There’s a certain something about local restaurants that big chains simply cannot hope to match. Maybe it’s the sight of a mother in the kitchen and a son at the cash register, the eclectic artwork on the wall, or the playful banter between customer and worker.
In these local restaurants, customers can see the dreams and vision of the owners—and the soul of the restaurant is unmistakably still there. Main Street Launch, a small business lender, is in the business of revitalizing that soul within the local business community and giving small businesses the ability to learn how to grow their small business in the Bay Area.
About Main Street Launch
Originally founded in 1979 to support the City of Oakland's loan funds, Main Street Launch (formerly OBDC) has transformed into an independently operated community leader while still being deeply connected to municipalities. Since branching off from the City of Oakland, Main Street Launch has undertaken an entrepreneurial spirit for all of its nonprofit ventures. Within the past 5 years, they have both expanded into the fascinating San Francisco market and into veteran-owned businesses.
Often when small businesses approach banks, they are not considered loan-worthy; large banks will not undertake high-risk ventures in order to make a modest profit. That’s where Main Street Launch comes in.
Filling a wide gap in the market, Main Street Launch provides small loans (up to $250,000) to small businesses, often in food/beverage or retail, so they can have the capital to open their doors.
Through this loan process, Main Street Launch has closed over $41 million in loans to over 600 businesses in the last 10 years. That equates to over 2,600 jobs in the local community!
The most amazing part of Main Street Launch is that despite their low rate of turning down clients, they have experienced a default rate of less than 1% over the past year. Historically, the default rate is less than 5%. This is especially amazing considering nearly half the businesses they support are in the food industry.
Restaurants are notoriously volatile and have low margins. While large conglomerates like McDonald's rake in enormous revenues, solitary restaurants often find it hard to survive. These statistics are a testament to how Main Street Launch isn’t merely an organization that provides loans — they really are along for the ride with businesses. Main Street Launch has a relationship manager that first works with the businesses to see how much funding is needed.
Small businesses tend to underestimate the amount of capital needed to open their doors, often undercutting inventory costs, unexpected expenses, and other essentials. Taking too little capital could potentially cripple a business during the most important part of its lifecycle. But figuring out loan amounts is only a small part of the services that Main Street Launch provides.
They also offer in-house business consulting services. While the whole of Main Street Launch’s business is impactful, the veteran program especially piqued my interest. I sat down with Katie Taylor, a marketing manager from Main Street Launch. We talked at length about how the veteran’s program came into existence and where they plan to take it from here.
The entrepreneurial spirit of veterans
The most amazing statistic she shared with me was that 1 in 10 businesses in the United States is veteran-owned. Veterans make up 6.9% of the population which means veterans are more than 40% more likely to start businesses than non-veterans. Main Street Launch, taking note of the entrepreneurial spirit of veterans as well as the veteran unemployment problem, thought they could kill two birds with one stone.
Veterans, more than anyone else, could understand the talents and experiences of other veterans, giving them a higher propensity to hire other veterans. Upon the inception of the veteran’s program, they hired Noah Harris, an Army veteran. Harris was previously Director of the Veterans Business Outreach Center. He has deep experience offering development support for veteran-run businesses.
The bigger picture
While statistics are useful for telling a story, I find the journeys of all the businesses that Main Street Launch has helped paint a better picture of Main Street Launch’s vision. Focusing on the veteran’s program, I asked Katie to share some of her favorite success stories from the veteran-run businesses funded by Main Street Launch.
One business, Nido, Spanish for nest, is nestled in the Jack London neighborhood. The restaurant is known for its Latin American food with original family recipes. The owners, Cory and Silvia McCollow, heard about Main Street Launch from one of Silvia’s former employers, Dominica Rice, owner of another Main Street Launch funded restaurant called Cosecha in Old Oakland.
Cory is currently serving in the Coast Guard and spends his free time helping his wife, the restaurant's head chef. Main Street Launch gave them $147,000 to take the restaurant to the next level. It's exceptionally fitting that Nido’s partnership with Main Street Launch highlights both their goals of community development.
In a promotional video on Nido’s website, Silvia says she “would not want to open anywhere else” but Oakland due to its “wonderful sense of community." Silvia also voices her concerns over the fact that Oakland gets a bad rap from national media, an image that Main Street Launch, Nido, and other local restaurants want to break.
Dominia Rice | Photo Credit: Cosecha
In order to continue this string of successful veteran ventures, Main Street Launch recently launched a new 10-week training program called FastTrac. It's for veterans who are interested in starting a new business. The program includes different workshops and speakers aimed at refining veterans' business ideas into something realistic, viable, and profitable.
Katie likened the first few minutes of the program as “the first day of school” because the room was silent and there was a kind of nervous energy in the air. After the first 10 minutes, Katie described witnessing an “incredible camaraderie” develop as the participants realized they were in a room filled with people similar to them. As the program continued, the veterans continued to build connections and new ideas, culminating in a final showcase of all the business ideas they developed.
Today, Main Street Launch train doesn't seem to be slowing down at all. They’ve built an incredibly sustainable and well-funded business model. Main Street Launch not only receives interest and repayment from the businesses they fund but also is supported by donations from large banks such as Wells Fargo and Bank of America. Keeping strong partnerships with local municipalities continue to be a priority for Main Street Launch as well.
On September 10th, 2015, they won a $1.75 million grant from the Community Development Financial Institutions Fund. The grant is a testament to the work they’ve done over the last 36 years. Ultimately, Main Street Launch's success is a result of their business model that not only ensures their own stability, but also the lasting success of the dreamers and entrepreneurs they support.
Localwise is proud to call Main Street Launch a partner organization.