Opportunity Fund Review

Pros

• Borrower qualifications are lower than going through banks
• Financing is available to qualified minority- and women-owned businesses
• No credit score requirements
• Rates tend to be inexpensive
• Monthly repayments

Cons

• Primarily available only to businesses in California, with limited service to Nevada, Washington, and New York
• Not available to businesses in some industries
• Funds can take a while to disburse

Opportunity Fund Overview

As of 2019, Opportunity Fund’s five-year goal is to invest $1.4 billion in small businesses, with a focus on low-income neighborhoods. Opportunity Fund is a nonprofit organization based in San Jose, CA, that focuses on offering microloans to small businesses from underserved demographics and areas.

Originally financed through Silicon Valley banks and donors, Opportunity Fund’s reach is still primarily focused on California. However, the nonprofit does lend in a more limited capacity to Nevada, Washington, and New York. If you live in another state, Opportunity Fund may be able to help you through its lending partners, but it won’t be your loan’s point of origin. Whether or not that makes sense for you will depend on how you feel about Lending Club.

Small businesses that fall within Opportunity Fund’s umbrella will find a lot to like here: meaty borrowing limits (especially for microloans), lower rates than the alternative lending market, de-emphasized credit requirements, and generous term lengths.

Services Offered

Opportunity Fund offers installment loans. Installment loans grant the borrower a lump sum of cash, minus any applicable origination fees. The loans accrue interest over time, so the longer the loan’s term, the more interest will accumulate. Payments are broken up evenly into installments, which are usually paid monthly, weekly, or in the case of short-term loans, daily.

Borrower Qualifications

Opportunity Fund does not have any explicit qualifications regarding credit or revenue, but you’ll need to have been in business for at least 12 months to be considered.

Opportunity Fund does not lend to businesses that fall into one of the following categories:

• Bars and liquor stores
• Cigarette, tobacco, marijuana retailers, or smoke shops
• Real estate development or brokers
• General contractors and subcontractors
• Gas stations
• Car dealerships
• Other nonprofit companies
• Other finance and trading companies
• Rideshare cars

Opportunity Fund primarily serves California, and it’s the only state where full service is offered. That said, it does loan to other states through its Lending Club partner platform, except in Montana, North Dakota, South Dakota, Tennessee, Vermont, or Washington D.C. Loans are subject to certain restrictions depending on your state. Typically, this means either raising the minimum loan amount or restricting the category of business that can apply (LLCs and C-corps, for example).

Rates & Fees

Opportunity Fund bills itself as a microlender with a focus on minority- and women-owned businesses. The lender primarily works with businesses located in California but expands its reach through partnerships with entities such as Lending Club as well as specialized programs (e.g., the Asian Pacific Islander Small Business Program). Opportunity Fund also offers microloans in Nevada and trucking loans in Washington and New York.

You can borrow between $2,600 to $250,000 directly through Opportunity Fund, which is considerably more than the typical microloan. The trucking/mobile food program caps at $200,000. Unfortunately, Opportunity Fund doesn’t provide any information about its rates and fees upfront on its website, but according to organization representatives, you’re looking at an average APR of 7.9%-18.0%.

Opportunity Fund offers installment loans with term lengths ranging from one year to 60 months.

Payments are made monthly. Opportunity Fund conveniently allows you to choose which day of the month your payment is due. In addition to having your funds withdrawn each month automatically, Opportunity Fund also gives you the option to pay by mail or through a PayNearMe site, which includes participating Family Dollar, Ace Cash Express, and 7-Eleven stores.

Application Process

While Opportunity Fund’s website has a lot going on, you actually have to call via a toll-free number to get your application process started. You can reach them Monday through Friday, 8 AM-6 PM PT. At that point, an Opportunity Fund rep will walk you through the loan application process, including letting you know what documents you need to submit. While Opportunity Fund doesn’t provide a list of the documents you’ll need in advance, you can generally expect this to include bank statements, proof that you are who you say you are, and proof that you own and operate your business.

Opportunity Fund’s approval process takes between three to five days, making it a bit slower than you’d find with most online lenders, but faster than many traditional banks. Once a decision has been made, your assigned loan officer will contact you. If you’ve been denied, your loan officer will discuss in detail with you why you didn’t qualify and offer advice about how to proceed.

From the time of approval, it’s another two-to-five business days for your money to be disbursed. You can receive your funds by paper check or electronic deposit unless you’re using the money to acquire a truck, in which case the money will be paid to the vehicle vendor.

Sales & Advertising Transparency

Opportunity Fund was one of the co-sponsors of The Small Business Borrowers’ Bill of Rights, which makes it a little disappointing that it doesn’t present more information about rates and fees on its website. Since Opportunity Fund is more than happy to disclose that information when contacted, this strikes me as more of an oversight than an intent to obscure.

Otherwise, the site offers some blogs with useful financial literacy information as well as some detailed white papers about Opportunity Fund’s mission and organizational activities.

Customer Service & Technical Support

Opportunity Fund works closely with applicants throughout the process and seems generally responsive to inquiries. User reviews of customer service appear to be mixed, however.

Opportunity Fund’s preferred mode of contact appears to be by phone, but you can also reach out by email or through social media (Facebook, Twitter, LinkedIn, Instagram).

User Reviews

Negative Reviews & Complaints

Opportunity Fund isn’t accredited with the BBB; however, the watchdog site did dock it some grades (C+) for failure to respond to the one complaint currently logged on the site. Reviews on Yelp, where it rates 3 out of 5 stars, are pretty polarized, with mostly 1 and 5 stars.

Complaints mainly seem to fall into the following categories:

• Communication: From the volume of calls to a lack of callbacks to misunderstandings, customer service experiences between clients seem to vary greatly.
• Can’t Serve My Business: Some would-be customers expressed frustration about not falling into Opportunity Fund’s lending segment.

Positive Reviews & Testimonials

Opportunity Fund highlights positive testimonials by satisfied customers on its site and in its white papers. You can also find satisfied customers among the Yelp reviews and scattered across other sites that allow for user feedback.

Happy customers appreciated:

• Reasonable Rates: While not quite prime/bank-level, Opportunity Fund is usually a lot more affordable than alternative lenders.
• Help For Underserved Communities: With its focus on lending to poor, minority, and women-owned segments, Opportunity Fund has helped a lot of customers who were otherwise struggling in the lending market.
• Customer Service: As is often the case, customer service can be a very individualized experience. Customers who were happy with the service they receive praised the speed and responsiveness of their rep.

Final Verdict

Opportunity Fund fills a niche between online lenders and SBA loans. If you live in California or Nevada or are financing a truck in Washington or New York, and you haven’t had much luck with bank loans, it’s definitely worth seeing if Opportunity Fund can help you. With a focus on minority- and women-owned businesses as well as businesses in poorer areas, it may be the ticket to better rates and terms than you’d find elsewhere on the alternative lending market.

Of course, Opportunity Fund’s scope is limited, meaning that there are many businesses it won’t be able to help directly. Don’t fall within Opportunity Fund’s market segment? Consider an SBA loan. Are you looking for more organizations that help minority-owned businesses? Consider working with a minority depository institution.

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