We started our small business loan fund to satisfy the needs of smaller businesses that desired to grow and create new jobs for employees. But for one reason or another, these small businesses were unable to secure capital from a traditional bank, bank, or even the Small Business Administration (SBA). PCV uses the investment capital model of pairing our capital with pro bono expert business advising, to assist our small businesses grow sustainably – and once they've grown to prepare them to access more traditional causes of capital.
We're pleased to announce that model is succeeding! A couple of our loan fund borrowers, Gravel & Gold and Bamboo Asia, have successfully repaid their loans, and are now growing as fully bankable companies.
Gravel and Gold
Gravel and Gold is definitely an independent retailer within the Mission District of Bay area. Founded by three women in 2008, Gravel and Gold has cultivated a sizable following one of the neighborhood's artistic and trendy shoppers by selling handmade and locally-produced clothing and accessories. Focused on the maker movement, the founders expanded their network of artisans by hosting workshops within their shop and highlighting their peers' work on their online blog.
At the end of 2012, they began selling Gravel and Gold brand clothing and cloth accessories within the shop, online, and through other retailers scattered across the country. Consequently, the company increased their sales revenue substantially. Even though the team was delighted in the windfall of orders, the company wasn't financially prepared. They originally anticipated one small production run would cover the entire year. However, after selling out of Gravel and Gold products mid-year, they ran another costly production run which hurt the company's year-end margins.
The owners approached PCV for a loan to help them get ready for a large production run in summer of 2022, enhance their website, making improvements for their retail space to allow them to better showcase the Gravel and Gold line. Now, their sales have grew even larger, the company is doing fantastic, and they have repaid their PCV loan entirely.
Bamboo Asia
Sebastiaan van de Rijt owned and operated ten fast-casual Japanese food restaurants in the home country of Belgium. Upon arriving in Bay area this year, he saw an opportunity to replicate his model and offer a unique fast casual Asian fusion restaurant in the Financial District. In July 2011, Sebastiaan launched Bamboo Asia, an innovative restaurant with three micro-stations inside the same space offering Indian, Japanese, and Vietnamese cuisine.
Sebastiaan and the former business partner personally funded the restaurant in the startup stage without resorting to outside debt. With his extensive restaurant experience, Sebastiaan grew Bamboo Asia's revenues in 2022, and the restaurant became profitable in January of 2022.
Although the restaurant has been successful in drawing a sizable lunch crowd, Bamboo Asia desired to boost its happy hour and dinner revenue.
Sebastiaan came to PCV seeking a loan to aid a rebranding effort and an interior design project, which helped them market Bamboo Asia as both a quick casual lunch establishment and relaxed casual dinner establishment. That work has become done, and Bamboo Asia continues grow, having only repaid their PCV loan.
Why Are Loan Funds Like PCV's So Important?
It's tougher for small business, particularly if they're women-owned, minority-owned, or may have imperfect credit, to get working capital.
According to Forbes, “Small business loans on the balance sheets of banks are down about 20 percent since the financial crisis, while loans to larger businesses have risen by about 4 percent over the same period.” And over the final seven years, certainly one of every four community banks has disappeared. That's 1,971 fewer small, local financial institutions today than before the current recession. Most were acquired and absorbed into bigger banks.
CDFIs like ours step in to that particular gap. We help small businesses in the stage between startup and large-scale growth. We operate in the center of this changing landscape between traditional banks and also the SBA, and higher-interest-rate online lending.
