In his 20 years as a tutor, Derrick Louis has noticed a constant trend: many kids and adults struggle with and don’t like math, but they don’t know why.
“A lot of kids hear adults’ frustration with it and come to us with this preconceived notion that math is very hard,” Louis said. “If you think something is difficult, you will make it difficult. Usually between my second and third session with them, I hear, ‘Is that it?’ I’m able to show them how easy math can be.”
In 2005, Louis opened an in-home tutoring business, Arithmetic Solutions, specializing in math tutoring for children and adults in the Los Angeles area. Many of his first clients came from a contract with a local school district. When the local school district opted out of Title I funding in 2013, he and other providers lost their contracts — and most of their business referrals. Louis then decided to expand the scope of services offered, but he needed funding and resources to get started.
Thanks to a loan from VEDC (Valley Economic Development Center), a community development financial institution (CDFI) to which Wells Fargo recently awarded more than $2 million in lending capital and grant funds, Louis was able to expand his business online and reach kids nationwide.
Reaching underserved populations
VEDC serves traditionally underserved populations by providing financial resources and training in California, Nevada, Illinois, New York, Connecticut, New Jersey, Florida, and Utah. It’s one of 12 CDFIs that Wells Fargo awarded approximately $3 million in grants and more than $8 million in lending capital to, as part of the Wells Fargo Works for Small Business®: Diverse Community Capital program.
The program, which was launched in November 2015, provides $50 million in lending capital and $25 million in grants to community development financial institutions over three years. The money is awarded twice annually and helps the institutions provide diverse-owned small businesses access to capital, technical assistance, business planning, and other resources. To date, the program has distributed $38 million in grants and lending capital to 30 CDFIs. Interested CDFIs can visit the Community Development Financial Institution page to learn more about the guidelines and access the online interest form.
“Like our previous awardees, each of the 12 CDFIs funded in this round understands the challenges that diverse small businesses face in their market,” said Connie Smith, Diverse Community Capital program manager. “They all have a compelling strategy for helping diverse small businesses become credit-ready and gain access to the credit they need to start or grow their business.”
VEDC received $2.25 million in lending capital and $250,000 in grant funding. “We plan to put most of the money toward a fund dedicated to helping African-American entrepreneurs like Louis,” said Robert Lopez, chief operating officer for the corporation. “Disproportionately, there is a lack of access to capital for small businesses owned by low-to-moderate-income populations, minorities, and women. Out of all the groups we help, African-American small business owners are the most disenfranchised.”
‘The difference between staying in business and going out of business’
In 2014, Arithmetic Solutions received a $25,000 loan from VEDC for information technology staff to create and start a website and purchase the licenses and software needed for the online tutoring platform. The group also received a $5,000 loan to purchase materials and equipment for the tutors to work online.
“Arithmetic Solutions encompasses the entire spectrum of why CDFIs do what we do,” Lopez said. “I believe that Derrick’s story really captures the spirit of what VEDC is trying to accomplish with the support of Wells Fargo.”
Today, Arithmetic Solutions provides in-home tutoring within the Los Angeles area and online tutoring nationwide for about 1,000 children and adults each year. Louis hopes that, by launching a new website in early 2017, Arithmetic Solutions will reach 2,500 to 3,000 students a year.
“Receiving the funding from VEDC was the difference between staying in business and going out of business,” Louis said. “Now, the sky’s the limit.”