Small Businesses provide over 55 percent of the total jobs in America and constitute over two-thirds of the country's job growth. However, only half of start-up companies last more than five years and only a quarter are still around after ten years. To improve these statistical failure rates, the David and Lucille Packard Foundation has teamed up with the Opportunity Fund to expand its small business support in Monterey and Santa Cruz counties. (Read David and Lucille Packard Foundation: Bay Area Grants).
With Packard's help, the Opportunity Fund has a goal of providing 100 loans to small businesses in these counties over the next two years. “It gives everyone, whether you have a small business, a medium business, or a large business, a fair shot at making it,” said Bud Colligan, member of the fund's leadership council. “We provide opportunity to all comers, not just to a select few.”
“When it came to reviewing support for Opportunity Fund’s expansion to Santa Cruz County, we were excited by their potential to contribute to the county’s social and economic life, given Opportunity Fund’s 20-year track record,” wrote Jessica Mancini, program officer responsible for grant making in Santa Cruz County at the David and Lucile Packard Foundation. “We were also encouraged by the support of local partners with whom we work for bringing Opportunity Fund’s work to the area.” (Read Packard Program Officer Jessica Mancini's IP Profile.)
One of these small business recipients is H-Skate, a skateboard shop in Watsonville. H-Skate is a no-frills skate shop carrying popular brands of boards, helmets, gear, accessories, and apparel. The shop's owner, Emily Huante, was one of 44 entrepreneurs in these two counties that received a chunk of the $744,000 in loans last May. However, the average Opportunity Fund loan is relatively small—just $17,000. The Packard Foundation recently approved an additional $50,000 in loan funding, but that will likely be spread around to several small businesses in the area.
Unemployment rates in these counties is high, and this type of non-traditional capital is essential to create jobs in small businesses. “There is always a gap at the bottom for small businesses as banks are not able to make these small loans for a profit,” said Opportunity Fund representative Caitlin McShane. “We are in the business of saying ‘yes’ to opportunity, but it does come with a cost—it takes time.”