CDFI Helps Small Business Get Going, Sets Owners on the Road to Bank Financing
Client: Tin Roof Tacos
Client Location: Boise, ID
CDFI: MoFi
CDFI Service Area: ID, MT, OR, WA, WY
Financing and technical assistance
For almost a decade, Dallas-native Susan Loyd worked at a relative’s Texas taco shop, learning every aspect of the business and helping it grow. When Susan’s sister, Sandy Broun, moved to Boise, Idaho, the siblings saw an opportunity to bring a similar style business to their new community—Boiseans were hungry for affordable tacos filled with fresh ingredients and fun combinations.
Susan and Sandy had all the elements necessary to launch a successful restaurant: experience, dedication, and a solid business plan. And they nearly had bank financing. But at the last minute, a small part of their loan application didn’t meet the bank’s criteria. Rather than shut the door on the entrepreneurs, the bank reached out to CDFI MoFi (formerly Montana & Idaho CDC) for help. Explained MoFi President Dave Glaser, “Their banker called us and said, ‘I can’t make this loan. We are getting really close to our close date. Can you take a look?’”
MoFi recognized the sisters’ potential and provided a loan from the CDFI’s small business loan fund.
Susan and Sandy opened Tin Roof Tacos in January 2016. From the start customers flowed into the shop. In its first year, Tin Roof Tacos did $1.7 million in sales and created 30 jobs. A second location is in the works.
Using its Path to Bankability model, MoFi also helped the siblings with developing financial projections, finding the business’ break-even point, and creating a year one marketing plan. The CDFI provided a grant for legal services, and created a goal for Tin Roof Tacos’ owners to access bank take-out financing within two years.
In a January 2017 Federal Reserve Bank of Minneapolis publication Glaser explained that 75 of all MoFi loans come from bank referrals. Path to Bankability is designed to help get MoFi clients to a “bankable” point even faster. He said, “Today, it takes us about 33 months to make someone bankable. We plan to reduce that to an average of 18 months.”