Often times, the most affordable small business loans require a small business to put up collateral. Our content partner Nav explains why collateral matters so much in small business lending and details what kind of collateral lenders consider.

Here on our blog, we share the most relevant and informative content for small business owners.  We’re proud to share this article from our partner Nav.com.

Bank loans are usually the least expensive way to finance a small business. However, it is not easy to get a bank loan as banks have strict standards for lending. As a general rule of thumb, it can be said that banks always demand the borrower to put up collateral for a loan. [Editor’s Note: It’s not explicitly mentioned here, but banks typically want the loan to be fully collateralized. Namely, if you are borrowing $100,000, you need to pledge $100,000 of collateral as appraised by the bank ] The only exception to this rule is for clients who have a long-term relationship with banks and whose business has proven to be profitable over a multi-year period.

So collateral is important for banks as it reduces their risk. If the business is not able to pay back the loan, a bank may decide to take ownership of the collateral that has been pledged to them. The documents that you sign when you got the loan will allow the banks to do this. Usually the banks will not take ownership of collateral when you miss an interest payment or one of two repayment installments but they will once the bank feels that their loan is at risk.

Banks in general prefer to have collateral that they can easily convert into cash such as deposits, cars and real estate. Their advance rates against these assets will be higher than against inventory or receivables, which are much harder to convert into cash.

Banks will make their own assessment on the value of collateral— the banks consider the fair market value of an asset which might be much different (often less!) from what the business owner has paid for it. Therefore, it might be wise to have an independent appraiser give you an estimate on the value of your asset prior to going to a bank.

The advance rate is not fixed and fluctuates depending on the asset. So how much would you be able to get?

Clearly the best collateral for a bank is a cash deposit or cash savings. They will advance between 95% – 100% on this form of collateral since it is a very low risk for a bank. The bank should be able to give you very favorable terms for a loan based upon cash collateral. The disadvantage for the business owner is that in case of a default it is very simple for a bank to take ownership of the cash. Moreover, you will not be able to use this cash as long as it serves as collateral for the banks.

Investments such as bonds or shares portfolios can also serve as collateral. Usually the advance rate is lower than for cash as the value of shares and bonds fluctuates. This form of collateral is only used by large banks as smaller banks lack the sophistication to value bonds / shares.

Probably the most commonly used form of collateral is real estate, either a residence or a commercial building. Advance rates vary greatly depending on the quality of the real estate, location and marketability. Before the recession, banks were eager to advance up to 100% of the value of a residence either through a first mortgage and/or a home equity loan. The crash of 2008 and 2009 made clear that the value of real estate can decrease quite rapidly, which resulted in large losses for the banks. Now, in general, banks are much more conservative and will advance up to 70-75% of the value through a mortgage. Through home equity loans you can increase this advance rate somewhat. The same advance rates basically apply for commercial real estate, although in this segment location is even more important, and banks will consider the credit quality of the tenants.

Cars are a good source for collateral. Credit unions have specialized in lending against cars and offer favorable terms. It is not uncommon that, for people with good credit ratings, a credit union will finance up to 100% of the value of the car at very(!) competitive rates.

Finally a very common form of collateral for small business is inventory and receivables. The advance rates on these assets vary greatly. With respect to receivables, banks will always exclude receivables older than 90 days and receivables to related parties such as the owner. Average advance rates of the eligible receivables will vary between 60% and 70%. With respect to inventory, banks are very conservative as they realize that they are usually not able to assess the value. Advance rates are around 50% – 60%, but could be even lower.

Documentation of the collateralized loan should not take that long as banks use standard documentation. What can take long is the appraisal of the underlying assets. Discuss this with your bank.

One last point: there is a relationship between the term of the loan and the underlying collateral. Short-term loans (less than 2 years) are usually covered by inventory/receivables and cash, medium-term loans (2 – 5 years) are covered by real estate or cars. Real estate is the best collateral for a long-term loan (> 5 years).

While talking to the banks about collateral, you have to keep in mind that the banks want you to have skin in the game. The first loss of a business should always be for the shareholder. Nevertheless, I encourage you to talk with banks or credit unions, as their rates are usually so much better than the rates of alternative lenders.

This article originally appeared on Nav.com and was re-purposed with their permission.


Opportunity Fund is California’s largest and fastest-growing nonprofit lender to small businesses. Last year, we made $37M in loans to help more than 1,800 small business owners invest in their businesses.  Opportunity Fund invests in small business owners who do not have access to traditional financing. As a founding member and signatory to the Borrower’s Bill of Rights, we believe in the important role small businesses play in our community and the economy, and we aim to help owners financially succeed.

Visit us online at opportunityfundloan.org and follow us on Facebook and Twitter

When small business owners need cash fast, Merchant Cash Advances (MCAs) seem like a good solution. Read about how MCAs will actually drag your small business under and how our EasyPay loans can pull your business out of debt.

What is a Merchant Cash Advance?

Merchant Cash Advance (MCA) is one type of alternative lending available to small business owners. These advances are not classified as loans because the MCA company offers a cash amount upright that is repaid through a percentage of future debit/credit card transactions. Think of an MCA as a payday loan for businesses.

MCA appeals to many small business owners because they can get an advance approved quickly, without collateral backing, and even with bad credit. This type of lending is also appealing because the payment process seems flexible — daily deductions from sales rather than fixed monthly payments.

Why Merchant Cash Advances Are Bad For Small Businesses

Although MCAs may seem like a good solution for immediate financial need, the cost of hidden fees and tricky wording simply isn’t worth it. Take a look at this colorful infographic that illustrates how MCAs are bad for your small business in the long run.

Merchant Cash Advance Infographic

See visually how MCAs drags your business under and how Opportunity Fund can help. (Image courtesy of Ashlyn Smith)

How Opportunity Fund’s EasyPay Program Helps

Opportunity Fund’s EasyPay loan program provides an easy-to-get, affordable alternative to expensive Merchant Cash Advances. With an EasyPay loan, small business owners like you can get a loan from $5,000 up to $100,000 for working capital and refinancing your current MCA.

  • Unlike MCAs, EasyPay takes a more affordable percentage of your monthly credit/debit card receipts.
  • Reduce your APR from over 80% down to 15% on average.
  • No hidden fees or pre-pay penalties, with only a 5% loan funding fee.
  • Reduce your monthly payments by up to 75%.

If you currently have an existing MCA, Opportunity Fund can help refinance your balance with much lower payments and lower interest rates. As a responsible lender dedicated to helping small business borrowers succeed, we make sure you can comfortably repay the loan, maintain positive cash flow, and maintain good credit.

For information about Opportunity Fund’s small business loans, please contact us at 866-299-8173 or loans@opportunityfund.org.  For questions about your existing loan or other customer service questions, please contact us at 866-299-8173 or sbhelp@opportunityfund.org.


Opportunity Fund is California’s largest and fastest-growing nonprofit lender to small businesses. Last year, we made $37M in loans to help more than 1,800 small business owners invest in their businesses.  Opportunity Fund invests in small business owners who do not have access to traditional financing. As a founding member and signatory to the Borrower’s Bill of Rights, we believe in the important role small businesses play in our community and the economy, and we aim to help owners financially succeed.

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Business owners are often asked to sign personal guarantees when they borrow or get terms from vendors for their business. It’s frustrating, but try not to take it (ahem) personally.

Here on our blog, we share the most relevant and informative content for small business owners.  We’re proud to share this article from our partner Nav.com.

Here’s what you need to know about personal guarantees from lenders and vendors:

Lenders and vendors often require personal guarantees (also known as “PGs”) from businesses that are young, as well as those that lack strong business credit scores and/or solid financials (such as sufficient income or cash flow). If you think about it from their perspective, they are taking a risk by providing goods or services without getting paid up front, and they know that business owners who provide personal guarantees are more likely to pay those bills.

Personal guarantees are not ideal, but are sometimes necessary. In the early stages of your business, you may have no choice but to agree to one. Note that just because you sign a PG does not mean the loan or account will automatically affect your personal credit reports or scores. Most commercial accounts do not appear on personal credit reports unless the borrower defaults. However, there may be an inquiry on one or more of your personal credit reports if the lender checks your credit. Inquiries have a small impact on credit scores–usually in the range of 4 to 7 points–and only affect personal credit scores for one year.

A personal guarantee means that you are personally responsible for the debt if your business does not pay it. For that reason, you do want to use them strategically and selectively. You should feel confident that your business can financially handle the debt. If you don’t, then it may be a sign you should look for other opportunities to grow your business. Business credit should help your business grow; it can’t save a business that is not going to make it anyway.

What You Can Do

Build strong business credit scores. This is the single best way to get away from personal guarantees. If you have not begun that process, get a free account with Nav and follow the steps outlined in the free Business Launcher tool available to all members.

If your business already has a strong commercial credit history, ask to speak with a credit manager and explain the situation. You may be able to get a waiver of the personal guarantee. You can check your business credit ratings for free at Nav.

If you do not want to provide a personal guarantee, be sure to check the lender or vendor’s credit policy before you apply. The credit application will usually indicate if one is required. If it’s not clear, ask.

Don’t shotgun your applications to multiple lenders in hopes of finding one that won’t request a PG; doing so can result in multiple inquiries on your credit reports, which in turn can hurt your credit scores.

This article originally appeared on Nav.com and was repurposed with their permission.


Opportunity Fund is California’s largest and fastest-growing nonprofit lender to small businesses. Last year, we made $37M in loans to help more than 1,800 small business owners invest in their businesses.  Opportunity Fund invests in small business owners who do not have access to traditional financing. As a founding member and signatory to the Borrower’s Bill of Rights, we believe in the important role small businesses play in our community and the economy, and we aim to help owners financially succeed.

Visit us online at opportunityfundloan.org and follow us on Facebook and Twitter

Maurice Brewster built his transportation company into an elite transit provider thanks to a small business loan from Opportunity Fund. Mosaic Global Transportation is on the road to bigger and better things.

Our customers inspire us every day, and we want to regularly share those stories to inspire you, too. This week, read about Maurice Brewster of Mosaic Global Transportation in Redwood City. If you’re an African-American entrepreneur, you know how hard it is to get the capital to grow your business. That’s why you need to know about Maurice.

Driven to Expand

According to a Wall Street Journal article that appeared in March of 2014, the rebound in federal small business lending, the first such rebound since the financial crisis, has largely passed black entrepreneurs by.  Two years after that article was written, things haven’t improved very much.  More than six years after the financial crisis, African-Americans have suffered the largest decline in SBA funding and are still looking for loans to help them stave off deeper financial hardship.  Maurice Brewster was one of them.

His company, Mosaic Global Transportation, a limousine, sedan and shuttle business located in Redwood City, California was stagnating because of a lack of financing.  Although the 12-year-old company had 44 employees and was providing transportation to corporate clients in more than 450 cities, the business could be doing much better with the capital to expand.

Mosaic Global Transportation Staff

Maurice Brewster leads his staff at his thriving transportation company

“Initially, I was putting all the profits back into the business,” Maurice said of his decision to bootstrap the company, a common small business strategy.  He managed to create a little breathing room and his company started turning a profit again in April 2013.  With sufficient funding, Maurice thought the company could “double in size in a year or two.”  But in December of 2015, Maurice’s application for a $250,000 loan was rejected by his bank, citing insufficient collateral and no profits for several years.

A Fresh Perspective

Opportunity Fund looks at lending in general—and Maurice specifically—a little differently.  So they started Maurice with a small $15,000 to get his credit history established and jump start the business. Maurice did the rest. During Super Bowl 50, his company was named the Official Transportation Provider for the Host Committee.  He has also expanded his employee shuttle service at Google.

Maurice Brewster

Maurice is all smiles thanks to his successful business

From Opportunity Fund’s perspective, Maurice already had established a profitable business with collateral “on wheels” for the loan.  And he proved us right, as have so many of our loan recipients. Which just goes to show, when you invest in good people, there’s no telling where they can go.

We hope this story has inspired you, too.  At Opportunity Fund, we offer easy-to-get, fast, and affordable small business loans to help small business owners succeed.  Visit our home page to find out more.


Opportunity Fund is California’s largest and fastest-growing nonprofit lender to small businesses. Last year, we made $37M in loans to help more than 1,800 small business owners invest in their businesses.  Opportunity Fund invests in small business owners who do not have access to traditional financing. As a founding member and signatory to the Borrower’s Bill of Rights, we believe in the important role small businesses play in our community and the economy, and we aim to help owners financially succeed.

Follow us on Facebook and Twitter

Our lending experts are here to answer your toughest questions about small business financing. For a small business owner, credit can make or break their chances at success. If you’ve ever been confused about credit, you’re not alone. Here’s what you need to know about credit reports.

Many people think they can’t understand credit. Libby Morris, Senior Operations Director at Opportunity Fund, shares her insights on credit and lending with this Q&A about credit reports.

Q: How can borrowers get their credit score and reports?

A: The best way to get credit information for free is annualcreditreport.com. Even though they don’t provide a credit score without an additional fee, borrowers can get important data.

Credit providers are mandated to offer a copy of the credit report they used in the approval or denial decision to all applicants.

Q: How can borrowers dispute inaccurate information on their credit reports?

A: Read the credit report line by line. Look for anything suspicious or inaccurate, especially for common names or family members with the same name.

Go directly to the credit bureau’s website to dispute any inaccuracies. The credit provider has a time frame to respond to a dispute. The credit provider can choose to respond and provide proof that the disputed information is true. Most of the time, the credit provider won’t respond. This is how a borrower can successfully remove negative information from their credit report.

Q: What are some resources borrowers can use to repair their credit?

A: The most efficient and direct way is to research each bureau’s resources for credit management. They have a real stake in meeting the needs of borrowers and they emphasize transparency.

Q: How does FICO score factor into the loan process?

A: Most lenders use FICO as the key factor on credit applications. Bankruptcies and late accounts like a phone bill can bring a FICO score down significantly. These things can cause most lenders to decline a loan application.

At Opportunity Fund, We use a borrower’s credit report more as a tool to better understand the customer than as the main factor in a credit decision.  We look at all the pieces of credit history and evaluate each one. If a late account somewhere in a borrower’s history seems reasonable, like collections from the library, we don’t use that in application process. We use a borrower’s credit report more as a tool to better understand the customer than as the main factor in a credit decision.

Q: What is the difference between a hard credit pull and a soft credit pull?

A: A hard pull shows up as an inquiry on a credit report. It can impact a credit score, especially for borrowers with thin credit. It tells a lender how often a borrower asks for credit. For example, a borrower buying a house might apply for 10 different lines of credit over 30 days. That has the same impact as if the borrower applied for five lines of credit over the same time period.

A soft pull happens when lenders inquire about credit without impacting FICO score. An example of a soft pull is a pre-approved credit card offer in the mail. A credit provider, like Capital One, pays Experian for a list of borrowers that meet specific credit criteria to create the soft pull.

Q: Credit information has a lot of jargon. How can borrowers find and understand key terms on their credit reports?

A: Each of the three credit bureaus—Equifax, TransUnion, and Experian—have definitions on their websites. Borrowers should take time to read through their credit report with the help of the definitions provided by each bureau.

Q: What are the differences between the three credit bureaus?

A: The main differences are based the data each bureau gathers. For example, a loan from Opportunity Fund might show up on a borrower’s Experian or TransUnion report. Each bureau’s reports should be accurate, but their data format or reporting dates can be different.

Q: What are some things that borrowers should know about the loan process in regards to their credit?

A: Borrowers should know that any lender will inquire on credit and most are very score-driven. The information in the credit report won’t matter as much as the score it creates. During the credit process, lenders have access to view your complete report and they will ask you questions. Borrowers can help themselves by already knowing the answers.

At Opportunity Fund, we require borrowers to personally guarantee their loans. This usually helps the borrower’s credit score, but if they inquire about an additional loan like a mortgage, a personally guaranteed loan on the credit report can make the mortgage officer reduce the amount the borrower might be eligible for.

A lot of business loans don’t show up on personal credit reports. Our mission-oriented lending is based on transparency in the small business lending world, as part of the Small Business Borrower’s Bill of Rights. We would like all business lenders to report on credit, because it would allow access to sustainable lending for all borrowers in general, but especially for small business borrowers.

For information about Opportunity Fund’s small business loans, please contact us at 866-299-8173 or loans@opportunityfund.org.  For questions about your existing loan or other customer service questions, please contact us at 866-299-8173 or sbhelp@opportunityfund.org.


Opportunity Fund is California’s largest and fastest-growing nonprofit lender to small businesses. Last year, we made $37M in loans to help more than 1,800 small business owners invest in their businesses.  Opportunity Fund invests in small business owners who do not have access to traditional financing. As a founding member and signatory to the Borrower’s Bill of Rights, we believe in the important role small businesses play in our community and the economy, and we aim to help owners financially succeed.

Visit us online at opportunityfundloan.org and follow us on Facebook  and Twitter

Get answers about some of the most common questions lenders will ask small business owners: credit, collateral, loans for your small business, and more.

Here on our blog, we share the most relevant and informative content for small business owners.  We’re proud to share this article from our partner Nav.com.

As the builder of a small business, you wear many hats and your success or failure depends on your ability to maintain confidence in your vision and do many things well at once.

As producer, one of your jobs is to raise money for the project. Successfully raising money means knowing what a potential lender will ask you before you commit to a meeting or lengthy application process. You want to get yourself and your business affairs in as much order as possible so that you can tell the lender all the things that he or she needs to hear to make up his or her mind about your potential as a borrower.

Here are six questions a lender will typically ask you.

1. How much money do you need?

While this question may seem obvious, it’s sometimes the obvious questions that prove most difficult to answer. A lender won’t ask you how much money you want—they’ll press you for what you need. Lending money is a cautious, prudent, conservative sort of business. Lenders want to see that, where finances are concerned, your business is the same. Ideally you should be able to show a lender that you’ve thought this question through to the last cent, that you’re borrowing only what you need.

2. What does your credit profile look like?

This one’s important because it can make or break whether or not a lender will even ask the next 4 questions. Depending on what lender you choose, they may pull both your personal and business credit reports or scores. If these are both solid, they’ll move onto the questions listed below. If you have derogatory marks on your credit report, they may ask about those as well.

3. How will you use the money?

This question is really about how you’ll use the money to build your business. If you need to buy a truck, for example, it won’t be enough to simply say you’ll use the money to buy a truck. You should be able to explain how a truck is integral to your small business.

Here, lenders are looking for an answer that will assure them that you can pay back the loan. For example, “working capital” or “expansion/growth opportunities” are good answers to this question—they ensure the lender that their investment will increase your revenues. Loan requests for “repaying old debts,” on the other hand, will likely be rejected.

4. How will you repay the loan?

Great question! You’ll repay the loan with the proceeds of your booming small business, of course. But a lender will need more assurance than that. They’ll want to see that you have enough assets, savings and personal collateral to (a) survive the ups and downs of business life and (b) still repay the loan. They may ask if you have current or past loans, any outstanding business debts, and they will likely want to take a look at your previous business or personal tax returns.

5. Does your business have the ability to make the payments required under the loan?

For an existing business, proof of solid cash flow sufficient to the terms of the loan will go a long way towards securing the loan. A lender may ask to see a balance sheet and profit and loss statement from the previous year. A new business owner’s best bet is to show that they’ve been profitable in a comparable business venture in the past, or have a strong expertise and have done their research in the particular industry of the business.

6. Can you put up any collateral?

Collateral is something (such as a house or inventory) you pledge as security for the loan in the event that you cannot repay it. If you don’t repay the loan, your lender takes the collateral. Collateral will be extremely important if you are hoping to secure a bank or SBA loan. Other alternative lenders may not ask for collateral, but they may ask for a personal guarantee on the loan. With a personal guarantee, you agree to be personally responsible for the debt if worse comes to worst and your business is forced to default. Unlike collateral, a personal guarantee is not tied to a particular asset, however it does put the business owner in a tough spot to pay back the loan should the business not pan out as expected.

To a small business owner just getting started, some of this may seem unfair. But it might help to put yourself in the lender’s shoes: thousands of people apply for business loans every day, and it’s impossible to predict a winner based on nothing more than a good idea and a business plan.

Happily, there are proven ways get ahead of the game before you submit loan applications. For example, you can build business credit and repair bad personal credit, as well as prepare the documentation listed above and proof of collateral. The more you read, research, plan and prepare, the better the chance that your vision for your small business will be recognized and supported by lenders down the road.

This article originally appeared on Nav.com and was re-purposed with their permission.


Opportunity Fund is California’s largest and fastest-growing nonprofit lender to small businesses. Last year, we made $37M in loans to help more than 1,800 small business owners invest in their businesses.  Opportunity Fund invests in small business owners who do not have access to traditional financing. As a founding member and signatory to the Borrower’s Bill of Rights, we believe in the important role small businesses play in our community and the economy, and we aim to help owners financially succeed.

Visit us online at opportunityfundloan.org and follow us on Facebook  and Twitter

Small business owners face many challenges in the day-to-day operations of their businesses. Perhaps the biggest one is staying organized while running the business. Our content partner Nav shares a piece from best-selling author Dave Crenshaw on how small business owners can break out of the cycle of clutter and chaos.

Here on our blog, we share the most relevant and informative content for small business owners.  We’re proud to share this article from our partner Nav.com.

Feeling a little overwhelmed at the thought of your messy workspace? You’re not alone. One of the biggest challenges in the life of the chaotic small business owner is personal organization. It’s funny how small business owners and entrepreneurs always manage to find something more important than getting organized. With hectic schedules there’s barely any time to slow down and face that dilemma. But letting that clutter take over can make life really chaotic, really fast. One little known fact about chaos: it’s contagious. It may feel like just one little unopened email here, or one piece of out-of-place paper there, but—before you know it—your entire workspace is infected!

I’m going to share with you five tips on how entrepreneurs can get and stay more organized. Or keep pretending there isn’t actually a desk under all that clutter…

Tip #1 is to make sure you have one Physical Inbox. What do you do with that one inbox? That is the place that everything that is unresolved – everything that is out of place – goes. If it’s out of place, put it in the box. In the beginning you might need a very big box. This tip will set you up very nicely for the last two tips.

Tip #2 is to have a Mobile Inbox. You’re going to be away from the office from time to time. People are going to hand you cards, papers, brochures, etc. and you need to have one place where all those things can be collected while you’re on the move. When you get back to the office dump everything from the Mobile Inbox into the Physical Inbox.

Tip #3 is to Create Homes. I adopted this phrase for my business clients: “Everything has a home and no visitors allowed.” A home is something that has walls around it – that creates a natural barrier between the things that are supposed to be inside of it and anything else. If you have clearly defined homes, when it comes time to put things away, you put it in a space that isn’t shared with all sorts of weird things. You know exactly where things belong. If you need to, you can even use a label for those homes. Get in the mindset that everything has a home—whether that home is a filing cabinet or a garbage can, get it there fast!

Tip #4 is Processing. This is a scheduled time every single week that is set aside to address your chaotic clutter. In this time, you go through all of your Physical Inbox, all your email, all your unorganized “stuff” and process it. Bring it to zero. How much time should you spend processing? I recommend five hours per week. And during those five hours, you’re going to take each item out of the inbox and decide:

  • What am I going to do with it?
  • When am I going to do it?
  • Where is its home?

Tip #5 is Processing. This tip is so important that I’m emphasizing it twice! If you have that regular schedule and you stick to that regular schedule, you’re going to be able to stay on top of everything. But, what most entrepreneurs do is they make that processing decision constantly throughout the day. They’re doing a little bit here and a little bit there – it’s all over the place – which can chop up your day. Instead, have a regular set time. Process, process, process! Pronto!

Dave Crenshaw works 30 hours per week or less, plays video games, and has plenty of time to spend with his wife and three children. He is also the master of helping business owners triumph over chaos. He has appeared in Time magazine, FastCompany, USA Today, and the BBC News. His first book, The Myth of Multitasking: How ‘Doing It All’ Gets Nothing Done, has been published in six languages and is a time management bestseller. As an author, speaker, and business coach, Dave has transformed thousands of businesses worldwide. To get free access to Dave’s online Time Management Fundamentals course on Lynda.com, please visit http://davecrenshaw.com/freetime

This article originally appeared on Nav.com and was re-purposed with their permission.


Opportunity Fund is California’s largest and fastest-growing nonprofit lender to small businesses. Last year, we made $37M in loans to help more than 1,800 small business owners invest in their businesses.  Opportunity Fund invests in small business owners who do not have access to traditional financing. As a founding member and signatory to the Borrower’s Bill of Rights, we believe in the important role small businesses play in our community and the economy, and we aim to help owners financially succeed.

Visit us online at opportunityfundloan.org and follow us on Facebook and Twitter

Get to know entrepreneur Ike Solano and Zyclefix, a growing Southern California-based bicycle brand that expanded so much after working with Opportunity Fund that they had to move into a new warehouse.

Our customers inspire us every day and we want to regularly share those stories to inspire you, too. This week, read about Ike Solano of Zyclefix, and get to know a growing Southern California-based bicycle brand that expanded so much after working with us that the business had to move into a new warehouse.

A Road Block to Business Financing

Ike Solano has been an entrepreneur for over 20 years. When he started bicycle brand Zyclefix in South El Monte, California in 2011, he had 19 years of experience in the shoe business. Once he switched gears to distributing bikes, Ike found a new set of challenges even as business was booming.

“Our biggest obstacle was trying to fulfill orders, so we needed the capital to purchase inventory,” he said. “The lead time between manufacturing and delivery is very long. We would receive our product, sell it, get paid, and then reorder more inventory, but it was just taking too long without extra capital.”

Zyclefix

The Zyclefix staff works hard to create custom bikes (photo courtesy of ROF Industries)

Ike looked for funding through the usual small business channels, including banks, Small Business Association loans, even his own personal credit. None of these options were right for Zyclefix, and that’s where Opportunity Fund fit in.

The Path to Success

Ike found Opportunity Fund via a one-two punch: a Google search and an outreach letter from his eventual loan officer, Adrianna Williams.

“It’s difficult to find financing without an organization like Opportunity Fund,” Ike said. “Before, we were told our business history wasn’t long enough or our business wasn’t big enough. Adrianna was able to help us and the entire process was very easy and pleasant.”

Thanks to the $45,000 loan that Adriana negotiated for Ike, Zyclefix has been able to keep up their worldwide distribution of products, including bikes, skateboards, and accessories—and to introduce some new products like hover boards and motorized scooters.

The loan helped Zyclefix solve its inventory problem. It may have worked too well, because the inventory grew so quickly that Zyclefix needed to move into a bigger warehouse to store and stock all the new parts and bikes they purchased with the loan.

Zyclefix

Zyclefix expanded inventory with a small business loan from Opportunity Fund (Photo courtesy of ROF Industries)

“We went from a 5,000 square foot warehouse to a 13,000 square foot warehouse within 6 months after the Opportunity Fund loan,” Ike said.

Since working with Opportunity Fund, Ike has grown Zyclefix to include a wider range of bicycles featuring high quality and accessible prices, like beach cruisers, road bikes, and aluminum trap bicycles. This growth has allowed Zyclefix to embrace a niche market of bikes and build it into a mainstream brand.

Ike highly recommends Opportunity Fund to small business owners in need of financing, and he will definitely call on us again if he needs easy-to-get, fast, and affordable funding to support the next phase of Zyclefix.

We hope this story has inspired you, too.  At Opportunity Fund, we offer easy-to-get, fast, and affordable small business loans to help small business owners succeed.  Visit our home page to find out more.


Opportunity Fund is California’s largest and fastest-growing nonprofit lender to small businesses. Last year, we made $37M in loans to help more than 1,800 small business owners invest in their businesses.  Opportunity Fund invests in small business owners who do not have access to traditional financing. As a founding member and signatory to the Borrower’s Bill of Rights, we believe in the important role small businesses play in our community and the economy, and we aim to help owners financially succeed.

Follow us on Facebook and Twitter

Opportunity Fund. Working Capital for Working People. opportunityfund.org