4. Is microlending the same as small biz lending?
Not really …
99% of U.S.
businesses employ
fewer than 500
employees
91% employ fewer
Microentreprenuers than 5 employees
employed 50% (microenterprises)
of all private sector
Eddie, Accion Client and employees and
owner of Dardanel generated 64% of
Mediterranean Restaurant, net new jobs over
New York City past 15 years!
> 1% of 20 mm microenterprises receives
credit or business assistance
www.accionusa.org 4
5. Barriers to Traditional Capital
Little or no credit history
Minimal financial
documentation
Small capital needs
“Accion gave me the chance High risk industries
to start my credit history for
the first time, accepting my ITIN #, Under two years in
and helping my business to grow.” business
-Jose Araujo, Deerfield Beach, FL
www.accionusa.org 5
6. Impact of Microfinance
We create sustainable
businesses
We create employment in low-
to moderate-income
communities
We create fair wages “Women entrepreneurs
are equally strong and are
We improve their quality of life able to realize what ever goal they
put in their minds.”
-Lucia, Accion loan recipient and
owner of La Licuadora Restaurant.
Miami, FL
Source: 2010 MicroTest Outcomes Survey in partnership with the Aspen Institute
www.accionusa.org 6
8. Accion: National Leader Local Impact
We believe that access to capital helps entrepreneurs:
Create jobs in their communities
Build assets for their families; and
Contribute to local economic development
Eddie, Accion client and owner of Fauzia, Accion client and owner of Fauzia
Dardanel Restaurant in Manhattan, NY Heavenly Delights in Bronx, NYA
19,000 and 121.2 MM disbursed nationwide!
www.accionusa.org 8
9. Credit Continuum
* Credit cards, Microloans and Bank Equity and Investments
Loans build a credit history.
Bank/SBA Loans
Accion MICROLOANS
Credit Cards
Loan Sharks
Pawn Shops
Friends & Family
Jason, Accion client and owner
Personal Savings/ Equity of a home-based soap
company
www.accionusa.org 9
10. Accion Network
Established in 1991 as the domestic arm of Accion
International, a global microfinance organization
Accion Network represents 30% of micro-loan volume in the U.S.
www.accionusa.org 10
11. Who do we lend to?
Beauty & Salon
Lyn Genet Recitas, owner of
Services
Neighborhood Holistic in Transportation 7%
Harlem, New York 15%
Construction, Repair &
Electronics
7%
40% Women
Clothing, Cosmetics, J Entertainment, Media,
Carlos Costa, owner of Costa ewelry & Retail Telecom & Visual Arts
Group Corps in Miami, Florida 17% 4%
Wholesale
3%
65% Latino Auto & Vehicle
Food & Beverage
20% 3%
Personal Services (Day
Care, Cleaning, Language)
2%
Professional Services Arts & Crafts
Cheryl Smith, owner of Cheryl’s (Office, Med, Education) Production
Global Soul in New York, New York 20% 2%
Manufacturing
<1%
20% African American
www.accionusa.org 11
12. Strong, Diverse Funding Sources
GRANTS CAPITAL REVENUE
• Government • Low-rate capital • Interest and fee
• Banks from banks income
• Private • Donations from • Public/private
Foundations individuals, corpo partnerships
• Individual Donors rations • Referral
• Volunteers • SBA and Kiva programs
www.accionusa.org 12
14. Loan Process
STEP 1: APPLY STEP 2: INTERVIEW
Apply and quickly know Submit documents and get
eligibility through Accion’s interviewed by a loan consultant to
innovative Scorecard. review strengths and provide advice.
STEP 3: REVIEW
Application is reviewed considering:
credit, character, collateral/cosigner,
cash flow, industry, and loan purpose.
Heesang Lee, a New York based
Accion client and business owner
STEP 5: RELATIONSHIP
Repayment begins and clients STEP 4: DECISION
receives ongoing business and Loan is dispersed if approved or
financial education. client is given advice to improve.
www.accionusa.org 14
15. Products and Programs
Product Definition
Established Businesses up to $50k
Start-ups up to $30K with outside cosigner
Sprout Loan Home-based/incubator up to
$5/10K without cosigner*
Secured Loans $500 and up
Special Programs Women, Veterans, Green,
Immigrants, Kiva
*Up to $10,000 for food & beverage businesses in certain geographies
www.accionusa.org 15
16. Basic Requirements
Credit Score over 575 (FICO)
No more than $3,000 in past due debt*
Natasha, Accion client and
No Bankruptcy in the last year owner of Natasha Wozniak
Jewelry. Brooklyn, NY
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)
*Except Sprout loan, cannot exceed $500
www.accionusa.org 16
17. Required Documents
Under 10k: (if applicable)
• 2 Forms of personal identification
• Most recent utility bill from home &biz
• Past 3 months of personal & biz bank
statements
• Mortgage note showing terms
• Market study/biz plan and 12 months “The biggest reward for
financial projections (start up or sprout) me is seeing the
enthusiasm from the
• Internal financial statements benefits of my business by my
clients and employees” .
Over 10k (all above, plus:) –Jessie, Accion client and owner
of Green City Growers. Boston,
• Tax returns (previous 2 years if available) MA
www.accionusa.org 17
18. Affordable Loans
• Loan process: 5-10
business days*
• Terms up to 60 months
• ACH Monthly Payments
“I’ve attended three mentoring events and
am genuinely humbled by the experience, • Interest rates: start at
it’s validation as a small-scale 8.99% average 11.99%
entrepreneur and as a woman to
be able to interact with distinguished • No prepayment penalties
CEOs and leaders in the fashion industry.”
–Sandra, Accion client and designer at • Payments applied to
Sandra Baquero talking about the Tory Burch principle and interest
Mentoring Events for Women.
*Once documents are collected
www.accionusa.org 18
19. More than a Loan
One-on-one: we provide
coaching throughout the loan
process on credit, cash flow,
& record keeping.
Online: free webinars, tips,
tools, & newsletter create
meaningful connections with
“With Accion, it was more our clients
than just a loan. Through
promotional opportunities, Accion
helped to get my business name out
Partnerships: teaming up
there.” with organizations leverages
resources and maximize
–Kari, Owner of Morris Kitchen and
client. strengths
www.accionusa.org 19
21. Bank Partnerships
Nelson, Accion client and owner of Florida Atlantic Air
Conditioning in Miami, FL
www.accionusa.org 21
22. Samuel Adams Brewing the American Dream
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 menu and offer cold
slush and drinks and help boost
Business Education up sales. Sandy’s $2,000 loan
from Accion, helped her purchase
equipment to speed up production
Access to Mentors and boost sales.
and Networks -Sandy, Accion client and owner
of Lulu’s Sweet Shoppe. Boston,
MA
Seasonal Product
Integration / Catering
Samuel Adams Brewing the American Dream: www.samueladams.com/btad
www.accionusa.org 22
23. Tory Burch
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
www.accionusa.org 23
24. Kiva.org
Loans up to
$10,000
Luis's road to self-employment was not easy. Once
unemployed and homeless, Luis's life changed
Increased
lending flexibility 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
Publicity when his truck got lost in the rubble of the failing
buildings. Through Kiva, Accion lent Luis the money need
to get his business back in shape.
-Luis, Accion client. New York, NY
www.accionusa.org 24
25. Loans for Veterans (NY Only)
Low rate up to
8.99%
Increased lending
flexibility
Coaching and
mentorship through
SCORE, Veterans
across America,
and SBS
www.accionusa.org 25
26. ACCION’s Online Presence and Reach
• Over 6,000 Twitter followers
• 2,000 people “like” our Facebook page
• 30,000 subscribe to our monthly newsletters
• Over 40,000 visits a month to our website
• Partnership with
www.accionusa.org 26
27. A Win-Win-Win
• Accion can make a difference for your clients
• Partnership opportunities
• What makes a successful referral?
Microloans Macro-
Impact
Andy, ACCION client and
owner of Cambridge Art and
Frames in Cambridge, MA
www.accionusa.org 27
28. To Refer a Business Owner
Contact YOUR NAME at XXX-XXX-XXXX and
xxxxxxx@accionusa.org
Refer to online application at
www.accionusa.org/apply *
Have client fax in paper application to
XXX-XXX-XXXX
* Promote use of your unique referral ID and Accion will track and provide feedback.
To get a unique ID code, contact us!
www.accionusa.org 28
Notes de l'éditeur
DIVIDER SLIDE
We create sustainable businesses: The business survival rate among ACCION USA clients is 98% for established businesses and 89% for start-up businesses.We create employment in low-to moderate-income communities: On average, each ACCION USA small business loan recipient creates or maintains 3.4 jobs on average (including the borrower).We create fair wages: Jobs created by ACCION USA borrowers pay 33% more ($10.80/hour) than the federal minimum wage ($7.25/hour).We improve their quality of life: Clients reported a 19% median increase in take-home pay in the midst of economic distress.
DIVIDER SLIDE
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
2010 data: 618 loans 4.5 millionNational networkThe 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 organizationThe Network has supported 24,600 with $277 MM Includes a number of stand alone microlenders throughout the country and an online lending platform
ACCION USA’s clients range from small home-based entrepreneurs to established storefront business ownersAlthough 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-wide38% women70% Minority35% home-basedMajor 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/bev148 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
32% self sufficiency
DIVIDER SLIDE
Nelson Lorenzo emigrated from Cuba eight years ago and from that moment struggled to grow his air conditioning business, Florida Atlantic Air-Conditioning Group. A family run business, his daughter handles the accounting and his son-in-law is the main technician. When Chase bank realized they would not be able to work with Nelson, they referred him to ACCION USA where he received a loan to purchase a new duct cleaner. This purchase brings Nelson one step closer to his ultimate dream of operating a business with the most energy efficient machinery available.After receiving financing, we received a thank you letter from Nelson Lorenzo and his team: Nelson's letter (Translated from Spanish): “We had been knocking on many doors, and nobody offered any help, guidance, or support. We had passed difficult moments, betrayal, fraud and excessive expenditure. Even with all these problems, we were able to stay calm. Fortunately we were able to learn from these blows. We continued forward, always with our gaze fixed forward on the sky. After all of the disappointments, we finally saw the light at the end of the tunnel. ACCION USA was that light, and its contributors, the angels we had always been searching for." "Today we are grateful to know that there are still people that see the sweat of a humble entrepreneur who opens his own business with focus, motivation, ideas and pride and without a cent in his pocket. It is true what Fabiana Estrada of ACCION USA said: 'The true American Dream is to start your own business.' It seems that we have finally been given light and life to our American Dream. We would like to extend our gratitude to the staff and supporters of ACCION USA that make all of this possible. May God bless you, your generous contributions, and the entrepreneurs of tomorrow.”-Alberto, Ivette and Nelson -- Florida Atlantic Air Conditioning.
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 CosmeticsMillard Drexler, CEO of J CrewClient 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. For 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 base30,000 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
Points to Review:“credit contiuum” Affordability & SpeedACCION is more than a loan, we provide support services, unique programs and help clients build creditRelationshipsWhat makes a successful referral? TELL A CLIENT STORY! Partnership Opportunities:Mutual ReferralsJoint WebinarsFinancial Education SeminarsSocial Media and NewslettersFeature in ACCION’s monthly newsletterReferral Incentive Program (if applicable)Small loan can make a difference for your clients’ business (recap on example loan purposes such as investment in tangible equipment and assets, to participation in trade shows, to inside rennovations of a space)