Accion is a nonprofit micro-financing company that provides business loans and other services for small business owners who might otherwise have trouble getting traditional business loans. Accion International operates in 32 different countries located in North and South America, Africa, and Asia. It began in 1961 as a community development organization, building roads, schools, and community centers with volunteer labor in Venezuela and Brazil. Consumers that choose Accion should remember that they must have a credit score of 550 or higher.
As this list makes clear, Accion is particularly interested in helping minority and disenfranchised communities through economic development. Although they don't give loans to businesses with damaged credit, they do help if credit is not well-established. They do this by relying on other strengths or sources of financing in order to make the loan possible. There is a minimum credit score requirement, which for their standard loan types is 575, but this is lower than many traditional business loans.
Also, if a business doesn't qualify for a loan, they provide expert advice to help that business improve their financial situation, so that they are more likely to qualify the next time around. The business can then reapply for a loan in three to six months. Consequently, it can be helpful for a business to go through the application process even if they don't get the loan because they learn valuable information that can help them grow and prosper.
The Accion website provides dozens of testimonials from actual small business owners who have benefited from their loan services. This adds a personal touch to the loan process, and it also gives some specific information about how Accion loans have helped small businesses. Putting a name and face to the people who have used Accion loan services might be encouraging to some who otherwise see the process as cold and clinical. Accion's small business loan services are available in all 50 states, as well as 32 countries across four continents. The online application process is very simple. Applicants fill out a few boxes, select their state on a map, and then submit their information. In two days, they will get a response letting them know if they qualify. There is also an option to receive email updates about the status of the loan application.
The loan amounts offered by Accion are fairly low compared to many other types of traditional business loans. The standard loan ranges from $500 to $50,000, and some loan types are even lower. For example, they have a start-up business loan that ranges from $1000 to $10,000. Consequently, Accion is simply not going to meet larger needs.
To that end, their minimum credit score requirements could be lower. Most of Accion's loan types require a minimum credit score of 575 or higher. Consequently, Accion is not an option for businesses that might have struggled in the past and damaged their credit. They also take into consideration all past due debt and any bankruptcies. In fact, their minimum requirements are fairly extensive, which is simply going to make their services inaccessible to many businesses that are struggling to survive in economically depressed areas.
For example, a business cannot be more than 30 days late on any bill, loan, credit card or any other type of payment, and total late payments must be less than $30,000. The business can't have had any foreclosures in the past 24 months, any bankruptcies in the past 12 months, and no late mortgage or rent payments in the past 12 months. Also, the business can't have any mortgage rate adjustments due during the duration of the loan. Start-up loans require an outside income source other than the business. There is a little more flexibility for loans that are under $2,500, though the exact nature of this flexibility is not clear. While all of these minimum requirements are understandable, they are going to make Accion's loan services inaccessible to many businesses in the areas where they are focused. Business owners operating in low income neighborhoods are likely to have struggles due to a lack of outside financial help. Unfortunately, Accion might be added to the list of services that they cannot get.
Ultimately, Accion provides an alternative to traditional business loans, so it might fill in the gaps for smaller businesses seeking outside financial help to expand, purchase new equipment, or market their goods and services. Loan amounts are lower than what many traditional loan companies offer, so Accion is only suitable for smaller needs. Also, minimum requirements are still pretty extensive, despite the fact that Accion seeks to provide an alternative to struggling businesses. Interest rates are not impressive. In the end, for those small businesses that qualify, Accion provides a reasonable alternative to traditional business loans that might help small businesses with limited resources.
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