ACCION Microloan Program

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ACCION Microloan Program
Kate J. Rogers ACCION Chicago
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What We Do

• Small Business Loans
• Loans between 200 and 25,000, average loan size
  8,800
• Serving start-up and existing business owners who
  are unable to access bank financing
• Technical Assistance
• Financial education
• Access to resources
• Service Area
• 11-county Chicagoland area

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Results

• Mission Outcomes since 1994
• More than 1,700 loans disbursed totaling nearly
  14 million to more than 1000 microentrepreneurs
• 2007 Mission Outcomes
• 1,796 different businesses served with assistance
  and financing
• 344 clients given formalized referrals to banking
  an technical assistance partners for financing,
  counseling, and other services
• 113 loans disbursed to local small businesses
• 327 jobs created or maintained (an average of 2.9
  jobs per business)
• 998,590 dollars disbursed

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What Do Lenders Look For?Six Cs of Credit

• Capacity/ Cash Flow
• Credit
• Capitalization
• Collateral
• Character/ Capability
• Conditions

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What should I do if my loan is rejected?

• Ask the lender these questions
• Why was I rejected? Get the reasons in writing.
• Does this mean Im turned down permanently? Or
  can I resubmit the loan request when I correct
  the problems?
• Should I go to another lending institution?
• Should I seek alternative financing? What are the
  alternatives?
• Do you have any other suggestions?

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Alternative FinancingHow Do These Programs Help?

• These programs help support deficiencies in the
  Six Cs. They often
• Accept non-traditional collateral and/or
  co-signer in lieu of collateral
• Enable extended payments to ease tight cash flow
• Adopt less stringent credit history requirements
• Encourage lending to businesses with limited
  financing history and start-up businesses

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ACCION Chicago
ACCION Chicago is a private not-for-profit direct
lending organization dedicated to providing
credit and other business services to small
business owners who do not have access to
traditional sources of financing. By encouraging
the economic self-reliance of microentrepreneurs
throughout the Chicagoland area, ACCION Chicago
strives to help businesses and communities grow.
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Terms and Products

• Amounts
• Loans for established businesses 500 to 25,000
• Loans for start-up businesses 500 to 15,000
• Credit Builder Loan 200 to 2,500
• Products
• Term Loans
• Balloon Loans for contract/invoice financing

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Terms and Products

• Terms
• Up to 5 years, depending on loan purpose and cash
  flow
• Interest rates
• Fixed rate between 10.62 and 16
• Performance pricing available
• No prepayment penalty
• Fees
• No application fee
• One-time closing fee up to 5 of loan amount plus
  collateral filing fees, financed

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ACCION ChicagoEligibility Checklist

• Operate business in the 11-county Chicagoland
  area?
• Over 21 years of age?
• Business industry must NOT involve real estate
  development, not-for-profit organization,
  exporting, multi-level marketing or lending.
• Loan purpose must NOT include owners salary,
  down payment on real estate, or tax payments.
• Current, with no bills past-due, on all active
  personal and business accounts?
• Free of outstanding tax liens, delinquent child
  support, and active bankruptcy?

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ACCION Chicago Eligibility Checklist (Cont.)

• Willing to pledge collateral (2nd or 3rd
  mortgage, vehicle and/or business assets) and/or
  a qualified co-signer?
• For start-up businesses (less than 6 months
  revenue history)
• Is current/outside income sufficient to cover
  personal bills, new business rent, AND an ACCION
  loan payment?
• Personally invested at least 10-20 of loan
  amount requested?
• Industry experience?
• Ready with business plan (can be informal) and
  12-months cash flow projections?

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ACCION ChicagoLoan Application Process

• takes 15 business days!
• Online Application at www.accionchicago.org
• If pre-approved, gathering of supporting
  documentation
• Collateral inspection/ Site Visit
• Final Underwriting Review
• Presentation to Credit Committee
• Loan Closing

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Thank YouFor Coming!
If you would like more information, please
contact me at Kate J. Rogers [phone] x103
or kjohnson_at_accionchicago.org