Knitting Communities Together: A Local Story with a Global Impact

Nicole Snow was selling home goods and clothing at craft fairs in California when she decided that she wanted to learn how to knit. With a passion for crafting and access to artisan sources in India and Nepal, she began to hunt for unique yarns. That’s when she discovered recycled sari silk yarn.

Soon after ordering, Snow realized there was a larger supply chain issue. “People weren’t being treated fairly, they weren’t being paid fairly, and there wasn’t sustainable yarn,” she comments. “I was naïve to the industry. I just thought it was cool yarn and if I think it’s cool, maybe there’s other people who will think so as well.”

Darn Good Yarn was born out of a few boxes of recycled sari silk yarn in Snow’s spare bedroom and the idea that she could create sustainable employment opportunities for women in Asia. Utilizing her degree in Business and Technology Management, as well as her experience as a contracting officer in the Air Force, Snow began to build her company with social entrepreneurship in mind.

Since opening in 2008, Darn Good Yarn has saved over 1,200,000 pounds of material waste from landfills and helped to create hundreds of sustainable jobs for artisans throughout India and Nepal.

Up until the end of 2017, Snow had been self-funding Darn Good Yarn. “That’s probably why I grew so slowly, because I didn’t go after external financing. I wouldn’t have even known where to start,” she says.

As the business began to rapidly grow, a significant line of credit was needed to prepay for inventory. Snow courted 5 or 6 banks with little success. As a last effort, she reached out to Capital Bank. “Roberta Bastow happened to be the business relationship manager. Because she owned a small business before she really got into banking relations, she got what my grit was about,” Snow states. “She methodically looked at what the business really was and that’s where a banking relationship falls into place.”

After assessing the needs of the business, Bastow and Capital Bank assisted Darn Good Yarn in securing a U.S Small Business Administration (SBA) Express Loan. Due to Snow’s veteran status, SBA waived all upfront fees on the loan. “What’s been great about working with Darn Good Yarn and Nicole, is being there for them as they continue to grow. Working in sync to make sure that whatever is out there to help her is evaluated and implemented,” said Bastow.

When the COVID-19 pandemic hit and the SBA’s Paycheck Protection Program (PPP) rolled out, Bastow was able to assist Snow and her team through the process of applying and receiving funds. The Paycheck Protection Program enabled Snow to slowly bring back her team of 13 employees during a time when sales were beginning to slow.

“Owning a small business can be messy and there’s always a lot of back story to it but that’s actually what makes the business tick in a lot of cases. And that’s what she [Roberta] really got and understood and it’s been a very fruitful relationship,” Snow adds.

Darn Good Yarn was also approved for an Economic Injury Disaster Loan (EIDL) and EIDL Advance through the U.S. Small Business Administration. “The EIDL loan was critical, because if we have another round of this [COVID-19], we’ve built in that insurance plan for ourselves,” Snow states. “The advance is important to us as well because it provides a cash bridge and what business doesn’t need that bolster, especially when it’s been rocked.”

The U.S. Small Business Administration’s six-month debt relief program on current loans, including Darn Good Yarn’s Express Loan, enabled Snow to pivot her business at the peak of the pandemic. As many hospitals and healthcare facilities struggled to supply PPE for workers, Darn Good Yarn recognized an opportunity. Utilizing her existing contacts in Asia, Snow was able to import masks and then donate them to local hospitals in need.

“We were able to leverage this tool and it had a way bigger impact than even buying yarn. A lot of the hospitals we were servicing were actual COVID-19 hospitals and we were providing them with N-95’s when no one else was able to get N-95’s into the country,” she says.

When the business first began importing masks, the transactions were occurring within Darn Good Yarn itself. “We thought it was going to be a one and done, but eventually it turned into its own eco-system,” Snow states. Falling back once again on her contracting experience in the U.S. Air Force and her years of establishing extensive supply chains, Snow created Black Sheep Advisors.

Using Darn Good Yarn’s existing line of credit as a bridge loan between the two business entities, Black Sheep Advisors continued to source and donate PPE. Since beginning the endeavor, Snow and her team have donated over 30,000 masks to hospitals across the country. As the need for PPE slows, Snow plans to continue building Black Sheep Advisors through government contracting. “I really love looking for places in our economy where people are underserved and how I can move in and help. So, I plan to engage in government contracting in the same way,” she says.

“On a macro level, it can feel like you’re just a small drop in the bucket,” Snow follows up. “What really astounds me is that when you serve your local community as a small business, that’s where the biggest wins for the future are and that’s where the biggest security blankets come from.”

(Disclaimer: The SBA does not endorse the organizations sponsoring linked websites and does not endorse the views they express or the products/services they offer.)

Lender Match

Lender Match is a free online tool that connects small businesses with SBA-approved CDFIs and small lenders. Answer a few questions about your business in as little as five minutes, receive an email with contact information of lenders who express interest in your loan, and then compare rates, terms and fees. Lastly, submit loan applications and paperwork. You're well on your way to securing a business loan!

Link: https://www.sba.gov/funding-programs/loans/lender-match

SBA Express Program

The SBA Express program features an accelerated turnaround time for SBA review. The SBA will respond to your application within 36 hours. Maximum loan amount of $350,000 and maximum SBA guarantee of 50%.

Link: https://www.sba.gov/partners/lenders/7a-loan-program/types-7a-loans#section-header-4

Economic Injury Disaster Loan

In response to the Coronavirus (COVID-19) pandemic, small business owners, including agricultural businesses, and nonprofit organizations in all U.S. states, Washington D.C., and territories can apply for an Economic Injury Disaster Loan. The EIDL program is designed to provide economic relief to businesses that are currently experiencing a temporary loss of revenue due to coronavirus (COVID-19).

Link: https://www.sba.gov/funding-programs/loans/coronavirus-relief-options/economic-injury-disaster-loans

Paycheck Protection Program

The Paycheck Protection Program is a loan designed to provide a direct incentive for small businesses to keep their workers on the payroll. SBA will forgive loans if all employee retention criteria are met, and the funds are used for eligible expenses.

**Current law dictates that the Paycheck Protection Program (PPP) close at the end of August 8, 2020. As such, SBA is no longer accepting PPP applications from participating lenders.

Link: https://www.sba.gov/funding-programs/loans/coronavirus-relief-options/paycheck-protection-program