biz2credit latino small business credit study
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Helping Small Businesses Grow…
Biz2Credit Latino Small Business
Credit Study with Hector Barreto of The Latino Coalition and
Paul Quintero of ACCION East Tues, Sept. 30, 2014
Our Moderator today...
Anita Campbell is the CEO of Small Business Trends LLC, a media and information company. In that
role she closely follows trends in the small business market and trends in technology. She has been an
entrepreneur at heart her entire life. A lawyer by training, Anita has a wide range of interests, as
reflected in her varied background in banking, information technology, human resources, marketing and
eCommerce.
Anita Campbell
Founder, CEO and Publisher of Small Business Trends
Our Presenters today…
Rohit Arora
CEO and Co-Founder of
Biz2Credit
Hector Barreto
Chairman of The Latino
Coalition and former SBA
Administrator (2001-06)
Paul Quintero
CEO of Microlender
Accion East
Latino-owned businesses
Though they are the fastest growing segment of the
small business community, Latinos often find it
challenging to secure capital
• Funded over $1 Billion to date
• Over 1,200 lenders on our platform, including 50+ micro-lenders
• Has direct reach to over 1.6 million small and medium sized business owners
2012 - Entrepreneur.com Top Small
Business Finance Resource
2011 - Crain’s Top Entrepreneur
Biz2Credit in a few words…
Biz2Credit Quantifies Challenges Faced by Latino Small
Business Owners
• Average annual revenue for Latino-owned businesses was $69,518.56,
while for non-Latino-owned businesses, the figure was $86,501.47.
• The average credit score for Latino-owned businesses was 611.7,
compared to 622.3 for all others.
• Average operating expenses were lower at $20,981.19, contrasted with
$29,455.54 for non-Latino businesses.
Biz2Credit Quantifies Challenges Faced by Latino Small
Business Owners & Entrepreneurs in Securing Financing
Hector Barreto
Chairman
The Latino Coalition
Latino-owned companies
• There are over 3 million Latino-owned U.S. businesses
• Figure is expected to double in five years.
• Generate an estimated $500 billion in sales annually.
• Securing capital is still a challenge
Where are Latino businesses growing?
The short answer is everywhere!
Where are Latino businesses growing?
• The top states for Latino-owned small business loan applications on
Biz2Credit.com in the past two years were: California (20.3%), Florida
(20.2%), Texas (14%), New York (11.7%), and New Jersey (4.2%)
• These five states represented more than 70 percent of the loan requests
made by Latinos in the past two years.
• There are vibrant Latino communities in places such as Chicago, Denver,
and Charlotte.
The Top 5 States for Latino-Owned Small
Business Loan Applications
Challenges for Latino Entrepreneurs
• Because language is sometimes a barrier, the application process can be
intimidating
• Some people don't have a lot of experience borrowing money from banks
• People with poor credit histories -- or none at all -- can be difficult to find a
bank that will give an aspiring entrepreneur a chance (They often must turn
to high interest, non-bank lenders, such as cash advance companies)
Young Latinos Are Entrepreneurial
"The young generation of Latinos -- both immigrants and first or second
generation Americans -- are very entrepreneurial. We must mentor them
better, create role models in the community and help them take their
companies to higher levels. I'd also like to see more Latinos enter the
booming e-commerce and technology sectors in Silicon Valley and
elsewhere.”
Hector Barreto,
Chairman of The Latino Coalition.
Where to Find Funding
• Loan programs designed to help Latinos -- and others – who live in
economic empowerment zones
• Options besides “name brand” big banks include regional banks, credit
unions and microlenders
• Alternative lenders typically approve more than half of the small business
loan requests
The SBA
• SBA.gov provides links to Minority Business Development Centers
(MBDCs) that can connect Latinos with training courses and other
assistance
• The SBA sets has a network of Small Business Development Centers
(Centros de Desarrollo Empresarial) that offer networking opportunities and
advice
• The 8(a) Business Development Program helps socially and economically
disadvantaged individuals through a wide range of assistance programs
• The agency provides assistance in both English and Spanish
Paul Quintero
Executive Director of Accion East, a leading
non-profit microlender
Biggest challenges for Latino small
businesses in search of funding?
• First time entrepreneurs sometimes have poor credit histories -- or no credit
history at all.
• Microlenders like Accion are willing to give people a chance who might not
be able to secure a loan from a traditional bank lender
Can I qualify for a loan if I have bad credit?
• Yes!
• Accion requires a minimum 525 FICO Report score – a number lower than
most “traditional” lenders will accept
What is Role of microlenders?
• Accion East offers affordable microfinance solutions
• Since 1991, Accion has provided over $132 million in over 20,000
microloans
• Funding helps grow small companies, create jobs, and strengthen
communities
What types of loans does Accion make?
• Established Business Loans (loans of up to $50,000)
• Emerging Business Loans (loans of up to $30,000 to help companies
achieve profitability)
• Transition Business Loans (loans of up to $30,000 for the purchase of an
existing business)
• Sprout Loans (small loans to help get startup businesses up and running)
• Promesa Loans (loans for startup entrepreneurs with little-to-no credit
history)
How long does the process take?
• Typically 2-3 weeks, if the applicant has all the necessary documentation
• Applications are done online and completed in just a few minutes
• No need to fill out tedious paper forms!
Biz2Credit - Step-by-step application process for
SMB borrowers
Borrowers create an account and apply for loans
for free
Pre-qualify for multiple loans and compare options
in the Biz2Credit system
Select the best product and finish application
either online, or with the help of a Loan Specialist
1
2
3
Biz2Credit/TLC Registration Page
Biz2Credit Initial Loan Application Form
Instant Pre-qualified Matches
Customers can either finish the application for a specific loan product online, or work with a Loan
Specialist to complete the process
Complete Application Process 1
For many lenders, you can complete the entire application on Biz2Credit, receive a real-time offer, and
get funding within a few days (*some on the same day!)
Complete Application Process 2
Upload all necessary documents, store them for record keeping, and share them with any lender!
Timeframes & Expectations
Timeframes for receiving funds
• Personal Asset Loans: Same Day
• Cash Advances: Days
• ACCION Micro-loans: 1 week
• Traditional Loans Between $5,000 - $150,000: 1-3 weeks
• Traditional Loans > $150,000: 2-4 weeks
*Biggest reason for delays: Document gathering
FAQ’s
Is there a cost to the customers?
• No. Registration is free, takes four minutes and enables borrowers to see
loan product matches
• Typically, customers also do not pay anything to Biz2Credit secure loans
How do we differ from competitors?
• Biz2Credit does not pass along info until the borrower chooses a lender
• Biz2Credit only receives revenue if the customer obtains a loan
• Biz2Credit has a network of over 1,300 lenders and has arranged more than
$1.2 BILLION in loan products for all types of small businesses
Helping Small Businesses Grow…
Q&A
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