Accion: Leader in U.S. Microfinance

Gustavo Perez Eugui

Manager of Lending, New York and New Jersey

gperez@accioneast.org

(646) 833-4507

AGENDA

What is U.S. microfinance?

Who is Accion?

Accion Products

Strategic Partnerships

What is U.S. Microfinance?

Is Microlending the Same as Small Business Lending?

Microentreprenuers

employed 50%

of all private sector

employees and

generated 64% of

net new jobs over

past 15 years!

99% of U.S.

businesses employ

fewer than 500

employees

91% employ fewer

than 5 employees

(microenterprises)

> 1% of 20 mm microenterprises receives

credit or business assistance

Not really …

Moctar

Yara’s African Fabrics

New York, NY

Barriers to Traditional Capital

Little or no credit history Minimal financial

documentation Small capital needs High risk industries Under two years in business

“Now that I have an established farm and a credit history from the Accion loan, others are willing to invest in me.” -Gudelio, El Poblano Farm

Staten Island, NY

Impact of Microfinance

Source: 2010 MicroTest Outcomes Survey in partnership with the Aspen Institute

Accion Network

Accion Network represents 30% of micro-loan volume in the U.S.

Established in 1991 as the domestic arm of Accion

International, a global microfinance organization

Who do we lend to?

Professional Services

(Office, Med, Education) 20%

Food & Beverage 20%

Clothing, Cosmetics, Jewelry & Retail

17%

Transportation 15%

Beauty & Salon Services

7%

Construction, Repair & Electronics

7%

Entertainment, Media, Telecom & Visual Arts

4%

Wholesale 3%

Auto & Vehicle 3%

Personal Services (Day

Care, Cleaning, Language)

2% Arts & Crafts Production

2%

Manufacturing <1%

65% Latino

40% Women

20% African American

Ana Cecilia, My Blinds Today

Orlando, FL

Alexei, D&D Rehab Center

Miami, FL

Lynnette, Lynette Tyner Designs

Los Angeles, CA

Accion’s Products

STEP 1: APPLY

Apply and quickly know

eligibility through Accion’s

innovative Scorecard.

STEP 2: INTERVIEW

Submit documents and get

interviewed by a loan consultant to

review strengths and provide advice.

STEP 3: REVIEW

Application is reviewed considering:

credit, character, collateral/cosigner,

cash flow, industry, and loan purpose.

STEP 4: DECISION

Loan is dispersed if approved or

client is given advice to improve.

STEP 5: RELATIONSHIP

Repayment begins and clients

receives ongoing business and

financial education.

Odilon, owner of C&M Bakery in Miami, FL

Accion Loan Process

Products and Programs

Product Definition

Established Businesses

up to $50k

Transition Loans up to $30K with outside cosigner

Sprout Loan

Home-based/incubator up to

$10K

Secured Loans $500 and up

Special Programs

Women, Food/Beverage, Kiva

Basic Requirements

Credit Score over 575 (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

No more than 4 mortgaged properties

*Except Sprout loan, cannot exceed $500

*Promesa Loan Program open to all applicants with a

minimum of a 525 credit score or with no credit score –

other requirements are not obligatory – Max loan amount

of 2.5k.

Cecilia, Sisi’s Mobile Grooming

Miami, FL

Required Documents

Under 10k: (if applicable)

• 2 Forms of personal identification

• Most recent utility bill from home

• Past 3 months of personal & business

bank statements

• Mortgage note

• Market study/business plan and 12

months

financial projections (start up or sprout)

• Internal financial statements

Over 10k (all above, plus:)

• Tax returns (previous 2 years if available)

“The biggest reward for me is seeing the enthusiasm from the benefits

of my business by my clients and employees” . Jessie, Green City Growers

Boston, MA

• Loan process: 2 to 3 Weeks

• Terms up to 60 months • ACH Monthly Payments

• Interest rates: start at 8.99%

and have a ceiling of 15.99%

• No prepayment penalties

• Payments applied to principle and interest

Affordable Loans

*Once documents are collected

“I’ve attended three Tory Burch Foundation mentoring events and am genuinely humbled by the experience,

it’s validation as a small-scale entrepreneur and as a woman to be able to interact

with distinguished CEOs and leaders in the fashion industry.” Sandra, Sandra Baquero Designs

New York, NY

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

our clients

Partnerships: teaming up with

organizations leverages

resources and maximize

strengths

“With Accion, it was more than just a loan. Through

promotional opportunities, Accion helped to get my business name out there.”

Kari, Morris Kitchen

Brooklyn, NY

Samuel Adams Brewing the American Dream

Business Education

Access to Mentors and

Networks

Seasonal Product

Integration / Catering

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 up sales. Sandy’s $2,000 loan from Accion, helped her purchase equipment to speed up production and boost sales. Sandy, Lulu’s Sweet Shoppe

Boston, MA

Samuel Adams Brewing the American Dream: www.samueladams.com/btad

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, owner of Natasha Wozniak

Jewelry. Brooklyn, NY

Kiva.org

Loans up to

$10,000

Increased

lending flexibility

Publicity

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. 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 need to get his business back in shape. Luis, New York, NY