OAKLAND, Calif. – Susana Cabrera, an entrepreneur and a mother of six with a fluctuating credit score had difficulty landing conventional financing to open her own business. But a state loan guarantee administrator in Oakland and a social impact lender in San Diego partnered to close the capital gap, allowing Cabrera to achieve her dream.
This March, Cabrera opened a franchise store with Everytable, a healthy meal preparation chain based in Los Angeles County. She completed two years of training through Everytable University which provides business training and ownership opportunities to entrepreneurs from marginalized backgrounds while they work as store managers. At the end of the training period, managers can apply through the company’s Social Equity Franchise Fund program to own and operate an Everytable storefront and can take advantage of relatively low-cost loans.
“It feels surreal. I worked so hard for this,” Cabrera said. “I feel blessed.”
“Women need to hear the immense opportunity there is for them as business owners.” — Susana Cabrera, owner, Everytable franchise, Inglewood
The Everytable franchising deal is among 30 investments Mission Driven Finance in San Diego has made in the past year supported by state small business loan guarantees from Nor-Cal Financial Development Corporation in Oakland. Nor-Cal, one of seven state-administered financial development corporations around California, connected with Mission Driven Finance through partners working on other inclusive investment funds. Nor-Cal and Mission Drive Finance discovered an alignment of values and mission.
“We felt very comfortable with the underwriting focus and the fact that Mission Driven Finance saw personal guarantees and credit scores as barriers to prevent capital access for underserved communities,” said Byron Phillips, Nor-Cal’s executive vice president. “We were also impressed by the fact that they were not only looking at the capacity for repayment, but the willingness to repay.”
“We are fortunate to have a partner like Nor-Cal FDC to secure a state loan guarantee for a novel approach like Everytable’s social equity franchising,” said David Lynn, co-founder and CEO of Mission Drive Finance. “Together, we can disrupt the conventional franchise model and offer low-to-moderate-income entrepreneurs and entrepreneurs of color a better chance at ownership – a powerful tool to spur generational wealth.”
Nor-Cal and the network of financial development corporations operate under the California Infrastructure and Development Bank, or IBank, providing guarantees on financing for eligible small businesses and nonprofits. The program is particularly focused on assisting businesses that operate outside of the economic mainstream, including those owned by people of color, women, veterans, and people with disabilities.
Nor-Cal FDC Executive Vice President Byron Phillips assists lenders such as Mission Driven Finance in providing state loan guarantees for eligible small business owners. (Photo courtesy of Byron Phillips)
The longstanding state Small Business Loan Guarantee Program helps California small business owners and entrepreneurs qualify for capital by backing up to 80% of financing from banks, credit unions, or community development financial institutions, up to a maximum of $5 million for financing that otherwise may be denied by lenders due to lack of collateral, minimal credit histories and other issues. Nor-Cal is unique in that it does not always require personal guarantees on financing in order to approve a state loan guarantee.
“Securing a state loan guarantee is huge. That Nor-Cal FDC backs community-centered entrepreneurs without requiring personal guarantees is a dream,” said Louie Nguyen, chief investment officer at Mission Driven Finance. “I am grateful for this partnership.”
Mission Driven Finance, founded in 2016, aims to make positive social change through impact investing, which involves deploying capital in creative ways to enable and encourage positive social change, allowing investors to see both financial as well as social and/or environmental returns. The company works with local and national investors to help them create the impact they want and with businesses and partners in underserved communities to help them get the capital they need. The Everytable Social Equity Franchise Fund is managed by Mission Driven Finance. Funding came from several foundations, CDFIs Reinvestment Fund and Community Vision, and a guarantee from the Community Investment Guarantee Pool.
Mission Driven Finance’s community-centered approach to lending looks at the bigger picture beyond credit scores. Loan applicants are asked to provide their business model, financials, and impact goals related to ownership, workforce and/or the community. As of March 31, 2024, Mission Drive Finance supported 180 small businesses and nonprofits. In February, the organization announced that $5.2 million lent to 26 nonprofits during the COVID-19 pandemic with seed funding from the San Diego Foundation and Alliance Healthcare Foundation saw less than 0.1% default rate.
Everytable operates 52 stores around Southern California with a mission of providing locally sourced, fresh-cooked nourishing meals at a lower cost for delivery or pick up. Prices start at $7 and are based on the median income of each store’s ZIP code. This means a salad in an affluent area may not cost the same as in a less affluent neighborhood.
Everytable’s products and programs have been covered by the Los Angeles Times, Business Insider, National Geographic, Food & Wine, and other outlets.
Cabrera’s store in Inglewood employs three staff members and offers a menu for pick up or delivery. Customers choose from a variety of hot meals like lemon spinach alfredo, backyard BBQ chicken plate and Thai red curry with veggies, as well as sandwiches, wraps, salads, breakfast items, desserts and healthy drinks. Cabrera aims to open a second store in the future once her current location is established.
“Without the guarantee, this opportunity would have had more hurdles than needed.”
Cabrera previously worked as a hot dog street vendor for five years in downtown Los Angeles and worked in the fast food industry. She learned about healthier eating from a former nonprofit Everytable launched by Everytable founder Sam Polk. Cabrera began noticing the impacts of unhealthy diets in her community and felt inspired to make a change. In 2016, she became an employee of Everytable and worked out of a different store before moving to the Inglewood location with the intent of owning it.
“When I found out the path to [Everytable] ownership, I said, ‘yep, that’s what I want to do,” Cabrera said.
For Cabrera, the loan guarantee, financing and other support she received from Nor-Cal FDC, Mission Driven Finance, and Everytable are validation that she is on the right path. “It’s been a big deal,” she said. “It has helped me strengthen my mindset.”
"Susana is dealing with the issue of food deserts in economically challenged communities,” noted Sanford Livingston, Nor-Cal’s chief executive officer. “We are proud to support the lender to be able to provide the capital by helping them to meet their underwriting criteria with the synthetic collateral. Without the guarantee, this opportunity would have had more hurdles than needed to help service her community."
In addition to pursuing her goals as a franchise owner, Cabrera wants to serve as a motivational speaker and inspire others who are living through similar difficulties.
“Women need to hear the immense opportunity there is for them as business owners,” Cabrera said, “[and] not to be afraid to navigate the financial world and the growth they will gain by stepping up. I would love for women to see that is possible. Especially for minorities, there are not many women representing us and being loud about it too. I want everyone to know there are financing companies like Mission Driven Finance that are in the community's best interest.”
(Mission Driven Finance provided no compensation for any testimonial or endorsement.)
(Photos of Susana Cabrera and Everytable courtesy of Susana Cabrera)