Merrill Lynch pledges loans to small businesses

Paul Clinton

Merrill Lynch & Co. has set aside $490 million in cash statewide to

lend to small minority-owned businesses like Costa Mesa’s Wahoo’s

Fish Tacos.

The taco-stand chain, with 28 restaurants, has tapped into Merrill

funds to help finance expansions since 1996, when the two struck up a

partnership.

Merrill’s announcement, on April 10, marked the third time the

financial services company has set aside capital to lend to companies

it describes as “nontraditional.” Merrill also said it would hand out

$10 million in community grants.

Wahoo’s -- founded in 1988 by brothers Wing Lam, Ed Lee and Mingo

Lee in Costa Mesa -- has borrowed from Merrill under this program

since the late 1990s, Mingo Lee said. Merrill has provided $1.2

million in capital since then, he said.

“When we were looking for a partner, we tried the traditional

banks,” Lee said. “But Merrill Lynch has been aggressive about

lending to the small businesses. The traditional banks have more

strict guidelines for their lending.”

When Lee came to Merrill’s Sanford Coggins, the financial advisor

who handles the restaurant’s account, Wahoo’s had eight stores and

wanted to expand. But funding the expansion out of its operating cash

was slow going, Coggins said.

“What we were able to do is accelerate the growth process,”

Coggins said. “We helped them manage that.”

Even though it was successful, Wahoo’s struggled to pin down

funding. Some lenders were scared off by the traditionally volatile

restaurant industry and unpredictable customer niche of surfers.

The “flaky marketplace,” Coggins said, wasn’t a concern to Merrill

when lenders learned about the Wahoo’s story.

In the latest pot of funds, Merrill expects to sign deals of

$100,000 or more for an average of five years, Coggins said. The

terms of the loans will vary depending on the business.