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Lending. Supporting. Inspiring.
ACCION USA
“Block walking”
Forging and fortifying relationships in the communities
that we serve.
2www.accionusa.org
Why block walking?
• ACCION USA believes that it is important create strong relationships within the communities that we serve.
• The block walking teams meet and greet business owners to spread awareness about ACCION USA's services while learning about local businesses and their needs.
3www.accionusa.org
Why the lack of Access?
Some Common Reasons:•Lack of credit or low credit score
•Lack of financial documentation or records
•Business is informal—no commercial track record
•Loan amount needed is too small
•Some industries are considered to be high risk
•Language Barriers
“We are attempting to fill in the gap that exists in financial services and helping individuals establish commercial credit.”
4www.accionusa.org
LOAN PRODUCTS
Business Loans:
• Established business loans up to $50,000.
• Start-up business loans: up to $30,000. *with minimum of 6 months in operations
Non-Business Loans:
• Credit start loans: $500-$700 (must have a provable income and no credit history).
• Personal development loans: $1,000-$10,000.
• Secured loans: $500 and up.
5www.accionusa.org
Interest Rates
Application Fee $30 If Loan is Approved
Closing costs Fees 3-6% of the loan amount
Pre-penalty Fee None
FEES Financed into loan
First-time Business Loans Fixed APR 8.99% - 15.99 %
Renewal Loans with perfect repayment on previous AUSA loans
Rate decreases with each additional loan.
In some cases, clients who are able to provide a cosigner will receive a discount of 2% on their APR when is 12-15.99%
6www.accionusa.org
AUSA Loan Application Process
Client learn about ACCIONUSA
Client fills out the application and send it to AUSA or provide the information over the phone
to the loan consultant
AUSA could offer the client range and Interest rate after
loan consultant have allInformation from the application
Prequal
Client submits complete documentation and gets
Interviewed by Loan Consultant
Loan Consultant analyze the loan and submit
for Underwriting
UnderwriterApproves or Declines
Loan Consultant inform the client the decision and
Schedule the disbursement
Once all documents are submitted to Underwriter it takes about 5-10 business days for an answer
7www.accionusa.org
Decision Factors: Character, Cash Flow, Collateral1.) Character (References)Residential and commercial landlords, supplier, client and/or personal references.
2.) Cash Flow- An examination of sales vrs. expenses to demonstrate capacity to repay.- Business and personal bank statement review.- Start-ups must present 12 months of financial projections.
3.) Collateral or CosignerBusiness collateral such as titled vehicles may be accepted to strengthen app.
Co-borrower/Cosigner - 21 years old or older - Strong credit history - Verifiable source of income separate from business
- Employed for at least 6 months
8www.accionusa.org
Decision Factors: Credit
4.) Credit History
• Credit Score 575 and above
• Relatively low balances
• Healthy % of available credit
• Open accounts that are current
• Zero FICO score is acceptable for credit start loans
Automatic disqualifiers: • Current lateness on mortgage, auto, rent or child support payments• More than 3 late mortgage payments within the last 2 years• Negative amortization mortgages that adjust within the loan term • More than $3K in unpaid judgments, collections, liens, charge-offs• More than 3 properties (mortgage loans)• Property foreclosure within the last 2 years • Bankruptcy within the last 12 months
9www.accionusa.org
Decision Factors: Industry and Purposes
5.) Ineligible industries: Non-profit, adult entertainment, gambling businesses; Pyramid or Multilevel businesses and other lenders.
Real estate related industries are also excluded such as: - Mortgage brokers- Title agencies- Apartment management companies- Market investment companies
6.) Loan Purposes:• Detailed list of expenditures• Contributes to the positive growth of business.• Loan uses that will clearly improve the revenues and/or profits of the business
Ineligible purposes include: Down payments on any real estate/closing costs on property or
student loans
10www.accionusa.org
ACCION USA Portfolio Profile
AUSA MICROLOANSMost Common Business Sectors
(By $ Value)
11www.accionusa.org
Client Impact
Creates employment in low- to moderate-income communitiesOn average, ACCION USA loans create 2 new jobs. Since inception, AUSA loans have created approximately 11,500 new jobs.
12www.accionusa.org
Soft Ways to approach a Business Owner
• Lead the conversation to the point where the client is talking about what he needs to improve his business, and see if ACCION’s products can help
• Mention some of our products such as the green loan product. “Have you thought about upgrading to energy efficient equipment, or making your business more eco-friendly? ACCION USA offers a green loan product with a lowered interest rate”
• Probe, Ask and Listen to their needs
• Show that you offer solutions they match their needs
13www.accionusa.org
More Sample Questions
• How is your business doing? How are sales?
• Are you looking to expand your business, either through renovation or increased services?
• Are you thinking of renovating your restaurant/shop?
• Would you like to purchase a new refrigerator or other new appliances?
• Have you tried to apply for small loans with the bank?
• Do you know about any of ACCION USA’s upcoming events?
14www.accionusa.org
Walk on…
Thank you for your participation in a block walking event to spread awareness about ACCION USA’s products and services!