Beside a row of industrial-sized ovens inside La Cocina one warm March evening, a group of about 25 adults sat fixated on a panel presentation hosted by a handful of micro-lending organizations offering them a lifeline.

“I applied for a line of credit with a bank, but being a small business I had very little credit history. I was totally denied,” explained Cristina Besher, recounting her foray into self-employment in front of an audience of mostly women.

Besher owns Kika’s Treats, a successful baked goods business in Dogpatch, thanks in part to a couple of timely loans from micro-lenders. “If you don’t have equity with the bank, they won’t be giving you the money.”

Besher’s is the story of many entrepreneurs and aspiring business owners in the Mission — architects, dry cleaners, jewelry store owners, chefs and others turning to micro-loans to jump-start their businesses.

Micro-loans aren’t only for the fruit vendor in sub-Saharan Africa or the dairy farmer in Southeast Asia. Small business owners and aspiring entrepreneurs here who don’t qualify for loans with big banks need that same help, and a handful of nonprofit “micro-enterprise development” organizations in the Bay Area are stepping in. They help disperse money from the Federal Recovery and Reinvestment Act, and act as intermediaries between the Small Business Association and mom-and-pop businesses in the region. Loans range between $500 and $100,000, with little or no collateral necessary, at fixed interest rates.

“As far as I knew there weren’t really any other options,” said Alex Salazar, co-founder of Salazar Duncanson Birchall Architects, on South Van Ness Avenue.

Salazar was backlogged with projects in 2009 and needed to hire part-time help to meet his deadlines. The banks he looked at had nothing for him. Salazar assumed he was a prime candidate for the government’s small business loan programs he’d been reading about in the news, but soon learned that “that word means something very different to government officials.

“They’re talking about small manufacturers with 50 or 100 employees,” Salazar said. “They’re not talking about sole practitioner architects or small artisans trying to produce a small product in the Mission.”

He found an affordable $25,000 loan with San Francisco-based TMC Working Solutions. The organization connects entrepreneurs like Salazar to micro-loans and startup revenue from the city’s Revolving Loan Fund.

Home to young working professionals and a chunk of the city’s new immigrants, the Mission has become a focal point for micro-lenders trying to reach people who have the fewest alternatives. Besher received her first loan of $4,000 loan at 5 percent interest through Opportunity Fund, a San Jose-based micro-lender that opened a satellite office inside Plaza Adelante on Mission Street last year.

When she decided to expand Kika’s Treats, Besher told the group at La Cocina, she borrowed $11,000 from TMC Working Solutions. (She applied there because they had loans up to $25,000 and she wanted to cultivate a relationship with them.)

“What kind of profit level did you need to get these loans?” asked a woman with gray hair and glasses.

“I didn’t need to be at a profit level,” Besher said. “Everything is on assumption. But definitely always do a solid business plan.”

Estimates from the California Association for Micro Enterprise Opportunity (CAMEO) show micro-lending in the state on the rise since 2008, the year before Congress passed the American Recovery and Reinvestment Act. The act funneled $30 million to the SBA’s micro-loan program in California, half of which has been loaned out to create more than 42,000 jobs, according to, which tracks the use of those funds.

Opportunity Fund has a 90 percent repayment rate among its 1,300 clients. Of the 78 businesses borrowing from Working Solutions, “a few” have struggled with repayments, said executive director Emily Gasner.

It’s unclear how successful each borrower will be. Small businesses still have many hurdles, and some of the borrowers say business advice is as vital as the loan.

Paula Tejada, for example, took out a micro-loan through the Mission-based Women’s Initiative for Self Employment in 1996 to support Chile Lindo Empanadas, her shop on 16th Street; then she took out another one in 1999. This past winter marked the first time Tejada’s business has been in the black since she bought it 15 years ago. The money is helpful in the short-term, she said, but technical assistance is necessary.

“We’re just going by instinct and our common sense, which not necessarily is the best way to do things as a professional.”

A 2011 report on the scale of domestic micro-lending speaks to her point. Produced by the Aspen Institute, the report found that the vast majority of 263 successful micro-enterprise development organizations polled for the study offered services beyond the standard micro-loan. Organizations that educate their clients about the logistics of entrepreneurship, like crafting business plans, “ the debt collector chasing their debts are likely the leading edge of a move in the industry to respond to the increased debt challenges of prospective borrowers.” The report also notes that “future surveys will likely show even more institutions engaged in these services.”

Hand-holding has become a top priority of the association for micro-lenders in recent years, said spokeswoman Heidi Pickman. Four out of five business owners who receive training and consultation in their first five years are likely to see their businesses grow, she said. According to the association’s figures, the 21,309 businesses served in 2009 have created more than 41,000 jobs.

“You want to know where the jobs in California are going to come from? They’re coming from these micro-loans,” she said.

¡Venga! Empanadas will be the second empanada shop to open in the Mission — after Chile Lindo — once Manuel Godino finishes installing his kitchen on Valencia Street. It should be open within a month. Godino, an immigrant from Spain via Argentina, took over a brick-and-mortar on Valencia with a $45,000 loan from Opportunity Fund last month.

Before, he was considering selling part of his business in order to afford the equipment needed to start his own kitchen.

“I didn’t know where I would get the money,” Godino said. “I had no credit. I was going to do whatever I needed to get money.”

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Though he lives in Russian Hill, Gregory Thomas feeds in the Mission. As a cub reporter, he happily avoids the doldrums of debt by subsisting on one $6 burrito per day. For fun, Thomas rides a multi-gear bicycle and plays pick-up basketball in Dolores Park.

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