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After Three Small Business Loan Rejections, a Roscoe Village Bakery Turns to Crowdfunding

Loba Coffee + Pastry is asking for $25,000 to move to its new location

a coffee shop window with neon sign reading “Loba”
The front window of Loba Coffee + Pastry
Aimee Levitt/Eater Chicago

Valeria Taylor didn’t think she’d be asking her community to help move Loba Pastry + Coffee, her five-year-old Roscoe Village bakery and coffee shop, to its new location. But after financial institutions rejected her applications for a small business loan for the third time, she felt desperate and launched a GoFundMe campaign earlier this week.

Loba’s customers have already helped kept the tiny independent business bakery stay in business through the pandemic. Once known for kouign amann, Loba has grown its menu through the years. Taylor takes inspiration from her Mexican roots with specials like a croissant made with mole butter.

But the bakery is in crisis mode. The crowdfunding campaign asks for $25,000. As of this morning, the effort had raised more than $18,600. Taylor notes on her GoFundMe Page that the average cost in Chicago to build and design a restaurant or cafe is $200,000.

“I debated whether to do this or not,’” Taylor says. “I feel the community has already helped me out so much, getting back on our feet from 2020. It wasn’t just, ‘Oh, I tried really hard.’ I had the support of the whole-ass community. I didn’t want to ask for more. Maybe it’s the immigrant mindset, and the misconception that we’re just here, taking things for free. But as of right now, there’s no other way.”

If all goes well, Taylor plans to open her new location in October at 1800 W. Addison Street. The cafe closed on Wednesday in preparation for the move, as reported by Block Club Chicago.

Taylor is an industry veteran who’s worked at Blackbird in West Loop, Charlie Trotter’s in Lincoln Park, and Coco Pazzo in Downtown Chicago. The comments on the GoFundMe page have been full of messages of support from customers. “[Woman of Color]-owned, stellar pastries, the best heart,” one wrote. “How could we not support that?”

In solidarity, her employees are running a fundraising online raffle starting Friday via Instagram stories. (Prizes include private focaccia lessons.) There will also be a gathering Friday at the shop from 8 p.m. till midnight, but Taylor prefers that people donate from home because the space is too tiny for adequate social distancing.

Taylor wants to stay in the neighborhood, but even before her lease at 3422 N. Lincoln Avenue was due to expire, she knew she would have to move and that she would need a loan. Her landlord was only offering a two-year extension, not enough time to make worthwhile renovations and plans for a post-pandemic era: The kitchen needed to be rearranged. The communal table — the cafe’s only seating— had to be removed. There needed to be a handicapped-accessible bathroom.

She thought she had found a solution. In June, Taylor signed a six-year lease in a former dry cleaners a few blocks away on Addison. She had the cooking appliances and equipment she needed, and she planned to do most of the renovations herself. She calculated it would cost about $60,000 to finish the buildout and bring the space up to restaurant code. For July and August, she was paying the rent on two storefronts, and Loba would have to shut down for at least two months while she moved and got the new place in order, meaning no income. Her savings wouldn’t cover all of that.

She’d gotten a business loan before, when she’d gone into business in 2016, taking over the former Bad Wolf Coffee after her former boss Jonathan Ory moved to South Carolina. She’d immigrated to the U.S. in 2004 from Guadalajara and had been working mostly minimum-wage jobs; she’d had no savings and bad credit. Earlier this year, she also received two Paycheck Protection Program (PPP) loans, totaling $20,800, to keep the doors open. That amount is a far cry from what Chicago’s bigger restaurant companies received.

This time, Taylor thought, it would be easier. “I thought that after being in business for so long, after surviving the pandemic, it would not be as complicated to get a loan,” she says. “I got the [tax] returns, the cash flow, the numbers are right, my credit score is pretty good. Last week, I got denied for the third time. I cannot believe it. There’s a secret to getting a loan, and I don’t know it.”

She applied to banks. She applied to the Small Business Administration, which offered $10,000. She applied to a nonprofit that specialized in helping people like her — that is, women, immigrants, and people of color. They’d given her $5,000 the first time around, but now, even though she was in a much better financial position, they only offered her $8,500. She’s single and couldn’t apply to what she calls “the bank of mom and dad.” She considered an investor, but rejected the idea: she’d seen that the people with the money make the decisions, and she didn’t want anyone interfering with how she runs her business or telling her she couldn’t pay her employees more. The $25,000 GoFundMe campaign was the absolute last resort.

She doesn’t expect the $25,000 to cover the full cost of renovations, but she hopes it will be enough to keep her going. She’ll continue to apply for loans. She understands the reality banks are facing: it’s easier for a business to default on a loan than an individual, and they need to make money, too. Every loan officer has been looking at her financial information from 2020, which was not her best year in business, for obvious reasons. But no one else had a great 2020, either, she argues, except for maybe Amazon.

“For people like me,” she says, by which she means small business owners who are immigrants and people of color, “the system is rigged against you. My company can’t borrow this amount of money because the bank expects my company will fail.” She’s even more angry at the nonprofit, whose name she declines to mention. “Five years of cashflow, and all I was worth to them was $8,500? If that’s what they’re offering me, and I have a pretty good credit score, what are they giving people in a worse situation? What about someone who doesn’t speak English as well or has kids?”

Taylor isn’t giving up, though. “I’ve been writing myself notes,” she says. “Like, ‘Remember how angry you were? Don’t go back. Don’t change your mind.’”

La Loba, 1800 W. Addison Street, planned for an October opening.

Bad Wolf Coffee

3422 N Lincoln Ave, Chicago, IL 60657 (773) 969-2346 Visit Website