Making little loans, financing big dreams
The shantytown in the middle of Harvard Square was beginning to attract attention.
Not just from the students and professors who had to walk by the structures every day, but from homeless people who lived nearby. Before long, several had moved into the shanties, where Eric Weaver and nearly 200 of his fellow students slept in spring 1986 to protest the Ivy League university’s business in South Africa, where black citizens were relegated to shantytowns and slums.
Weaver, at the time, was a longhaired activist who played guitar in a band called the Stickmen and studied liberation theology. He was never going to be “the man,” could never have imagined himself as an executive, a businessman, someone working in finance. But here he is. Weaver, now 52, is the founder and chief executive of a nonprofit microlender called the Opportunity Fund. He doesn’t quite see it as a contradiction.
He’s still not the man, he said recently. Or if he is, he added, he’s
more of a “do-gooder man.”
“It’s all about being intentional, being intentional with the work that you do and the people you seek out,” said Weaver, a nominee for the 2017 Visionary of the Year award sponsored by The Chronicle and the School of Economics and Business Administration at St. Mary’s College. “I own my own privilege and try to help people who have a different experience.”
Weaver, who came to the Bay Area from the East Coast as a graduate student, said he has had a unique understanding of his own privileges and the power of wealth since he was young. His father was a radically progressive economics professor who instilled in his children a sense of justice.
As an adult, Weaver said, he has dedicated his life to using those privileges to aid others, combat financial discrimination and enable low-income people to start their own businesses.
He founded the Opportunity Fund 24 years ago in San Jose as a for-profit venture spearheaded by banks. Back then, it was a one-man operation. Back then, it was just him.
“I never would have thought we’d get this big,” he said in a recent interview.
He still remembers his first loan: an aquarium store in San Jose started by two brothers who needed $17,000 to get off the ground. They put up their fish as collateral. More than 20 years later, Weaver said, they’re still in business.
In the early days, the Opportunity Fund averaged about 10 loans a year.
One time, Weaver said, he got called to a home in East Palo Alto where a woman wanted to borrow $500 so she could grow her business of making party favors for quinceañeras, a coming-of-age celebration for 15-year-old Latina girls.
“We didn’t even write loans that small, but we made it work,” Weaver said. “Fifteen years later, we got a call from a friend of hers. She’s running a very successful flower shop in Menlo Park. And she still talks about that $500 loan, about how she was a recent immigrant and someone took a chance on her.”
Today, the Opportunity Fund lends to about 2,000 small business owners annually.
It receives funding from big foundations, banks, donors and government grants. But since becoming a nonprofit, Weaver joked, the organization has also become highly profitable. It uses the money it makes to expand its lending activities.
Since its founding, the firm has provided financial assistance to more than 12,000 people and loaned more than $60 million. It has grown to have offices in San Francisco, San Jose and Los Angeles and is one of the largest microlending organizations in the country. This year, the firm will open field offices in three new cities: Fresno, Sacramento and San Diego.
Because the organization is a nonprofit, its goal isn’t to make a return on its investment but, rather, provide funds and opportunity to those who may otherwise be unable to start their own business due to socioeconomic barriers.
The Opportunity Fund deals in microloans, meaning less than $250,000. Quinceañeras aside, the minimum amount the firm will write a loan for is $2,600. Most of the loans the firm writes are for less than $20,000.
For Weaver’s clients, these small-dollar loans can be hard to get.
Most come from families that can’t afford to help them out. Many are starting a business for the first time. Some are immigrants. Some don’t speak English. About 90 percent of the fund’s clients are racial and ethnic minorities and about a third are women. Most — nearly two-thirds — are lowincome.
“Poor people are often perceived as being a riskier investment than wealthier people,” Weaver said. “Rightly or wrongly, that’s the perception. Even though low-income people are every bit as honest about paying off their debts.”
The organization doesn’t track how many of its business owners are lesbian, gay, bisexual or transgender because federal regulations don’t require those statistics in their annual reports and it hasn’t separately asked them to disclose that information, though Weaver believes his firm serves an outsize number of LGBTrun businesses.
A federal survey from 2015, the most recent available, found that most Americans had few assets and little savings that could be used in the event of an emergency.
Nearly a quarter of black households reported they would have $5 in assets and savings to put toward an emergency should one arise, according to a Pew Charitable Trusts survey.
When lending to smallbusiness owners, this kind of disparity comes into sharp focus, Weaver said.
“When we started, we realized our clients had very few alternatives when looking for money,” he said. “They could maybe get a subprime credit card or leverage an auto loan if their car was paid off, or they could go to a loan shark. They had few options and the ones they did have were all bad. That’s where we came in.”
Koji Kanematsu was able to open his own restaurant in 2012 thanks to an $8,000 loan he got from the Opportunity Fund.
A recent Japanese immigrant, Kanematsu had little credit history and few assets. He ran a food cart selling traditional seaweed-wrapped rice balls known as onigiri.
At a recent meeting at his Kearny Street restaurant, Onigilly, Weaver looked on as Kanematsu explained his dreams of turning his Onigilly company into a franchise — like Subway, he said, but with rice balls instead of sandwiches. Weaver beamed. Already, Kanematsu has opened four stores in San Francisco.
“Quickly, I learned that if you have a dream but no credit, your dream is nothing,” Kanematsu said. “It was so challenging to start, but once I found the Opportunity Fund it got a lot easier.”
“Quickly, I learned that if you have a dream but no credit, your dream is nothing.” Koji Kanematsu, who got an Opportunity Fund loan in 2012 to open a restaurant, now with four S.F. locations