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

1. International Rescue Committee
Center for Financial Opportunity

2. 9,900,000 Refugees World Wide*
Europe
1,733,700
N.Africa, C/SW Asia, Mid East
3,811,800
*United States Committee for Refugees and Immigrants - December 31, 2006
Africa
2,421,300Americas & the
Caribbean
1,035,900
East Asia and
the Pacific
875,100
3,811,800

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
619-641-7510619-641-7510
Founded in 1975
Resettled > 20,000 refugees
Wide spectrum of programs

7. 60,192
74,652
73,311
Refugee Arrivals 2007-2010
US
48,281
2007 2008 2009 2010
400
788
1294
1052
IRC/SD

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?
Entrepreneurship”

11. IRC Center for Financial Opportunity
Microenterprise Development: Client Characteristics
- 47% Men, 53% Women
- Regions: East Africa(50%), Iraq and
Middle East (30%), Other (20%)Middle 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 Technical Assistance
• Access to Additional Services
• Ongoing Support
• Linguistically and Culturally
Appropriate

13. IRC Center for Financial Opportunity
Microenterprise Development
Loans
- Character-based- 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-Credit Building loans $100 and $300
-Average Score at Program Entry: NA
-Average Score after 6 Months: 642

16. IRC Center for Financial Opportunity
Example
Said from Somalia

17. IRC Center for Financial Opportunity
ExampleSameer from Iraq

18. International Rescue Committee
Center for Financial Opportunity
www.theIRC.org
Joel Chrisco, Program Supervisor
Joel.chrisco@theIRC.org
619-641-7510 Ext. 247

20. ACCION San Diego
Lending. Supporting. Inspiring.
Joe and Vi Jacobs Center
404 Euclid Avenue Ste. 271
San Diego, CA 92114San Diego, CA 92114
T: (619) 795-7250
T: (800) 967-4429
F: (619) 795-7260
www.accionsandiego.org

21. ACCION’s History
•ACCION San Diego is an affiliate of ACCION
International, an organization that began lending in
Latin America in 1961
•ACCION USA began a pilot program in New York•ACCION USA began a pilot program in New York
in 1991
•ACCION San Diego office opened in 1994
•Now located in 9 U.S. states
•Each office is privately owned, funded & operated

22. 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

23. Where does ACCION get its money?
• Private donations
• Grants from foundations• Grants from foundations
• Grants or low-interest loans from banks
• City and government funds

24. 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• Income/expense documentation
• Capacity to make payments
• Reasonable credit report
• Collateral and/or co-signer may be required
dependent upon level of risk
• Character

25. How Much Will the Loan Cost?
• Interest rate starts at 12% APR
• Administrative fees (charged only at disbursal):
•<$5,000: $75 maximum•<$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

26. Timelines
How long will it take to get financing?
• 48 hours for quick loans $300-$2,000
•2 weeks for loans $2,001 to $35,000
How long will I have to pay back the loan?
• Depends on size of the loan
• Typically 12-60 months

27. Next Steps
• Obtain application by mail, email or fax or
on our website: www.accionsandiego.orgon our website: www.accionsandiego.org
• Compile and submit supporting
documentation for loan request
• Loan Officer will call to schedule site visit

28. Additional Resources
• SCORE
– (619) 557-7272
• Small Business Development Center
– (619) 482-6391 or (760) 795-8735 (N. County)– (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

29. Questions?

30. In uncertain times, be certain about your lending partnerIn uncertain times, be certain about your lending partner

31. Small Business Loans

32. CDC Small Business Finance
background and roles
CDC’s are financial intermediaries certified by the
SBA to administer SBA 504 loans (commercial real
estate loans), and other alternative loan products.
CDC roles: direct lending, loan intermediary, loan
packaging,
CDC roles: direct lending, loan intermediary, loan
packaging,
Creative financing: partnering with other lenders
to complete request, loan guarantees
Statistics (loan volume, conversion ratio, default
rate, interest rates)

33. Loan Evaluation
What is underwriting???
How do you decide who to finance?
Areas of Evaluation (credit, cash flow,Areas of Evaluation (credit, cash flow,
collateral, experience, capital,
character, business plan, co-signer,
economic conditions)

34. Credit
Credit
www.annualcreditreport.com
Know what is on your credit and make sure it’s all
accurateaccurate
Scores
History
How to establish good credit

35. Capacity
Historical profits of business as reported on tax
returns.
Projections.
Outside sources of income: other employment,Outside sources of income: other employment,
spousal income, military, disability, retirement, rental
income, alimony, child support, etc.)
Personal Liquidity.

36. Capital
Capital
Owner’s injection
Equity
Balance sheet (retained earnings or equity)Balance sheet (retained earnings or equity)
Equity requirements for existing businesses.

37. Collateral
What is collateral?
How important is it?
What if you don’t have collateral?
Business and Personal Assets.Business and Personal Assets.
How much equity do you have in your home?

38. 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 areWhat if you have no experience in the industry you are
starting your business in?

39. Character
Character
business history
credit reports
personal interviewpersonal interview
responsiveness
references

40. Business Plan
What to include in a business plan.
How important is a business plan?
Projections

41. Conditions
How does the economy affect your industry?
How recession proof is your business?

42. 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.credit, possibly personal assets to secure loan.

43. Success Story: San Diego
United Sports Center

44. Creative Partnering
World Famous Dog Wash

45. Contact Information
Susan Lamping
Senior Community Loan Officer
Main line: (619) 291-3594 ext. 8639
Direct line: (619) 243-8639Direct line: (619) 243-8639
slamping@cdcloans.com
CDC Small Business Finance
2448 Historic Decatur Road, Suite #200
San Diego, CA 92106