- ACCION USA Offers Small Business Advice - Photo by AComment on Flickr
Hester's Cafe and Coffee Bar is a popular restaurant in Corpus Christi, Texas, that thrives today due to a low-interest loan from the microfinance organization Accion Texas-Louisiana.
After Hester and Jason Rodriguez had their loan applications denied by traditional bankers, Accion Texas-Louisiana granted a loan of $25,000 and one-on-one business advice. This was enough to get the Cafe up and running. A second microloan and four years later Hester's Cafe expanded and employs 22 people. Accion Texas-Louisiana is part of the U.S. ACCION Network.
ACCION USA Provides Funding for Small Businesses
ACCION USA is different from a bank or credit union. It is a nonprofit microfinance organization offering small business microloans to enterprising individuals who cannot borrow from a bank because"
- the loan they need is very small;
- they have poor or insufficient credit history;
- they have been in business for less than two years; or
- they have no collateral.
ACCION USA loans are much smaller than bank loans ranging between $500 and $50,000 with a current loan average of $5,100. The loans are generally made to small business owners with fewer than 5 employees.
ACCION USA offers an online application for a small business loan. Clients can visit a local office for small business advice. ACCION USA belongs to the U.S. ACCION Network, the largest domestic microlending network in the United States.
Opportunity Fund, California's Largest Microfinance Organization
While California lawmakers struggled to pass a budget in the fall of 2010, preschools supported by the state couldn't pay their rent nor their teachers. Creative Montessori Learning Center in East Palo Alto, turned to Opportunity Fund, a microfinance organization serving the San Francisco Bay Area. The preschool received a loan to pay its lease for two months. Opportunity Fund's average loan is $8,000 at an 8 percent interest rate.
- "Banks really don't make loans this small and a lot of these providers probably wouldn't qualify for a bank loan because of credit history, because of time in business. We are able to look beyond cookie cutter things and look at people's stories," says Eric Weaver from Opportunity Fund.
Opportunity Fund Partners with Kiva
In July 2009 Opportunity Fund partnered with Kiva, who became known for its unique person-to-person lending platform sponsoring entrepreneurs in the developing world. The partnership allows individuals from around the world to lend directly to small businesses in California.
During Opportunity Fund's first year as Kiva's California Field Partner 12,229 Kiva investors lent $401,575 to 67 'Opportunity Funded' businesses in the Bay Area, says Eric Weaver. The average Opportunity Fund loan posted to Kiva is about $6,000 and takes less than 5 days to fund.
A case study of Opportunity Fund's microfinance program shows how each dollar invested in a small business — a family daycare, a neighborhood taqueria or a plumbing business — multiplies as it touches the local economy. For every $1 lent to a small business, an additional $2 are generated in economic activity from new wages, to new taxes to new spending.
Find out more about ACCION USA
Find out more about how Opportunity Fund helps microentrepreneurs
Sources:
- Bluestein, Adam and Barrett, Amy, Why Microfinancing Works, Inc., July 1, 2010. Web.
- Melendez, Lyanne, Preschool Struggles Due to State Budget Stalemate, ABC 7,KGO TV San Francisco, CA, September 8, 2010. Web.
- Ripple Effect: The Economic Impact of Microlending, 2010, Web.
