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Fund small improvements to your business with this nonprofit global microlender.
Microloans can be a business’s best friend in those crucial first years of getting off the ground. These small loans can help you buy those crucial pieces of equipment or inventory required to grow. They can also help build your business’s credit score — which can lead to better terms on larger loans down the road.
We take a look at Accion, a nonprofit global microlender that could give your small or new business the tiny boost it needs.
Credit score of 575+, no late rent or mortgage payments in the past 12 months, no bankruptcies in the past year, no foreclosures in the past two years, no adjustments on mortgage rates, no overdue bills or payments, less than $500 in overdue debt payments if your business in less than 6 months old, business plan or financial projections for the next year, located in a home office or an incubator.
A credit score of 575+
No late rent or mortgage payments in the past 12 months
No bankruptcies in the past year
No foreclosures in the past two years
No adjustments to your mortgage rates
No overdue bills or payments
If your business is less than six months old you must have less than $500 in overdue debt payments
Must have a business plan or financial projections for the next year
Anna Serio is a staff writer untangling everything you need to know about personal loans, including student, car and business loans. She spent five years living in Beirut, where she was a news editor for The Daily Star and hung out with a lot of cats. She loves to eat, travel and save money.
Do I qualify for Accion?
Accion’s eligibility standards depend largely on where your business is located.
However, loans typically require you to meet standard requirements:
Your credit score is 575 or higher.
You have no late rent or mortgage payments in the past 12 months.
You have no bankruptcies in the past 12 months.
You have no foreclosures in the past two years.
You haven’t adjusted your mortgage rates.
You have no overdue bills or payments on balances of $3,000 or more.
If your business is less than six months old, you have three additional requirements to meet:
Your business must be located in a home or an incubator.
You carry less than $500 in overdue debt payments.
You have a business plan with financial projections for the next year.
You cannot borrow from Accion in the US if your business is involved in a few select industries that include:
Weight-loss products that aren’t FDA-approved
Precious metal sale
Gambling, lotteries or raffles
Lending institutions, nonprofits, development companies and collection agencies also won’t qualify for an Accion business loan.
Qualifying small businesses worldwide can get a small loan to help their business grow through Accion’s microloan offerings that include:
Daycare business loans. Use this loan to cover your daycare’s working capital, vehicle purchases, marketing or other expenses. Funding starts at $500, reaching $10,000 to $25,000 for businesses that have been around for longer than six months.
Food and beverage small businesses. Businesses in the food, beverage or hospitality industry can apply for a loans of $500 to $50,000 to cover day-to-day expenses, buying equipment and more.
Business loans. Small businesses with more than six months of sales qualify for standard business term loans that range from $500 to $50,000.
SBA community advantage loans. If your business is located in Florida, Georgia, New Jersey, New Hampshire, New York, Massachusetts, Rhode Island or Connecticut, you might qualify for a government-backed loan of $50,000 to $250,000. SBA loans are known for their extensive eligibility criteria, so confirm with Accion that you’re eligible before you apply.
Local business loans. Depending on your business’s ZIP code, you may qualify for a low-interest business loan of up to $50,000.
Compare more business loans
Updated September 17th, 2019
What makes Accion business loans unique?
Accion is a global lender that offers small loans with lower-than-average APRs. Rather than focused on profits, Accion’s goal is to encourage the growth of small businesses in underserved areas or communities worldwide.
Minority-, Native American–, women- and veteran-owned business could particularly benefit from Accion in the US, as might startups and businesses that work toward a greater good.
What are the benefits of getting a business loan with Accion?
Competitive rates — especially for a microloan. Microloan APRs sometimes hit in the ballpark of 500%. Accion’s rates that top out at 22% are far more attractive.
Low credit scores OK. Accion’s minimum required credit score is 575 — though a stronger score certainly helps you get a stronger rate.
No prepayment penalty. This means you can save on unnecessary interest by paying off your loan early.
Resources for small businesses. Accion provides educational and training services to its clients one-on-one or through workshops.
What to watch out for
Nonprofits can be more flexible than traditional lending institutions — but also more mismanaged. Accion is no exception to the rule.
Here are potential drawbacks to borrowing from Accion:
High fees. You’ll pay a $135 processing fee and 3% to 5% of your loan amount in closing costs with Accion.
Limited loan amounts. Microloans are … well, small. Accion is not the best place to finance a huge project like buying new real estate or acquiring a new business.
Slow application. Borrowers complain that it can take ages for approval and funding.
Poor customer service. Customers complain that they aren’t able to speak to the same rep more than once, making it frustrating to get clear answers.
Personal guarantee required. You’re personally on the hook if your business isn’t able to repay the loan.
Is Accion safe?
Accion is not listed on Trustpilot or the Better Business Bureau — not necessarily a good sign. Customer reviews are generally mixed. Some sing Accion’s praises for its affordability. Others complain that background checks they sometimes run on applicants are a privacy violation.
Am I eligible?
To be eligible you must have:
A credit score of 575 or higher. You don’t need excellent — or even fair — credit to get a loan with Accion.
No late rent or mortgage payments in the past 12 months. Payments include both your residence and business’s commercial space.
No bankruptcies in the past year. You or your business cannot have filed for bankruptcy over the past 12 months.
No foreclosures in the past two years. You also cannot have any property foreclosed over the past 24 months.
No adjustments to your mortgage rates. If you have a mortgage, your rate cannot have changed throughout its entire term.
No overdue bills or payments. Payments apply to anything with a balance of $3,000 or more.
If your business is less than six months old, it must:
Run out of a home or an incubator. To qualify, you must work out of a home office or a company that guides startups through their first few months.
Have less than $500 in overdue debt payments. Clear up all of your debts before applying for this loan.
Have a business plan or financial projections for the next year. Because you can’t show numbers for more than six months, you’re going to have to prove you’re viable.
Have a cosigner. Startups must find someone outside of the business willing to put their personal finances on the line by becoming a cosigner.
How do I apply?
Go to Accion’s website and click Loans in the US.
Fill out your loan amount and your business’s ZIP code, and click Get Started.
Complete your personal information, answer questions about eligibility requirements and click Next.
Complete information about your business, carefully read the terms and agreements and click Submit Application.
Accion will get in touch with you within two business days of submitting your preliminary application.
If you’re accepted, a lending team member will contact you to strengthen the application you’ve already submitted.
Accion typically disburses your funding shortly after your loan is approved.
What documents do I need to apply?
Documentation varies depending on your business and the type of loan you’re applying for. However, Accion will likely ask to see:
Your government-issued ID. Your ID must include your current residence.
Your last three bank statements. You need to provide statements from both your personal and business accounts.
Your business’s tax returns from the past two years. This requirement applies to businesses that have been around for at least two years. Submit what you have if your business is six-months- to a year-old, or look at the documentation requirements for startups.
Recent utility bills. You need to provide utility bills from both your home and your business.
Recent mortgage note. This requirement applies to applicants who have a mortgage.
Verification of personal income from outside your business. Proof could include pay stubs, rental income or public assistance.
Documentation verifying the legitimacy of your business. Including your business certificate, licenses, lease and corporate resolution.
Profit-and-loss statements, cash flow statements or balance sheets. These are typically only required for younger businesses.
Documentation showing what you will use your loan for. This could be sales estimates or details about your supplier or anything else that shows what your business would do with the loan.
Startups also need:
Documentation of your past six months of revenue. This could include tax returns, profit-and-loss statements, invoices, bank statements or sales ledgers.
A business plan or a market analysis and 12-month financial projection. Accion uses this info to determine whether you’re able to afford your loan repayments.
Proof of income from outside your business. You only need this if your business is not yet profitable enough to afford paying back a loan.
Two recent pay stubs from your cosigner. Your cosigner must be able to show they can afford to guarantee your loan if your business defaults.
I got a business loan from Accion. Now what?
Time to start making repayments. You can repay your loan over the phone, by paper check or through your bank account. Consider setting up autopay with Accion to avoid late fees.
Accion is a good starting resource for small businesses or startups having trouble finding funds. However, its application comes with relatively strict eligibility requirements, which some customers find frustrating.
Yes. Accion provides all rejected applicants with suggestions for ways to improve their application. You can typically reapply for an Accion loan from three to six months after denial.
Your personal guarantee means that your personal assets — not your business’s — are on the line.
With Accion, not as important as other lenders might consider it. While you can’t apply with a low credit score alone, Accion will consider other financial indicators if you just meet their minimum of 575.
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