when we do see people in our office, many of them are a year or two out from even opening their business, so we will ask them what their credits for is, have they done their business plans, do they know what they're capital needs are going to be, how much money they have, how much money they are going to need to open their business. based upon those questions, we will direct them to the sba for workshops, courses. there is other entities that also provide workshop courses score as well in terms of helping to write business plans. also helping to educate the distinction between the micro lender, our bank, and our larger financial institutions and how those lending -- what is the

difference in how this entities will lend, in addition to the sba loans that are available. also in response to the economic crisis, which hit a couple of months after we open our doors, the mayor reinstated the revolving loan fund, and we partnered with tmc working solutions, which is a micro lender, to provide a loan fund for start of an existing businesses to help them. today, that loan has given out 23 loans, and they are averaging around $15,000 or $25,000 each. another unique thing that the city is doing in terms of helping our businesses and dealing with capital needs is as a city, sometimes, we implement regulations, and you would think that might require some

substantial capital for small businesses to do an understanding that a lot of our very small businesses may not have the capital means to be able to implement those regulations. a new one that has just been implemented is there is the fats, oils, and greece requirements that restaurants are going to need to have for their restaurants, and many businesses may have to install new equipment -- fats, oils, and grease. we parted with opportunity loan fund to help provide a specific program for this new regulation for businesses, and we have also had many businesses experience some drive-by lawsuits, and understanding some of the financial needs in dealing with the losses, making the 88 improvements. again, we partnered with opportunity loan funds to help businesses comply and to deal

with their legal needs and with these losses. also, we held businesses understand, if you want to do business with the city and county of san francisco, while we do not regulate that, that is not within our office, but we hope you through the process, and connect with the city agencies who are doing the programs, what we classify as an lbe, we are only able to classify as a small business, but not a minority or woman- owned business. to talk about what kind of contract you would be able to engage in, we also have a unique feature in that we hear some of the issues that businesses are

experiencing and doing business with in san francisco, and so can help work with our policy makers, our legislature and the mayor's office to help change policy that will benefit small businesses as well. with that, i think i will turn it over to budget solutions, but just note that -- i mean, opportunity fund. excuse me. but just know that our office, we are in city hall in the tax and treasurer's office, and our office is www.sfgov.org/osb. we have some information on that. if you did not get one of our small business booklets and you want one, please take my card, e-mail me, and we will mail you one as well. immigrate. thank you, regina. for those of you looking to contact these organizations, you can find their contact

information in the program you should have picked up when you sign in. for those of you who are prospective entrepreneurs, if we could limit the acronyms and talk more about what those acronyms mean. >> sounds good. thanks, mark, virginia, and leader pelosi for putting on this event, and for all that she has done -- thanks mark, regina , and later pelosi. we have been able to access resources through the sba and the cdfi fund which helps get money to small businesses in this time of need. opportunity fund is not a bank or a government agency. we are an independent nonprofit organization with a mission to provide capital to working people to help them earn, say, and invest in the future. we focus primarily on businesses that are not yet bankable.

most of our clients are themselves low or moderate income people or working in low or moderate income neighborhoods. but not exclusively. we will look at any business we think can bring about substantial community benefits. i want to talk about what type of loans we make and whatever products we have. that is important to note that in our case, they mentioned -- i mentioned some acronyms. the service corps of retired executives, women's business centers, renaissance and entrepreneurs should here in san francisco, women's initiative for self-employed -- those organizations offer classes often and one-on-one counseling. in some cases, whether or not you are seeking a loan -- in our case, and rising is strictly tied to a loan. we are a financial institution. but if you come to us for a loan

and we think there is potential for one, we will provide business advising as well as a loan. to give you a sense of who we reach, we are really seeking to lind to traditionally underserved communities. for example, 35% of our borrowers are hispanic or latino. 22% african-american. 60% free mail, and 30% immigrant. -- 60% female. types of businesses -- we will make loans as small as $500 and as large as $100,000. they can range from home-based very small businesses like child care, people selling in the flea market, on up to janitorial, landscaping, restaurants, dry cleaners, and in some cases, small manufacturers. we sometimes bridges of it in even larger transactions if we

think there's community benefits, we might wind collectively with the city's working solutions fund or with another lender. so far, -- and we work throughout the bay area. we work in four bay area counties, said francisco obviously being one of the importance, but also said the clara, san mateo, alameda. we have laid out over $15 million to bay area businesses with a medium loan size of about $7,000 -- median loan size of about $7,000. who do we work with? principally, we want to work with businesses that have at least one year of sales history. we will look at start of businesses in the case with there is significant industry experience and significant owner injection or investment into the business, but if someone comes was without experience and without capital to invest, we will recommend that they go through a training program and go get some experience before we would be able to lend to them,

and that is a fact. we have got to get our loans repaid. we have to maintain a strong portfolio. we are now actually working with the sba. they are one of the sources of our loan capital along with banks like wells fargo, and all of our capital providers want their money back. we make loans, i mentioned, as small as $500, up to $100,000, and we make them at an 8% fixed rate with no prepayment penalty. terms of up to seven years, depending on the amount and purpose, and we look at the client's existing income, but we will take into account the global household financial picture. we will actually looked beyond tax occurrence. that is one of the things we can do as a non-regulated lenders. we are able to look at cash- based businesses in some ways that would be difficult for a

larger financial institutions. in terms of lending based on projections, we typically do not lie on -- rely on projections, but unless is a contract that has been awarded. we're really looking at what actually you already have in the household. in terms of credit, we want to see that your credit is currently in good standing, but a mix credit history is ok. that is another way we might differ from a more traditional lender. we want to see that currently, you have no unpaid tax liens, child support, or judgments. we have no automatic credits for cut off. we are more interested in the substance of a client and where they are today. if you have no credit within credit, we can work with that. a portly, and you will hear this from all small business leaders, and it is something to get in your head now, all of our loans are personally guaranteed by the client. we are not using or reporting business credit. we are relying on personal

guarantees and personal credit. that is just what is going to happen at the end of this $100,000 on down and of the lending market. in terms of process, we can turn a lone run in five to 15 days depending on the amount -- we can turn alone are around. one thing i want to midget before we hand it over is that we have a new program to focus specifically on green lending. we had a large investment recently by jp morgan chase into our loan fund. we are looking for businesses that are looking to put in more energy-efficient equipment or retrofit or remove toxins from processed here we have been lending to drive cleaners that are giving you more environmentally friendly products, truck drivers putting in new exhaust systems. finally, just to give you kind of a scale of what we do, mark mentioned the sba right guaranteed 275 loans in a year. we expected to 50 or 60 in san

francisco this year, and more like 250 or 300 throughout the bay area. if you are hearing something interesting and you want to talk, the dominant in the purple suit has been handing me question cards out. >> i am the ne community federal community union. we are like a bank except we are nonprofit. we are 501 c 14. we are insured up to 250,000. we build credit. what we do a lot is one-on-one counseling. we are also a part of the bank of san francisco, so we do pay

their lending -- payday lending. we help people build up their credit before helping them to get a bigger loan amount. especially people who want to start a small business. credit unions offer micro loans. we do a lot of micro loans up to $50,000. this is -- we check credit. we need a business plan. then we look at the three-year tax return and that statement. we do a lot of home care and mom-and-pop shops. we also do start ups.

we asked for approval through documents. we work a lot with people who do not know how to file taxes properly. we are mainly focused in san francisco. we are small. we focus mainly on the tenderloin, chinatown, bayview, visitation. we do a lot of expansion. people start small through the credit union and then want to go to the bank. we know we are limited. we cannot afford to give out a big loan. starting from the credit union, we educate them about filing taxes properly and then moving on to the bank, a small one,

expansion, and we work with the bank. the bank and credit union are similar. we do allow tax returns, projections. credit unions do not charge an additional loan or processing fee. processing time, on a small loan, -- consumer loans probably a few days. because we require a business plan, sometimes it takes longer. business plans take a while. especially bank statements. we need to see consistent income coming in. so far, a credit union

delinquent rate is quite low because we are working with a client. we want to keep that low and as part of our mission. there is no application fee. if you are interested in an application or information, i have brochures, or you can give us a call. >> thank you. next is marked with wells fargo. >> hello, i work for wells fargo bank. i cover the northern california region. i usually focus on about $350 -- $350,000 of sbe loans. last year, for 2010, i did 43 loans. so we are lending.

i usually focus on six different types of loans. start-ups, business acquisitions, real estate purchases with ti's, working capital, a partner buyouts, business expansion. when i am looking at a potential loan, i use the standard five c's of credit. the first one is character. what we are looking for is a minimum score around 640. we would like to say no recent bankruptcy foreclosures, bankruptcies, tax liens. if we see a loan that has been modified, we would like to see a reason it was modified, what ever reason it may be. it cannot be, i did not want to pay that payment any more.

the second c, conditions. basically, how precise will the money be used? we are looking at a business plan. when you look at a business plan, that is just a start up. we are looking to see where there will be the need for lending. if you are an existing business, we want to see the money that we give you goes to the growth of your business. the third c is capital itself. basically, how much of yourself had the-- how much capital haveu invested? if you are a startup, and generally, 30%. if you are an expansion, you are looking to expand your

restaurant, that is generally around 20. the fourth c is capacity. capacity is pretty important. that is the ability to repay your loan. if we are going to be looking at a debt service, we look at a percentage of 1.25. for start-ups, we like to see startups near 1.25, generally closer to 1.5. the fifth c is collateral. i will put it to you this way. on a startup, we like to say 25% to 30% in the form of cash or real estate that has fungible equity in it. a purchase of real estate will count as collateral. pretty much, at wells fargo, we have this process streamlined.

i am the front end. after i review the alone, i put it together, put it into underwriting. they will review the file and see if there is a loan file. then you have the of loan) who works with you through the end. so the average time for a 7a loan, which is my focus, about 35, 45 days. if there are other things that need to be looked at, 45 days to 60 days. we are preferred lending partner. we are able to approve a loan up front, close the loan, and then we go back to get the guarantee. i do not have the exact numbers. i should. i do not know how many loans we

did last year. it was a lot. i know we were the first lender -- i do not know, historically -- mark, maybe you can help me. wells fargo is the largest in dollar amount by the country and in california, and bay area. we are trying to do our part. we are easy to work with. i have been doing this for four years now. i am pretty good where i can look of something and realize if we can help you out. if we cannot, i look for the micro guys to help me out with the smaller loans. it is a collateral loan that we cannot do, i do what i can. we are here to lend. >> thank you. hopefully, people have their question cards. i am going to open it up to the audience. if you have written a question

down, please give it to us so we can start compiling them. if i see a repeat questions, it will help to expedite the process, answering those questions that people want answered. we have some of the best and brightest minds here. don't be shy. if you could do us a favor and use the microphone so that everyone can hear your question. >> you had mentioned about assistance in public contracting. for small companies, one of the issues is bonding. what do you do on that? >> for all public contracts, public agencies need to see that there contractors have bonding in order for them to demonstrate they can complete the contract. sba provides an insured bond

guarantee to those who do bonding to small businesses on public contracts. so there is an sba program on a maturity bonding, similar to what we do. it is a guarantee to be assured the in the event of a default, that is a guarantee. so there is a charity bond guarantee, structured differently than the sba guaranteed loan program. >> i am a big fan of marketing. let us know if you have a small business in there that we can patronize. thank you. -- in that area that we can patronize. >> i have a company here in san

francisco. like all small businesses, working for the city of san francisco is difficult. cash flow is a problem. invoices' get paid anywhere from 60 to 120 days. being cash for, i do not know how that would help me qualify for a loan, but it is a problem. so my question is, where do you go, if you do not have a lot of collateral, you do not have a lot of credit, have the you go about securing a line of credit? i have a lot of contracts for the next two years, but as my company grows, i cannot keep up with payroll. >> we have made loans in those situations. if you have contracts and can show us how they are going to be

paid, if your credit is good, we would certainly like to take a look at that. we do not currently offer -- i should be careful. it is on and off whether we have a true line of credit. sometimes it can be structured in such a way to meet your cash flow needs, we can disperse it over time, allow you to pay it down. we have brochures back there. i encourage you to talk to us. >> let me add on that. over the last several years, a lot of small businesses have relied on their personal credit as a means to support the business. also, they relied on home equity lines of credit, which in many cases do not exist anymore, also as a source for financing their business. as far as doing public contracting, one thing about

public contract in that you can count on is the city of san francisco will stay in business and pay its debt, just later than you would like it to be. when you're doing public contract thing, if you will, cash cycle -- when you do the work and when you get paid is something you have to factor into your understanding of capital needs. so you have to figure that into the process. usually, that is figured into the pricing. but it is also the case that would you also probably need is a line of credit. depending on whether you feel your credit situation is where you want to go to a bank like wells fargo or another regulated bank, and line of credit, or work for a working- capital type of loan, which is

something you look to do, the opportunity fund. you probably want to try both avenues. as far as your credit scores, everyone realizes, everyone here has a credit score. the first thing any lender will look at is your credit score. after looking at that, they all do not do the same thing with it. an opportunity fund will look at your story in addition to your score. some are limited to your score, that if it is above or below a certain threshold, and they are may not work with you. not every one of the lenders is going to see your situation the same, so you should be shopping. >> [inaudible] >> you can do contract

financing. that exists. but a line of credit is probably what you're looking for. >> thank you, marc. i have a question from the audience about a burgeoning market. any avenues for san francisco medical cannabis dispensaries? open to the panel. >> in terms of financing? i can tell you what will be the licensing and zoning regulations, but i think i would turn it over to our financial institutions, in terms of -- in terms of the type of business that you would consider financing. >> we look at all kinds of business.

we always want to see a business plan. we want to see the cash flow. just like the lady before, you can have a good plan, but if you do not have cash -- good credit is always important. people sometimes have no cash or they may have a cosigner or partner that could help. >> opportunity fund is a 51 say -- 501 c nonprofit and we can make the bay area a better place especially for low and moderate-income communities. some of our funding sources, like the sba, certain kinds of businesses we cannot lend to.