Microlending versus small business lending 99% of U.S. businesses employ fewer than 500 employees 91% employ fewer than fiveEddie, Accion client and owner of employeesDardanel Mediterranean Restaurant, (microenterprises)New York City Over the past 15 years, microentreprenuers have employed 50% of all private sector employees and generated 64% of net new jobs! Less than 1% of the 20 million microenterprises in the United States receive credit or business assistance
Barriers to traditional capital • Little or no credit history • Minimal financial documentation • Small capital needs • High risk industries • Under two years in business“Accion gave me the chance to start mycredit history for the first time, acceptingmy ITIN number, and helping my businessto grow.”- Jose Araujo, Deerfield Beach, FL
The impact of Accion and microfinance• We create sustainable businesses• We create employment in low-to moderate-income communities• We create fair wages• We improve their quality of life “Women entrepreneurs are equally strong and are able to realize what ever goal they put in their minds.” - Lucia, Accion loan recipient and owner of La Licuadora Restaurant. Miami, FLSource: 2010 MicroTest Outcomes Survey in partnership with the Aspen Institute
Accion: A national leader with local impactWe believe access to capital helps entrepreneurs: • Create jobs in their communities • Build assets for their families • Contribute to local economic development Eddie, Accion client and owner of Dardanel Fauzia, Accion client and owner of Fauzia Restaurant in Manhattan, NY Heavenly Delights in Bronx, NY 19,000 loans and $121.2 MM disbursed nationwide!
An overview of the credit continuum*Credit cards, Microloans and BankLoans build a credit history. Equity and Investments Bank SBA Loans ACCION MICROLOANS Credit Cards Loan Shark Pawn ShopsFriends & FamilyCrowdfunding Jesse, recipient of the SproutPersonalSavings Loan at ACCION, owner ofEquity Brooklyn Taco. Manhattan, NY Jason, Accion client and owner of a home-based soap company
The Accion NetworkAccion was established in 1991 as the domestic arm of AccionInternational, a global microfinance organizationThe Accion Network represents 30% of all micro-loan volume in the U.S.
Who do we lend to? Beauty & Salon Services 7% Construction, Re Transportation pair & Electronics 40% Women 15% 7% Entertainment, M edia, Telecom & Clothing, Cosmeti Visual Arts cs, Jewelry & 4% Retail 17% Wholesale 3% 65% Latino Food & Beverage Auto & Vehicle 3% 20% Professional Personal Services Services (Day (Office, Med, Edu Care, Cleaning, Lang uage) cation) 20% 2% Arts & Crafts Production 2% Manufacturing <1% 20% African AmericanFrom Top: Lyn Genet Recitas, owner of Neighborhood Holistic in Harlem, NY; Carlos Costa, owner ofCosta Group Corps in Miami, FL and Cheryl Smith, owner of Cheryl’s Global Soul in NYC
Our Strong, Diverse Funding SourcesGrants: Capital: Revenue:• Government • Low-rate capital from • Interest and fee• Banks banks income• Private Foundations • Donations from • Public/private• Individual Donors individuals, corporati partnerships• Volunteers ons • Referral programs • SBA and Kiva
Accion Loan Process Step 1: APPLY Apply and quickly know eligibility through Accion’s innovative Scorecard. STEP 2: INTERVIEW Submit STEP 5: RELATIONSHIP Repayment documents and get interviewed by a loan begins and clients receives ongoing consultant to review strengths and provide business and financial education. advice Heesang Lee, an NY based Accion client and business owner STEP 3: REVIEW Application is STEP 4: DECISION Loan is dispersed reviewed considering: if approved or client is given advice to credit, character, collateral/cosigner, cash improve. flow, industry, and loan purpose.
Products andand Programs Products ProgramsProduct DefinitionEstablished Businesses Up to $50k(minimum 12 months)Emerging Businesses Up to $30K with outside cosigner(6 months not yetprofitable)Sprout Loan Home-based/incubator up to $5-*10K(< 6 months) without cosignerSecured Loans $500 and upSpecial Programs Women, Veterans, Green, Food and Beverage, Kiva*Up to $10,000 for food & beverage businesses in certain geographies
Basic Loan Requirements• Credit Score over 525 (FICO)• No more than $3,000 in past due debt*• No Bankruptcy in the last year• No Foreclosure in the last 2 years• No late payments on mortgage and rent in the last year• Start Up and Transition Requirements• Market Study and Financial Projections for Start-Ups (Accion provides templates) Natasha, Accion client and owner of Natasha Wozniak Jewelry. Brooklyn, NY*Except The Sprout Loan, which cannot exceed $500
Required Documents• Two Forms of personal identification• Most recent utility bill from home and business• Past 3 months of personal & biz bank statements• Mortgage note showing terms• Market study/business plan and 12 months• Financial projections (start up or sprout) “The biggest reward for me is seeing the enthusiasm from the benefits of• Internal financial statements my business by my clients and employees.”• Last two years tax returns (for loans over $10,000) –Jessie, Accion client and owner of Green City Growers Boston, MA
Affordable Loans • Loan process: 5 to10 business days* • Terms up to 60 months • ACH Monthly Payments • Interest rates: start at 8.99% average 11.99% • No prepayment penalties • Payments applied to principle and interest“I’ve attended three mentoring events andam genuinely humbled by the experience,it’s validation as a small-scale entrepreneurand as a woman to be able to interact withdistinguished CEOs and leaders in thefashion industry.”–Sandra, Accion client and designer atSandra Baquero talking about the ToryBurch Mentoring Events for Women. *Once all documents are collected
More Than a Loan • One-on-one: We provide coaching throughout the loan process on credit, cash flow and record keeping • Online: Free webinars and a monthly newsletter help create meaningful connections with our clients • Partnerships: We team up with other organizations to leverage resources and maximize strengths“With Accion, it was more than just aloan. Through promotional opportunities,Accion helped to get my business nameout there.”–Kari, Accion client and owner of MorrisKitchen
Loans for Veterans (New York Only) • Low rate up to 8.99% • Increased lending flexibility • Coaching and mentorship through SCORE, Veterans across America, and SBS
Bank Partnerships Nelson, Accion client and owner of Florida Atlantic Air Conditioning in Miami, FL
Sam Adams Brewing the American Dream • Business education • Access to mentors and networks • Seasonal product integration and catering Sandy’s business helps her provide for her family. When sales went down last summer, she decided to add cold slush and drinks to her menu to boost business. Sandy’s $2,000 loan from Accion, helped her purchase equipment necessary to expand her offerings and increase sales. Sandy, Accion client and owner of Lulu’s Sweet Shoppe in Boston, MA
Tory Burch Partnership• Educational events• High profile mentors “I have been so impressed with the mentors at the events. Every single one of them has said something memorable to me that has inspired action in my business, I can see that they really care and want to help us succeed.” Natasha, Accion client and owner of Natasha Wozniak Jewelry. Brooklyn, NY
Kiva.org• Loans up to $10,000• Flexible loan requirements• Publicity for your business Luiss road to self-employment was not easy. Once unemployed and homeless, Luiss life changed when he found work making deliveries for a local bakery. On the morning of September 11, he made his usual delivery to the World Trade Center when his truck got lost in the rubble of the failing buildings. Through Kiva, Accion lent Luis the money he needed to get his business back in shape. Luis, Accion client. New York, NY
Accion’s Online Presence• Over 6,000 Twitter followers twitter.com/accion_usa• 2,000 people “like” our Facebook page www.facebook.com/accionusa• 30,000 subscribe to our monthly newsletters www.accionusa.org/email• Over 40,000 visits a month to our website www.accionusa.org• Partnership with http://dinero.univision.com/pequena-empresa
A Win-Win-Win Situation• Accion can make a difference for your clients• Partnership and referral opportunities Andy, ACCION client and owner of Cambridge Art and Frames in Cambridge, Microloans MA Macro-Impact
To Refer a Business Owner Contact Erica Dorn at 646-833-4533 and email@example.com Refer to online application at www.accionusa.org/apply* Have client fax in paper application to 212-387-0277* Promote use of your unique referral ID and Accion will track and provide feedback.To get a unique ID code, contact us!