2010 data: 618 loans 4.5 million National network The extended U.S. ACCION Network has supported 24,600 U.S. small businesses with $277 million. This network of licensees serving TX, LA, NM, CO, AZ, IL, and CA and our online lending platform provides a national footprint for microloan borrowers. ACCION Network = 30% of micro-loan volume in the U.S. Established in 1991 as the domestic arm of ACCION International, a global microfinance organization The Network has supported 24,600 with $277 MM Includes a number of stand alone microlenders throughout the country and an online lending platform
Which of these help build personal credit? - What are the average bank rates? The loan rate for small businesses is based on the market rate for loans and is fundamentally related to the long-term federal borrowing rate. In early 2011, this long-term rate was at a low of about 4 percent, versus a 7.5 percent historical average. Due to the riskiness of small business loans, their rate is always several points above the long-term rate. According to the Federal Reserve, the average in early 2011 for small business loans was 8.4 percent for loans less than $100,000 and 7.6 percent for loans between $100,000 and $1 million. Peer to Peer (7-30%) Read more here: http://www.businessmoneytoday.com/articles-advice/2011/Peer-to-Peer-Loans-For-Small-Business.html loan sharks have been quoted by news sources as high as 300 - 600% APR, and pawn shops not being much better. - While credit cards are a good options for short term debt, with fees and rates that can push close to 30%, microloans are a better option for growing small businesses
ACCION USA’s clients range from small home-based entrepreneurs to established storefront business owners Although ACCION USA provides credit without discrimination to everyone who meets our lending criteria, we specialize in working with those who most often lack access to credit-women, immigrant, and minority business owners: 89% repayment rate organization-wide 38% women 70% Minority 35% home-based Major industries include: transportation, food and beverage, professional services, beauty salons, retail sales, wholesale, media, communications & entertainment, education Number % Industry 207 14% Transport 200 14% food/bev 148 10% Prof Services 118 8% retail stores 103 7% beauty salon services 102 7% Retail sales 97 7% other services 96 7% construction/repair 87 6% Clothing/Material Prod 53 4% Wholesale 49 3% medical services 44 3% arts/crafts production 38 3% entertainment 29 2% media 24 2% jewelry 20 1% electronics 15 1% Cleaning 11 1% education 10 1% telecommunications 1451 100% Total Active of Known Industry
• Capital- how much capital is already invested in the business? The 80/20 Rule. • Collateral- how much and what type to secure the loan? Land, equipment, home equity, etc. • Cash Flow- is the business cash flow positive? If not, when? 12-24 month projections. Capacity to repay the loan from earnings? • Credit History- borrower’s credit and background? Skeletons in the closet? • Character- who is the borrower and what is their background? Are they experienced? Honest? Integrity? • Conditions (Economic)- general economic conditions and those specific to the industry and business?
A credit score is a quick way to assess your credit-worthiness (should you get a loan or not?) While credit scores are important, remember that the information included in the credit report is what is most important . Scores will fluctuate up and down over time. The FICO score (which stands for Fair Isaac Corporation) is still the most widely used by lenders as a minimum cut off point to consider your application for financing. Depending on the bank, this minimum may range from 650 – 750, generally speaking. ACCION’s minimum FICO requirement is 575. The pie graph shows the following factors that affect your credit score. Payment History (35% of score)- this is the most important piece of your score. If you have late payments your score will drop dramatically. Always pay on time! Amounts Owed (30% of score)- this refers to the amount of available credit you have. You always want to try to have 65% available credit (meaning that you do not carry a balance that is over 35% of your limit). Your score drops dramatically if you are at the limit on all of your accounts (if you have used all your credit). Length of Credit History (15% of score)- the longer you have had a history, the better your score will be (taking into account the other pieces of the pie). Rule of thumb- never close your oldest account because you built your history with this account. Also don’t close the account you use all the time because this is also what you are currently using to build your credit history. Types of Credit Used (10% of score)- important to use multiple types of credit- both revolving and installment- shows that you can manage different types of credit. New Credit (10% of score)- opening too many accounts at once can hurt your score- it looks like you are in desperate need of credit and money. A new scoring model called VantageScore has been gaining momentum. VantageScore was created by the three major credit bureaus as an alternative to the FICO score. VantageScore credit scores run on a scale of 510 to 990 and offer a corresponding letter grade. Be Aware of this difference in scoring, as you might be receiving a 700 Vantage Score, which is more equivalent to high 500s/low 600s in FICO terms. VantageScore takes into account multiple aspects of your credit history, but weighs them differently than a FICO score does. Business credit reports and credit scores are completely separate from your personal credit report and credit scores. A business credit report is specific to a business's debt repayment and public records, such as bankruptcies or tax liens. You can start building your business credit by establishing your business as a separate entity, to separate your business credit profile from your personal credit profile (LLC or Corporation). As a small-business owner, personal credit is almost always considered when evaluating your ability to qualify for financing (even if in conjunction with a business credit profile).
-Pay on time: Make sure to mark your calendar and always pay your credit card bills on time. Don't let yourself fall 60 days or more behind because many of the protections afforded by the new CARD ACT will not apply. If you can't make a payment, call your credit card company and ask for a hardship arrangement. -Keep a healthy percentage of available credit: A healthy percentage is usually defined as between 40 – 70%. Try to keep balances below 35% of your total credit limit. Make an extra effort to pay down existing balances by paying more than the minimum every month. -Diversify your trade lines: I t is important to have both installment credit (loan) and revolving credit (credit cards) to build a strong credit history. Showing that you can manage both types of credit will strengthen an application for business financing. -Pay down credit cards one by one. First, make a list of all your accounts, including the balance and interest rate. Several participants may have questions about how to go about determining which card to pay off first. Emphasize two points: Note the varying interest rates on your credit cards, and start paying off the card with the highest interest rate first. -Pay down balances on accounts that are the least late (your recent debt). What happens today has more of an impact on your credit score than what happened a year ago . - Be proactive in calling your creditors! If you are having difficulty in keeping up with payments, or have had a recent change in your interest rate, call your creditor to negotiate a reasonable payment plan or a lower interest rate. As of August 2010, credit card issuers must reevaluate interest rate increases due to changes in your credit risk or market condition every six months. If you have been paying well for a year, call and try to get your interest rate decreased.
When you apply for a business term loan, lenders will look for what they call debt service coverage. What this means is how much, at the end of the month, you can afford putting toward a loan payment. ACCION offers installment loans, which carry fixed monthly payments of principle and interest. At the end of the day, ACCION will look to see that your net income is at least 2 times the amount of the projected monthly loan payment. Your business net income can be defined as your sales minus your cost of sales (of goods sold), and other expenses. ACCION will do a global cash flow analysis, taking into account both your business and personal income and expenses to determine your coverage for a monthly loan payment.
One of the ways that ACCION assesses cash flow available for loan coverage is through your three most recent business and personal bank statements. Therefore, it’s important to maintain healthy bank statements. While insufficient fund fees are not a disqualifier, they may weaken your application. Make an effort to deposit all of your sales and withdraw your regular expenses from your business checking account so that a lender can notice trends.
Heesang Lee, a New York based Accion client and business owner Heesang Lee, a New York based Accion client and business The scorecard and Online Lending Application allows for quick and efficient decision-making while managing to a 90% repayment rate One-on-one interaction with multi-lingual loan consultants creates an application that speaks to clients unique needs and strengths Decision Factors include credit, character, collateral / cosigner, cash flow, industry, and loan purpose Relationship building with clients (loan eligible and those working toward eligibility) and prospects through “tip of the month” newsletters, and coaching events with our partners.
Start-up and Transition Reqs 6 or more months of business revenue (for storefront locations only) Financially independent co-signer 2 nd source of income from client or household member A market study and 12-months of financial projections (ACCION Templates Provided) Technical expertise and commitment to the business All required licenses and permits
The Boston Beer Company partnered with ACCION USA in 2008 to create Samuel Adams Brewing the American Dream, a program designed to provide food, beverage and hospitality businesses with access to: **read bullet points from power point** Client story: Award-winning chef Sandy Russo opened Lulu's Sweet Shop in February of 2010 with the innovative idea to use old-fashioned baking and mixing techniques to make cupcakes and other cake products. As a hard working single mom, Sandy’s business is crucial to help provide for her family, so when sales went down last summer, Sandy decided to make a change on her summer me...nu and offer cold slush and drinks and help boost up sales. As summer got closer and closer, Sandy struggled to find anyone who would lend her the capital needed to buy the ice machines needed for her business. About to lose all hope, Sandy found ACCION USA. At ACCION Sandy met her business development officer, Elizabeth, who worked with Sandy to help her learn more about her credit history and understand alternative, less expensive ways to finance her equipment purchases. Earlier this year, Sandy received a $2,000 loan from ACCION, which she used to purchase the ice machine and a package of six flavors as well as a chocolate tempering machine to speed up her production of cake pops and make it less labor intensive. These important steps helped Lulu's to gear up for the busy summer tourist season. Currently, Sandy has drawn much inspiration from the support she has received from the Brewing the American Dream program with ACCION USA & Samuel Adams, who have provided opportunities for catering and media exposure for Lulus.
Russell Simmons, owner of Rush Communications Inc. Bobbi Brown, CEO of Bobbi Brown Cosmetics Millard Drexler, CEO of J Crew Client story: Natasha began working as an artist at fifteen, and her passion for design has been a journey ever since. From this early age, she knew she wanted to work in metal, and learned the art through a variety of sources, from university schooling in Wisconsin to field work in Nepal alongside Buddhist statuary makers. Natasha began her career in jewelry as a bench jeweler in New York, churning out rings and earrings by the hundreds and thousands for various designers. After gaining the necessary industry experience, Natasha decided to work independently, designing and creating her hand-fabricated jewelry collection in her own studio. Natasha now sets her own schedule and designs her own pieces, among them unique engagement rings, work for select galleries, and new wall pieces. Her entrepreneurial spirit and uniquely-crafted pieces have brought Natasha nationwide success. She travels all over the country for jewelry and design shows, and her work is now displayed in galleries in multiple states. However, in early 2010, Natasha needed help straightening out her finances, but couldn’t get a traditional bank loan. One day after reading an article about the Tory Burch foundation, Natasha learned about ACCION USA and applied for a loan via their online platform. She was quickly approved for a loan of $5,000, and is now working closely with ACCION USA to get the business side of her artistic passion on track; she has been part of all the Tory Burch and Friends Mentoring events which have helped her business thrive. “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,” said Natasha. “I can see that they really care and want to help us succeed.”
For Luis Zepeda Alvarez, a microloan paved the road to self-renewal. F or over seven years, Luis has woken at 2:00 a.m. to begin delivering baked goods to delis and restaurants throughout New York. Although the streets are still dark, Luis doesn't mind the early start — it's a small price to pay for the independence that owning his own business provides. Luis's road to self-employment was not easy. Once unemployed and homeless, Luis's life changed when he found work making deliveries for a local bakery. His regular route included a morning stop at New York's World Trade Center, and on September 11, 2001, he made his usual 8:30 a.m. stop. Luis was walking to his second stop before the attacks; his truck, meanwhile, got lost in the rubble. Rather than face unemployment for a second time, Luis decided to begin his own delivery service. But Luis didn’t have the cash to buy a delivery van — and no bank would lend to him. AUSA recognized Luis’ entrepreneurial spirit and valued his experience enough to give him a loan to purchase his first truck. Luis's business has grown steadily ever since. He now runs three daily delivery routes and has hired other employees. Ten years ago, Luis was depending on spare change. Today, he relies on himself and is proud of the life he is leading, the future he is creating for his family, and the opportunities he is building for his business and community.
Partnering with ACCION provides visibility beyond our active client base 30,000 subscribe to our monthly newsletters > This includes a wide range of partners, funders but mostly entrepreneurs. Univision.com> we have partnered to provide spanish speaking entrepreneurs with monthly articles on financial education. We also have a weekly blog
Accion cliente presentacion_final- spanish
Accion Líder de las microfinanzas en EEUUNombreTítuloJunio xx, 2012
Agenda• ¿Qué es Accion?• ¿Cómo prepararse para un prestamista: Crédito y flujo de fondos• Los productos de Accion• Más que un préstamo: Un programa único de oportunidades
La red de Accion Establecida en 1991 como la división nacional de Accion International, una organización micro financiera globalLa red de ACCION representa el 30% del volumen de los micro-préstamos en EE.UU
Una visión general de la continuidad del crédito*Las tarjetas de crédito, los micro préstamosy préstamos bancarios permiten construir el Equidad e inversioneshistorial de crédito Préstamos bancarios SBA MICRO PRÉSTAMOS DE ACCION Tarjetas de Crédito Préstamo alto riesgo Casas de empeñoFamilia y amigosFinanciación colectiva Jesse, recipient of the SproutAhorro personal Loan at ACCION, owner ofEquidad Brooklyn Taco. Manhattan, NY Jason, un cliente de Accion y propietario de una empresa de jabón desde su domicilio
¿Porqué Accion? • Historial de crédito limitado • Documentación financiera limitada • Necesidad de montos bajos • Industrias de alto riesgo”Quería crear un espacio amigable para todos”, dijo • Menos de dos años de operaciónLyn, que empezó hace dos años su estudio con laayuda de su primer préstamo para pequeñasempresas de Accion. La empresa fue rentable un • Flexible, prestamista para laaño después de su iniciación y empleó a docetrabajadores de media jornada”. Ella continuódiciendo, “Eso es tan importante como crear un comunidadtrabajo enriquecedor para mi“. • Dedicado a las empresas- Lyn Genet Recitas, propietaria deNeighborhood Holistic en Harlem operadas desde el hogar
¿A quién le ofrecemos préstamos?¿Qué tipo deempresa tieneo deseainiciar? 20% African American
¿Qué buscan los prestamistas? Las C para los préstamos ¡Su capacidad y voluntad de devolver la deuda! 1. Crédito 2. Cash/Flujo de fondos 3. Capital 4. Colateral 5. Carácter
El crédito de hoy: Sistemas de puntaje FICO Scoring Factors Nuevo crédito 10% Historial de pago 35% 30% Monto de deuda 15% Longitud del historial de 10% Clases de créditos utilizados crédito Todavía el FICO es el sistema más usado entre los prestamistas, con un alcance de 300 a 850 puntos
Key Strategies for Managing Credit Estrategias clave para la gestión del crédito• Pagos a tiempo• Mantener un porcentaje disponible en el crédito rotativo• Diversificar las líneas comerciales• Disminuir la deuda de las tarjetas de crédito• Ser proactivo llamando a los acreedores• Revisar anualmente si hay errores en los reportajes de crédito en www.annualcreditreport.com• Visite www.myfico.com para ver una copia de su puntaje de crédito con la FICO
Para considerar: Cobertura para el pago de préstamo • ¿Su empresa puede realizar los pagos del crédito? • ¿Son los ingresos netos dos veces más que el pago del préstamo? • ¿Puede pagarlo usted solo, además de cubrir sus gastos personales?
¿Cuánto sería su pago mensual? Monto de $2,000 $5,000 $10,000 $20,000 capital Monto total $2,130 $5,280 $10,610 $20,910 (incluye gastos de gestión y UCC ) Plazo 12 24 30 40 Tasa de 0.75 0.75 0.75 0.75 interés mensual Pago $186 $241 $396 $607 mensual
Para considerar: Estados de cuenta bancarios• ¿Son los depósitos mayores que los débitos?• ¿Existen cargos por insuficiencia de fondos (NSFs)?• ¿Suben o bajan los balances con el tiempo?• ¿Cuáles son los gastos frecuentes?
Ejemplo de un análisis de su estado de cuenta bancario Ejemplo de un análisis de la cuenta bancaria personal:
Proceso de préstamo de Accion Heesang, un cliente de Accion en Nueva York
Products and ProgramsProductos y programasProducto DefiniciónEmpresas establecidas Hasta $50k(> 6 meses)Empresas emergentes Hasta $30K con aval(> 6 meses pero aún norentables)Préstamos de iniciación En domicilio/incubadora hasta $5-*10K sin(< 6 meses) avalPréstamos seguros $500 y másProgramas especiales Mujeres, veteranos,ecológicos, alimentos y bebidas, KivaConsejos crediticios Accion puede ayudarlo a reparar su crédito
Requisitos básicos para un préstamo• Propietario de empresa registrado• Puntaje crediticio mayor de 525 (FICO)• No más de $3,000 de deuda*• Libre de quiebra en el último año• No haber sido ejecutado en los últimos 2 años• No haber hecho el pago de la hipoteca o el alquiler con atraso en el último año Natasha, cliente de Accion y propietaria de Natasha Wozniak Jewelry. Brooklyn, NY *Con excepción del préstamo de iniciación que no puede exceder $500
Documentos necesarios• Dos formas de identificación personal• Último pago de las utilidades del hogar o empresa• Últimos tres meses de los estados de cuentas bancarios personales y comerciales• Carta con los términos de la hipoteca• Contrato de la empresa “Mi mayor recompensa es ver a mis clientes y empleados entusiasmadosPréstamos de lanzamiento e iniciación por los beneficios de mi empresa”.• Estudio de mercado/plan de trabajo y 12 –Jessie, cliente de Accion y propietaria de meses de proyecciones financieras Green City Growers Boston, MAPréstamos mayores de $10,000• Estados financieros y los dos últimos años de la declaración de impuestos
Préstamos asequibles • Duración del proceso: 5 a 10 días hábiles* • Plazos hasta 60 meses • Pagos automáticos opcionales • Tasas de interés fijo: comienzan en 8.99%, con un promedio de 11.99% • Costos de cierre de 3-5% o $100 para el programa SBACuando Sandra se mudó a la ciudad deNueva York, trató de obtener un préstamo • No existen penalidades por prepagobancario. Como muchos otros empresariosinmigrantes, Sandra no tenia un historial de • El monto del pago se aplicará para elcrédito formal y no recibió ayuda delbanco.”Fue muy deprimente sentir que no capital y el interéspodía continuar siendo una diseñadora demoda porque no podía tener un crédito”,Sandra recuerda.–Sandra, cliente de Accion y diseñadora en Sandra *Una vez recibido toda la documentaciónBaquero comenta cómo llegó a Accion
Más que un préstamo • Personal: Ofrecemos instrucción durante el proceso del préstamo sobre crédito, flujo de fondos y el mantenimiento de los registros. • En línea: Talleres en la web gratis y boletines de informes mensuales que ayudan a crear conexiones con nuestros clientes“Con Accion, fue más que un simplepréstamo. Con las oportunidades que • Asociaciones: Nos agrupamos conofrecían las promociones, Accion me otras organizaciones para hacerayudó a promover el nombre de laempresa ” apalancamiento con nuestros recursos y maximizar fortalezas.–Kari, cliente de Accion y propietaria deMorris Kitchen
Sam Adams Brewing the American Dream • Instrucción para empresas • Acceso a mentores y redes sociales • Integración de los productos de la estación y abastecimiento
Asociación con Tory Burch• Eventos de instrucción• Mentores calificados “He estado muy impresionada con los mentores de los eventos. Cada uno de ellos me ha dicho algo memorable que inspiró acción en mi empresa, me doy cuenta que realmente les importamos y nos quieren ayudar a ser exitosos”. Natasha, cliente de Accion y propietaria de Natasha Wozniak Jewelry. Brooklyn, NY
Kiva.org• Préstamos hasta $10,000• Requisitos flexibles para préstamos El camino de Luis para ser un trabajador autónomo no fue fácil.• Publicidad para su empresa Estaba sin trabajo y sin hogar, pero su vida cambió cuando encontró trabajo haciendo repartos para una panadería local. En la mañana del 11 de septiembre, hizo su reparto diario al World Trade Center, cuando su camión se perdió entre los escombros de los edificios que se derrumbaban. A través de Kiva, Accion le prestó el dinero que necesitaba para poder volver a hacer sus repartos. Luis, cliente de Accion. Nueva York, NY
Yelp• Eventos de instrucción para empresas• Asistencia con su perfil de Yelp
Préstamos para veteranos (solamente Nueva York) • Tasa de interés baja de 8.99% • Gran flexibilidad de préstamo • Instrucción y tutoría a través de SCORE, Veterans across America, y SBS