuesday, October 20, 2015

Voting Ended
Tuesday, November 03, 2015
at 08:00 PM UTC

Circle 3 83da7a9432aeea960e1a9e9ee93e7ea1221af6c8f42b27964f2e9999d94b2b8d Step3 title 3d9e2a65d6ea1ad301f8fc607f5f828bd96362932c71d81c0da5b1fd964422b0

Winner Announced
Tuesday, December 08, 2015