Yola (Food for Thought) | Washington, D.C.

Loan Finally Comes Through for Unique Restaurant Pursuing Green License

Laura Smith
Yola (Food for Thought)
Washington, D.C.


Founded: 2010

When its doors opened last December, Yola became the second of just two businesses of its kind in the country.

A trip to England inspired small business owner Laura Smith to bring the concept of a fresh parfait bar to Washington, D.C. “Why don’t they do that here?” she said of what she’d tasted across the pond. The answer might have something to do with cost. Access to loans is virtually nonexistent for restaurants, startups, and aspiring entrepreneurs who don’t have collateral. Without her father’s help, 25 year-old Laura would have struck out.

“Banks have two rules: no restaurants and no startups. We are clearly both.”

Yola, a fresh—not frozen—parfait, espresso and smoothie bar is a father-daughter business. Along with providing Washingtonians with a new option in desserts, the duo wanted their first joint endeavor to be as green as possible. In 2009 they began researching green energy and looking for funding. When Laura and her father started seeking loans, banks would laugh. “Aw that’s such a cute idea,” lenders would say to their startup restaurant proposal. Until April, Yola was privately funded in full. Laura says private investors supported her commitment to the environment, seeing it as the wave of the future. Still, “a truly green build-out can be very expensive,” so Yola needed additional funding.

Although business is up and running and doing well, it wasn’t until recently that the pair received a small business loan from a bank in Virginia. Still, without Laura’s father as co-guarantor, this loan would not have been accessible—Mr. Smith had to put up his home as collateral. Aside from the monumental risks posed by fronting collateral, what can be said of this challenge for young entrepreneurs? Laura probably speaks for many: “As a 25-year old, it's safe to say I have no real collateral.”

“It’s a cycle of wanting to make the right decision.”

Access to funding has been the most difficult hurdle for the business to cross thus far. Laura says the commitment to running a green business is “probably [what] made us need the loan in the first place,” since the upfront costs of laying a green foundation are so steep. These efforts typically pay off in the long run rather than immediately. Despite their difficulty obtaining a loan to fund green practices, Laura and her father continue to run their business by socially, environmentally conscious standards. They believe there are moral implications when going green—banks can put a dollar value on a loan but no one can assess the environment’s value.