Startup Award Lifetime Winner Grace Fricks On Fueling Entrepreneurial Dreams

grace fricks

It’s not always those with the loudest voices that are actually getting the most accomplished — an observation epitomized by the soft-spoken, but laser-focused, Grace Fricks. Honored last week as the Atlanta Startup Awards Lifetime Achievement recipient, which recognizes an individual who has made significant impact on growing the startup ecosystem over a period of 15+ years, Fricks teared up before accepting her award onstage.

“People just couldn’t figure out why in the world would we do something like this. But now, wow. These guys get it. They get what we do and why it’s so important,” says Fricks.

As every entrepreneur knows, capital is always a challenge for a business just starting out. Small businesses owners face the double challenge of lenders finding it expensive to give them loans and having little to no assets to back themselves up. And minority small business owners face even greater obstacles such as cultural differences, prejudice, language barriers, accessibility challenges, and more.

While working a full-time job, Fricks founded the non-profit Access to Capital for Entrepreneurs (ACE), a community development financial institution loan fund, more than 17 years ago. Soon after, she took on the role full-time and grew the organization to where it is today, with a staff of 20 loaning millions of dollars to small businesses, and providing coaching, mentorship, and resources.

Under Frick’s leadership ACE has helped 725 small businesses create and/or retain 6,200 jobs in Georgia. Hype managed to nail down this southern-sprung firebrand for a few minutes before the awards ceremony to learn about what drives her to take on this massive job, some resources for small businesses looking for loans, and what’s next for ACE.

Why did you originally start ACE?

Actually, this is a second career for me — I am a social worker. Now, I have some business education, but my original passion when we started 17 years ago was trying to figure out how to use money as a leveler. Not everyone wants to be self employed and have their own small business, but for those who did, I wanted them to have the opportunity to do that. You have to have capital for any your business, to get it started and keep it going.

So, I did it. ACE started with $50,000 and we made several loans that first year, but I still had a whole other way to make a living. It was three years after the organization started before I told clients in my other business that I was leaving and that they had to find somebody else. They said, what are you going to do? I said, I’m going to run my loan business. They said, you mean that hobby you’ve got? And I said, what do you mean a hobby?

That was $39 million dollars ago. Maybe it’s $40 million now.

How many businesses would you say you’ve helped since then? 

With capital, about 725 businesses. But we also do coaching and connections for businesses —  there are a lot of people that we work with that might not want to borrow money. The point is not for us just to make money pushing loans — we’re a non-profit — it’s to grow small business.

What kind of coaching do you provide? 

Most of our staff specialize in financial coaching. Understanding the financial statements, even putting together your financial statements, looking at cash flows, that type of thing. Then, in our women’s business center, we have people on staff that can help with a business plan and marketing. If it’s something outside of our in-house staff then we have partnerships with other organizations. We don’t have web developers on staff, so we outsource that.

One of the things that we have been able to do is, if there’s a critical mass of borrowers or people that come to us for coaching who want something specifically, such as a website developer, we’re able to go and negotiate reduced rate contracts so they can get the services at a reduced rate. That’s also how we decide what classes we’re going to teach. Typically for our classes, we contract out to someone who has special expertise. We try to give those jobs to small business owners.

You specifically help business owners that might be considered “underdogs” — particularly underserved entrepreneurs. How do you classify that exactly? 

We are actually certified by the Treasury Department now. We didn’t start out that way, but we’re something called a community development financial institution (CDFI). They specialize in underserved models, so that is the low and moderate income small business owners, people of color, and women. Does that mean that we don’t serve any other owners? No, but we do target those populations. Being a woman myself, I have a great passion for women business owners.

What is one of your favorite success stories? 

There are a lot of them over the years. I don’t know if I can give you just one, but I’m going to try.

Before the recession, we helped a business in Dahlonega, Georgia: a Mexican restaurant. The owner called and said that the other owner, his partner, wanted to get out. The bank would do a loan for the building and the labor — the fixed assets. Could we help them with working capital? We looked at it and we helped. Sergio Moreira and Laura Estrada have opened up five restaurants, Pueblo’s, to date. They do profit sharing with their wait staff.

This sounds like a ton of work. Why are you so passionate about this? 

Truly, whether it’s a small business or my staff, or frankly just people, I love to hear people’s dreams and make it a reality to them. Well, I’m not making it a reality, they’re making it a reality, but I just get a thrill helping it happen. It’s an adrenaline high to see someone do that, especially if the odds are against them. Because we don’t just lend to anybody. It’s underserved people, or small business owners.

What is your biggest new project this year? 

We just hired a commercial loan officer whose specialty is with bicultural, bilingual Spanish business owners. We are going to kick off a Hispanic initiative starting in the Gwinnett area.

This is similar to an intentional initiative we put together in metro Atlanta three years ago. We committed to having significant, measurable impact in the African American community. We opened an office in downtown Atlanta to increase our presence in and accessibility to this community. We hired diverse, culturally competent staff, and then we began by first listening to and learning from community members to more fully understand needs and opportunities in the African American community.

We came to understand that there is an asset shortage, or collateral shortage. Most lenders are going to be looking at your credit history, your cash flow, your business, those kind of things, but sometimes that’s wrong because small business unfortunately have a fairly high failure rate. So when that happens, owners have to use home equity, 401K, savings. But those products are substantially reduced for African American populations and, now we’re seeing, Hispanics also.

So we’re targeting those and creating ways to mitigate our risk as lenders so that we can lend.

What else do you do to mitigate risk?

We started using a product that was developed by the Small Business Administration called an SBA Community Advantage Fund. That provides a guarantee — not 100 percent, but a partial guarantee to us as the lender. When something happens and the loan goes bad, then we get part of our money back for up to 75 percent.

The Tory Burch Foundation also has a program that’s just for women who have smaller “microbusinesses.” Any loan we make to women that is $50,000 and under gets folded into their program. What it does is say, based on the underwriting and your risk profile, we’d normally charge you 10 percent on your loan. The Tory Burch program comes in and meets some of that so we’ll be able to charge you 8 percent and they pay the 2 percent difference.

Are you excited to win the Lifetime Achievement Award? 

I am. I really am. I went home early from the office and I pulled up every one of the five winners websites, just to read about all these businesses. I read all of them, and it just started me on this path of remembering. Remembering the times that people said, “You’re what? You’re going to lend money to people that banks won’t lend to? That’s crazy. You’re never going to get repaid. Why would you do that?” Or, “Are you a finance company? Are you a predatory lender? I bet you’re making a lot of money.” No, no, actually… it’s a non-profit.

People just couldn’t figure out why in the world we would do something like this. But now, wow. These guys get it. They get what we do and why it’s so important. It did make me tearful. It takes a lot to make something from nothing— and after all these years, I’m still the visionary and the persistence person.

Featured photo via David Ahn. Inline photos via ACE and Pueblos.