Downtown Omaha (Photo by Shannon Ramos)
When Dayana Lopez and her family launched Maria Bonita with one food truck in Omaha, Nebraska, in 2009, they weren’t ready for the challenges they would face as business owners.
“It’s a bit harder than anyone would expect,” Lopez says, noting that she knew about some resources for businesses back then. “You come to find out that it’s just one aspect.”
Since then, the Lopez family has expanded their Mexican cuisine offerings with a brick-and-mortar restaurant, another food truck, and catering. They’ve employed about a dozen full- and part-time employees over the years.
When they first decided to invest in a food truck, Lopez says, they were overwhelmed by the permits they needed to obtain and the hoops they had to jump through. At that time, the city of Omaha didn’t have established rules for food trucks.
“They say ‘Nebraska Nice’ but it’s Nebraska hard,” she says.
However, as their business has expanded, they’ve found an easier path to capital, thanks in part to the Nebraska Enterprise Fund, a community development financial institution (CDFI) based in nearby Oakland, Nebraska. CDFIs focus on lending in underinvested communities, and NEF helped Maria Bonita with financing for the second food truck. (The family also took out loans from First National Bank.)
“It has been a critical funding stream for Maria Bonita,” Lopez says, citing NEF’s approachable application process.
Maria Bonita is just one Omaha small business that NEF has helped. For two years in a row, during the 2017 and 2016 fiscal years, the CDFI has made over 100 loans, totaling over $3 million each year, according to Jim Reiff, executive director.
Small business owners, especially those who are new to entrepreneurship, face several challenges when it comes to funding and banking.
“And a lot of people have poor credit reports,” Reiff says, noting that sometimes a person’s bad credit is not based on what they did. “Sometimes … nobody’s ever taught them about credit before, so how are you going to know how to take care of your credit report, if you’ve never been taught about it? It’s actually, ironically, because of a thing they didn’t do.”
Another challenge Reiff mentions is lack of experience, but that isn’t always straightforward.
Reiff recalls working with a pair of clients who were running a security company. The business partners had over 30 years of military and police department experience but the bank said that wasn’t enough.
That’s where NEF (and CDFIs around the U.S.) comes in. In June, NEF received almost $700,000 in loan and grant money from Wells Fargo, to support small businesses.
“We’re going to use this money for North Omaha, which is a traditionally underserved part of the city of Omaha,” Reiff says. North Omaha has historically been home to a large black population.
“The banks, still, are having a hard time getting money into the community, whereas someone like us can kind of get money going in businesses that they maybe can’t get,” Reiff says. “Hopefully, in five years they will be able to … we’re not here to compete with the bank, we’re here to augment what the bank can do.”
NEF also offers business and financial planning, mentorship and training, including a five-session program that assists clients with acceleration.
“At some point, you have to be able to sell more so our focus is on that,” Reiff says, noting that there are only so many costs businesses can cut.
NEF doesn’t have endless resources, so if a business needs help that the organization doesn’t provide, it will refer the owner to a collaborator like the Greater Omaha Chamber of Commerce, Small Business Association or Catholic Charities.
“We know we’re not perfect at everything and if somebody can do it better, it’s silly for us to do it,” Reiff says. “And it’s super silly to duplicate services.”
In July, Reiff told the Omaha World-Herald that the ideal outcome for NEF clients is to eventually grow enough that they show up on banks’ radars.
“We’d like them to be able to walk into a bank and the bank to take them serious for what they are. And that’s being a viable business so if they need funding, we’d prefer that the banks cover the funding,” Reiff says. “What they can do for a business is three steps higher than what we can do for a business.”