Los Angeles-based AltCap California began issuing loans in January 2023 to business owners with much of the financing backed by state loan guarantees administered through Small Business Development Corporation of Orange County (SBDC-OC) – by last fall, AltCap had crossed $4 million in deployments to nearly 40 entrepreneurs.

AltCap California is a nonprofit mutual benefit corporation and a mission-focused affiliate of Missouri-based AltCap, a federal Community Development Financial Institution that operates in Colorado, Kansas, Nebraska and Texas. The California organization’s focus is to provide debt capital of $5,000 to $300,000 to small businesses in the greater Los Angeles area owned by people of color, women, immigrants and others who often experience difficulty landing the financing needed to build and sustain their companies.

AltCap California began operations two years ago through the efforts of its President David Desai-Ramirez and with seed funding provided by leadership of AltCap in Missouri. In early 2022, Desai-Ramirez connected with SBDC-OC’s Michael Ocasio and team, and a strong partnership began.

AltCap California President
David Desai-Ramirez

AltCap California began lending in January with a goal of securing 50% of its loans through SBDC-OC and the state’s Small Business Loan Guarantee program by year’s end. By mid-October, AltCap California was approaching $2 million in state guarantees on just over $4 million and nearly 40 loans approved. The organization anticipates generating over $5 million in deployed capital by the end of the calendar year.

“AltCap California has had an excellent run out of the starting gate and SBDC-OC is privileged to assist in the achievement of their goals,” said Ocasio, chief executive officer for Small Business Development Corporation of Orange County. “Our organizations’ missions are in alignment and we look forward to continuing our collaboration toward helping entrepreneurs succeed.”

SBDC-OC and AltCap California are working with the Partake Collective in Long Beach, which operates and develops ghost kitchens for food entrepreneurs, toward rolling out a new loan product.

“We’re trying to leverage the strength of the three partners to benefit the food entrepreneur,” said Desai-Ramirez. “We are building a program together where any time these food entrepreneurs need a loan they can call us and we can finance them quickly. With SBDC-OC at the table, you start to really stretch and expand the world of possibilities for how fast and how many entrepreneurs we can support.”

Noted Jim Ely, SBDC-OC president, “We’re filling a vital niche in the financial services market.”

The California nonprofit lender got its start when AltCap’s chief executive Ruben Alonso III conceptualized the expansion into the Golden State and built a pool of startup funds. Industry cohorts and advisors described an endless need for flexible small business loans, especially among BIPOC and female business owners in the Los Angeles area. “They saw a real gap and we are here to be as helpful as possible with that gap,” Desai-Ramirez said. “This year has been about deploying capital, working on providing excellent customer service, and being a great partner to others doing similar work, all in service to our mission.”

AltCap California leverages five contractors who provide a number of services that are crucial to getting applicants loan ready. “We have a small and mighty team,” he said. Marketing is a grassroots effort through strong partnerships , in particular through the relationship with SBDC-OC.

“We want to be known for centering the needs of our borrowers ,” Desai-Ramirez said. “We are here to be helpful and sometimes that includes referring an applicant to a lender that is an even better fit for them.”

This year’s focus will expand to include raising some of the financial resources that AltCap California will need to continue to provide gap-filling loans in Southern California. The California lender is also aiming to become federally certified as a CDFI under the U.S. Treasury.

California’s Small Business Loan Guarantee program and SBDC-OC are very mission-focused, Desai-Ramirez noted, and show dedication to businesses whose credit challenges and financial obstacles, many of which are very systemic in nature, often prevent acquisition of traditional business financing.

“SBDC-OC’s staff really walk the walk on demonstrating a strong commitment to fulfilling the purpose of the loan guarantee program,” he said.