Microlending: Sara Razavi and Working Solutions - Microlending: Sara Razavi and Working Solutions
Microlending: Sara Razavi and Working Solutions
Working Solutions is the First to Believe in start-up and early-stage businesses by providing diverse entrepreneurs with affordable capital, customized business consulting, and community connections to increase economic opportunity in the San Francisco Bay Area. Run by and for entrepreneurs, Working Solutions understands the joys and the challenges of starting a small business. WE Source talked to their CEO, Sara Razavi, about the organization and its inspiring mission.
It was founded by Emily Gasner, a recent college graduate at the time, in 1999. She was mentored by Barbara Morrison of TMC Financing, a business lender, who recognized the need to serve communities with limited access to capital, especially through micro-lending. As CEO of Working Solutions, it was Emily’s first major job. After 20 dedicated years at Working Solutions, Emily is now a Senior Advisor to the organization.
I had been in the social sector for just over 15 years and was finishing my graduate degree. I wanted to apply my MBA to a social impact non-profit and discovered CDFIs (Community Development Financial Institutions). I felt like I could be a value-add and scale the organization. We’re focused on underserved, low-income communities, which often correlates with people of color who don’t have access to capital.
Most CDFIs require at least some revenue, but we are pre-revenue so as long as your paperwork is in order and you meet some other qualifiers, we can work with you. Being a micro lender with personalized consulting really differentiates us.
Sara Razavi, CEO, Working Solutions
A lot of what we do is to demystify the financials and the loan process-what does it mean to raise capital and how can you do it. We don’t have quotas, so we can spend time with a new business owner, even if it’s only a $5,000 loan. We make sure they are best prepared after this loan for an additional or larger investment. We also provide up to 5 years of business consulting after the underwriting. And we go through a regimented curriculum of business consulting. We call it a mini MBA, but it’s curated so the business owner can absorb it.
Each business has its own cycle, so we have in-house consultants and pro bono and low bono consultants for specific needs like legal issues, marketing, etc. Everything to make them successful and have founder survivability so they are not burnt out.
As a CDFI, our target is low-income individuals. Within that, we have an extremely high level of support for women. 60% of our current portfolio is women business owners, and we are looking to make that 70%. In the last few years, we deployed about 70% of our total dollars to women. 60% to communities of color, and of that 25% to African-American and 25% to Latinx entrepreneurs.
We are industry agnostic. We focus on early-stage businesses with fewer than 5 employees. They tend to be makers or in food-related businesses, such as restaurants, cafes, but also professional services, health and wellness, or transportation.
We’ve been able to scale while making the same impact and keeping our vision - making capital available to those that don’t have it and matching that with technical assistance. What we do is not unlike a Venture Capital (VC) model where we invest time and energy in a new business so that they can grow - just not at the scale VCs grow. Creating impact and scale at the same time is very energizing for me. Working Solutions has served over 750 businesses and we’re on track to serve 1,000 in the next two years.
Bank of the West has engaged with us in multiple ways—board membership, a community ambassador (a Bank of the West team member who worked on staff at Working Solutions for a full year), and grant capital. We’ve been a recipient of Bank of the West’s Community Reinvestment Act grants for operating support for the last ten years, and we are pleased to be the lead CDFI partner to Bank of the West. When the bank is unable to service a loan, we are a primary referral source and another resource for a business that isn’t bank ready. We’re really excited about working with Bank of the West because they are intentional about social impact.
While we specialize in early-stage businesses, if a business is new to debt - maybe they’ve been around a long time but need new capital to get to the next level - we can work with them as long as they are in the 9-county San Francisco Bay Area we serve. The majority of our referrals are from business bankers who can’t service the loan because it’s less than $250,000.
What has personally motivated me is that we are a shop of many entrepreneurs ourselves. When I realized that we were all business owners or raised by them, that was a big AHA moment for me. We take our own advice. Our own story is that of a small business that is growing and adding jobs. We hire and have a passion for entrepreneurs.
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All views and opinions expressed by the entrepreneurs interviewed are their own and do not represent those of Bank of the West WE Source, Bank of the West, or its affiliates.