WHERE: Point Arena, Mendocino County, California

PROBLEM: There are limited financing options for small business owners in areas of economic distress.

SOLUTION: RCAC assists small businesses by providing low-interest loans and technical assistance through its Loan Fund.

A suite at the Wildflower Boutique Motel. Photo credit: Wildflower

Point Arena is a town of 500 in Mendocino County, California, that is renowned for its natural beauty. Originally a logging and shipping center, the town is now a lodging, hospitality and tourism hub. Due to a lack of employment opportunities, a higher-than-average number of residents live below the poverty line.

In 2010, lifelong construction contractor Jeff Hansen and his wife moved from Utah to Point Arena after discovering a derelict motel on Highway 1 that they hoped to transform into a boutique motel. They acquired the property and an adjacent building in 2015 with grant funding, private investment and savings, and renamed it the Wildflower Boutique Motel.

The Hansens had difficulty obtaining traditional bank financing but their search for solutions eventually led them to Rural Community Assistance Corporation (RCAC). As a nonprofit Community Development Financial Institution (CDFI), RCAC’s Loan Fund provides low-interest loans and technical assistance to small businesses to create jobs and improve economic conditions in underserved communities across the rural West. RCAC assisted the Hansens in meeting USDA terms and conditions for securing the loan, including providing a feasibility study, appraisal and environmental report.

In August 2020, the Wildflower Boutique Motel opened with modest success. By 2021, bookings recovered to near pre-pandemic levels, and occupancy rates continued to rise throughout 2022. The Wildflower Boutique Motel is now a popular destination and brought in about $120,000 in tourism tax revenues for the city last year. The Hansens are expanding operations to a property across the street.

“Our business is strong and we employ a lot of people,” Jeff Hansen said. “This would have never happened without RCAC.”

The Hansens’ adjoining property also houses popular Japanese-style eatery Izakaya Gama. Chefs Elyse and David Hopps started the restaurant as a pop-up in 2020 and were enthusiastically received by the community. At the Hansens’ urging, the Hopps worked with RCAC’s Loan Fund to secure a loan from the U.S. Small Business Administration (SBA) Community Advantage (CA) pilot loan program. Since opening in March 2022, Izakaya Gama has been solidly booked almost every night. The restaurant is a source of stable employment and the Hopps donate a portion of their proceeds to the local art community.

“RCAC gave us the funds to start our business off right and eventually pay it forward to our community,” Elyse Hopps said. “We are very grateful for the assistance.”

Read more: