SAN DIEGO (KGTV) — Pouring coffee beans into an espresso machine, Yan Yanez is in his element at his Old Town cafe, Flor and Seed.
It’s slated to open April 1, but the journey to get to that point is no joke.
“COVID came, I got fired,” he said. “And it was either we did something or we made lemonade out of what was thrown at us.”
Yanez hooked up with longtime friend Leo Nunez, and the two decided to bring Mexican-style coffee to San Diego.
They got the beans, the space, the equipment – but what they needed was a loan to get started. The problem – with their lack of track records, commercial banks weren’t biting.
“(Leo) asked Wells Fargo for money and Wells Fargo was like, well, I can’t give you money, but I know someone who could,” Yanez said.
The two were linked to Accessity, a nonprofit community development financial institution that lends to small business owners who may turn to big banks, either for lack of history or past credit defaults. .
Yanez and Nunez eventually borrowed $63,000 which enabled them to prepare Flor and Seed for opening day. But it cost them more interest, 14.99% to be exact.
Accessity CEO Elizabeth Schott said the organization charges higher rates because it works with businesses that other banks may deem too risky. The association offers fixed rate loans between $300 and $100,000, at fixed rates of 6.99% to 14.99%, at simple interest. While traditional banks may charge 3-7%, Accessity still beats cash advances on a credit card, where rates are typically over 20%.
“If they are able to qualify with the traditional programs, we encourage them to do so,” Schott said. “Our program is really designed so that we can eventually help these business owners grow and gain more experience and then transition into that.”
There is no particular minimum credit score to apply for the loans. However, Accessity requires people to be up to date with their bills or payment plans.
Yanez and Nunez have since refinanced at a lower rate of around 2%. For them, the most important thing was to get vaccinated.