NewsMaking It In San Diego


Nonprofit offers a path for start-ups struggling to get a loan

Posted at 6:38 PM, Mar 21, 2022
and last updated 2022-03-21 21:55:25-04

SAN DIEGO (KGTV) — Pouring coffee beans into an espresso machine, Yan Yanez is in his element at his old town coffee shop, Flor and Seed.

It's scheduled to open its doors on April 1, but the journey to get to this point is no fool's day joke.

"COVID came, I got laid off, " he said. "And it was either we do something, or we make lemonade out of what is thrown to us."

Yanez connected with his longtime friend Leo Nunez, and the two set out to bring Mexican-style coffee to San Diego.

They got the beans, the space, the equipment -- but what they needed was a loan to get started. The problem -- with their lack of track record, commercial banks weren't biting.

"(Leo) asked for money to Wells Fargo and Wells Fargo was like, well, I can't give you no money, but I know someone who could," Yanez said.

The two connected with Accessity, a nonprofit Community Development Financial Institution that issues loans to small business owners that may strike out at the big banks, either for a lack of history, or past blemishes in their credit.

Yanez and Nunez ultimately borrowed $63,000 that allowed them to get Flor and Seed ready for opening day. But it cost them more in interest, 14.99 percent to be exact.

Accessity CEO Elizabeth Schott said the organization charges higher rates because it works with businesses other banks may deem too risky. The nonprofit offers fixed rate loans between $300 and $100,000, at fixed rates of 6.99% to 14.99%, simple interest. While traditional banks may charge 3 to 7%, Accessity still beats taking out cash advance on a credit card, where rates are generally above 20%.

"If they're able to qualify with traditional programs, we would encourage them to do that," Schott said. "Our program is really built so that we can assist these business owners eventually to grow and get more experience and then transition onto that."

There is not a particular minimum credit score to apply for the loans. However, Accessity requires people to be current on their bills or on payment plans.

Yanez and Nunez have since refinanced to a rate about 2% lower. For them, the most important thing was getting their shot.