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Mfa week 3 presentation combined

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Presentation slides for week 3 of the San Diego Microfinance 101 course at Point Loma Nazarene University. Presentations by International Rescue Committee, CDC Small Business Finance, and ACCION......

Presentation slides for week 3 of the San Diego Microfinance 101 course at Point Loma Nazarene University. Presentations by International Rescue Committee, CDC Small Business Finance, and ACCION San Diego

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  • 1. International Rescue CommitteeCenter for Financial Opportunity
  • 2. 9,900,000 Refugees World Wide* Europe 1,733,700 N.Africa, C/SW Asia, Mid East 3,811,800 East Asia and the Pacific Africa 875,100 Americas & the 2,421,300 Caribbean 1,035,900*United States Committee for Refugees and Immigrants - December 31, 2006
  • 3. US Refugee Program
  • 4. IRC Resettlement Services Wide assortment of services from arrival to attainment of citizenship (up to five years) Primarily for refugees-- expanding to serve asylees and other immigrant populations
  • 5. Resettlement Offices
  • 6. IRC San Diego 5348 University Avenue, San Diego CA 92105 619-641-7510 Founded in 1975 Resettled > 20,000 refugees Wide spectrum of programs
  • 7. Refugee Arrivals 2007-2010 73,311US 74,652 60,192 48,281 1294 1052IRC/SD 788 400 2007 2008 2009 2010
  • 8. FY2010 Refugee Ethnic Breakdown
  • 9. IRC Center for Financial Opportunity Financial Security Bundled Services Case Management
  • 10. IRC Center for Financial Opportunity Microenterprise Development Overview “From Hardship to Entrepreneurship” - Microenterprise vs. Microfinance - Funding -Common businesses - Why is there a need?
  • 11. IRC Center for Financial OpportunityMicroenterprise Development: Client Characteristics- 47% Men, 53% Women- Regions: East Africa(50%), Iraq andMiddle East (30%), Other (20%)- In US less than 5 years: 58%- Low-Income: 90%- Previous Biz Experience: 40%-CA Minimum Wage: $8/hour
  • 12. IRC Center for Financial Opportunity Issues and Challenges for Refugee Entrepreneurs: • Access to Capital • Access to Technical Assistance • Access to Additional Services • Ongoing Support • Linguistically and Culturally Appropriate
  • 13. IRC Center for Financial Opportunity Microenterprise Development Loans - Character-based - Maximum Loan: $15,000 - Average Loan size: $7,500 - Loans made per year: 15 to 25 - Default Rate: 5%
  • 14. IRC Center for Financial Opportunity Microenterprise Development Technical Assistance -Advising and Consulting -Business Planning -Marketing -Licensing and Permitting -Bookkeeping
  • 15. IRC Center for Financial Opportunity Microenterprise and Financial Education: Credit Building Program -Credit Building loans $100 and $300 -Average Score at Program Entry: NA -Average Score after 6 Months: 642
  • 16. IRC Center for Financial Opportunity ExampleSaid from Somalia
  • 17. IRC Center for Financial OpportunitySameer from Iraq Example
  • 18. International Rescue Committee Center for Financial OpportunityJoel Chrisco, Program SupervisorJoel.chrisco@theIRC.org619-641-7510 Ext. 247 www.theIRC.org
  • 19. ACCION San DiegoLending. Supporting. Inspiring. Joe and Vi Jacobs Center 404 Euclid Avenue Ste. 271 San Diego, CA 92114 T: (619) 795-7250 T: (800) 967-4429 F: (619) 795-7260 www.accionsandiego.org
  • 20. ACCION’s History•ACCION San Diego is an affiliate of ACCIONInternational, an organization that began lending inLatin America in 1961•ACCION USA began a pilot program in New Yorkin 1991•ACCION San Diego office opened in 1994•Now located in 9 U.S. states•Each office is privately owned, funded & operated
  • 21. Services We Provide• Small business loans up to $35,000• Build or re-build positive credit history• Help transition clients to banks• Technical assistance• Referrals to other business services• Publicity/networking opportunities
  • 22. Where does ACCION get its money? • Private donations • Grants from foundations • Grants or low-interest loans from banks • City and government funds
  • 23. Our Eligibility Requirements• Live/work in San Diego County• Six months of business history or previous experience in the industry for start-ups• Income/expense documentation• Capacity to make payments• Reasonable credit report• Collateral and/or co-signer may be required dependent upon level of risk• Character
  • 24. How Much Will the Loan Cost?• Interest rate starts at 12% APR• Administrative fees (charged only at disbursal): •<$5,000: $75 maximum •>$5,000: 4% -6% of loan amount depending on loan is security. • $10-$25 minimum fees for securing interest in collateral
  • 25. TimelinesHow long will it take to get financing?• 48 hours for quick loans $300-$2,000•2 weeks for loans $2,001 to $35,000How long will I have to pay back the loan?• Depends on size of the loan• Typically 12-60 months
  • 26. Next Steps• Obtain application by mail, email or fax oron our website: www.accionsandiego.org• Compile and submit supportingdocumentation for loan request• Loan Officer will call to schedule site visit
  • 27. Additional Resources• SCORE – (619) 557-7272• Small Business Development Center – (619) 482-6391 or (760) 795-8735 (N. County)• Consumer Credit Counseling – 1-866-889-9347• Credit Agencies – Experian 1-800-311-4769 – Equifax 1-800-685-1111 – Trans Union 1-800-916-8800
  • 28. Questions?
  • 29. In uncertain times, be certain about your lending partner
  • 30. Small Business Loans
  • 31. CDC Small Business Finance background and rolesCDC’s are financial intermediaries certified by theSBA to administer SBA 504 loans (commercial realestate loans), and other alternative loan products.CDC roles: direct lending, loan intermediary, loanpackaging,Creative financing: partnering with other lendersto complete request, loan guaranteesStatistics (loan volume, conversion ratio, defaultrate, interest rates)
  • 32. Loan Evaluation What is underwriting??? How do you decide who to finance? Areas of Evaluation (credit, cash flow, collateral, experience, capital, character, business plan, co-signer, economic conditions)
  • 33. Credit Credit www.annualcreditreport.com Know what is on your credit and make sure it’s all accurate Scores History How to establish good credit
  • 34. Capacity Historical profits of business as reported on tax returns. Projections. Outside sources of income: other employment, spousal income, military, disability, retirement, rental income, alimony, child support, etc.) Personal Liquidity.
  • 35. Capital Capital Owner’s injection Equity Balance sheet (retained earnings or equity) Equity requirements for existing businesses.
  • 36. Collateral What is collateral? How important is it? What if you don’t have collateral? Business and Personal Assets. How much equity do you have in your home?
  • 37. Experience How much experience do you need for a start up business? What is your background? What if you have no experience in the industry you are starting your business in?
  • 38. Character Character business history credit reports personal interview responsiveness references
  • 39. Business Plan What to include in a business plan. How important is a business plan? Projections
  • 40. Conditions How does the economy affect your industry? How recession proof is your business?
  • 41. Co-Signer To mitigate weaknesses in other areas, you can bring a co-signer on board to guarantee the loan. Requirements of a co-signer…stable income, good credit, possibly personal assets to secure loan.
  • 42. Success Story: San DiegoUnited Sports Center
  • 43. Creative PartneringWorld Famous Dog Wash
  • 44. Contact Information Susan LampingSenior Community Loan Officer Main line: (619) 291-3594 ext. 8639 Direct line: (619) 243-8639 slamping@cdcloans.com CDC Small Business Finance2448 Historic Decatur Road, Suite #200 San Diego, CA 92106