Lending a hand

Lending a hand

Capital is the lifeblood of any business, and Donna Grigsby has been giving transfusions to cash-strapped entrepreneurs for nine years as executive director of the Washington Area Community Investment Fund (WACIF). Now Grigsby is helping rehab post-fire Eastern Market.

The best thing about funding small businesses is that they end up receiving what they need, such as increased inventory and the ability to hire people in the community. And we’ve seen over 400 jobs created as a result of WACIF’s access to capital.

The worst thing is seeing businesses not being able to make payments, which then requires us to continue to provide technical assistance and build relationships to ensure repayment on a regular basis.

Which business made the most of a WACIF loan? Pure Bliss Day Spa [7329 Georgia Ave. NW]. We extended her [Alice Love, Pure Bliss co-owner] $350,000 to acquire her real estate and have it converted to an SBA 504 loan. It’s a fabulous spa.

How do WACIF and the Small Business Administration work together? WACIF has a strategic alliance agreement with the SBA, which allows us to work together as far as providing information regarding various loan products and services and technical assistance. We’re also a certified SBA technical assistance provider, and the SBA has invested money to provide micro loans up to $35,000 to qualified small businesses.

Why are loan funds important to small businesses? WACIF is a community development financial institution [CDFI]. We are a provider of technical assistance and access to capital to small businesses. Due to the traditional underwriting used by banks, organizations like WACIF can extend the technical assistance first and then the businesses can have access to capital after the receipt of technical assistance.

What kinds of businesses does D.C. need more of? We need more service-oriented businesses in our neighborhoods that support our underserved communities and can create a stronger tax base for the District and jobs for people in the neighborhoods.

Less of? We need fewer businesses that aren’t appealing and welcoming for customers — for example, poorly done window displays, unclean environments and businesses that don’t have great customer service.

What percentage of WACIF’s work goes to small businesses? Sixty-two percent goes to businesses, 22 percent goes to affordable housing and 15 percent to child care.

Who’s your competition? There are other CDFIs like WACIF that affect WACIF’s ability to get resources and access to capital to do what we do. But we also work in partnerships in many cases to minimize risk.

How different is your job now than when you started in 1998? I don’t know if it’s so much different as it is greater in expansion. I say that because we originally started out in housing, and a lot of our focus was in Northern Virginia. And since I’ve been here we’ve diversified. We now have child care and small business [initiatives], and we’re working on credit and financial literacy and expanding our program to address the needs for those who receive subprime loans and adjustable rate mortgages. We’re also managing eight government grants.

What’s the biggest mistake a small business can make when applying for a loan? Not doing the research on the type of lending institution that would best serve their needs. The worst thing they could do is not spend money on bookkeeping services.

When people find out I’m a native Washingtonian they’re surprised. There are very few Washingtonians who remain here.

As a D.C. native, what’s the biggest change you’ve seen in the city in the past 20 years? The improvement in the inner city. The fact that houses are coming back and communities are starting to re-emerge. Housing development is relatively easy to do because there’s a tangible value that real estate offers, but what’s really needed is to put resources — technical assistance as well — into supporting our small businesses.

In what industry/area are you seeing the most small business startups? Outside of the nail salon places, the Internet cafe and coffee shop places, I’d like to see more service-oriented businesses, hardware stores, bookkeeping services and specialty boutique shops.

Who are your role models? Debbie Hurd-Baptist. She started the CityFirst Bank of D.C., and she was my mentor and confidante. She taught me what banks look for and how to underwrite.

The strangest/most interesting business someone wanted a loan for was a doggy boutique. But they’re of interest because people love their dogs, and they’re in the city and they want to take care of them.

Fundraising is a constant challenge that takes a great deal of my time as well as [the] staff’s and board’s time. Without fundraising and awareness building, our loan activity would not be as rewarding as it is or has been.

Best place for a business lunch? Ellis Island [3908 12th St. NE].

My colleagues would be surprised to know that I used to ride a motorcycle.

The part of my job I hate is declining people for a loan, but the flip to that is being able to offer them technical assistance or guidance so they can get financing in the future.

This article appeared in the Washington Business Journal, August 13, 2007
http://www.bizjournals.com/washington/stories/2007/08/13/story12.html

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