accion usa

2013 AnnuAl report · 1

ACCION USA 2013 Annual Report

2 · Accion usA


“Fundamentally what microfi-nance does is it addresses some human needs. Human needs such as participation in society or inclusion. The need for creative self expression. The need for identity or self esteem. And the need for economic self-reliance.”

-Paul Quinteroceo Accion East

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TABLE OF CONTENTS

MISSION ABOUT ACCION

OUR IMPACT

07 08 12


EDUCATION ACCION BORROWERS

FINANCIALSUMMARY

OUR STAFF

14 16 22 24

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The mission of Accion usA is to make credit a permanent re-source to low- and moderate- income small businesses owners in the United States. By providing small or “micro” loans to men and women who have been shut out of traditional banking, Accion usA helps build their businesses and increase their incomes. Accion usA sees business credit as a resource that can help narrow the income gap and provide economic opportunity, there-by stabilizing and strengthening communities and economies. At the heart of this vision is the recognition that microlending institu-tions must be financially sustainable, not perennially dependent on donations or government aid. This is the reason, Accion usA’s microlending programs seek to become financially self-sufficient. Accion usA’s lending methodology is character-based. Unlike traditional lenders, we don’t make loans based on credit history or collateral alone. Instead, we focus on our potential borrower’s initiative and desire to succeed, knowledge of his or her business and market, as well as on references from customers and neighbors. Our loans range from $500 to $50,000 with terms of three to 36 months. We offer loans designed to match the credit needs of each business, the borrower’s character and the business and family income and expenses. In cities across the United States, Accion usA serves women and men who operate everything from part-time, home-based businesses to storefront locations with several employees. Our borrowers are small manufacturers, day- care providers, taxi drivers, restaurant owners, contractors and artisans. They are single mothers on public assistance and store-front owners with small, but well-established businesses. They are immigrants and people whose families have lived here for countless generations.

MISSION

Janet Thompson, Board Chair

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How it worksThe Accion usA Loan Fund is a vehicle for socially re-sponsible investors—both individual and institution-al— to strengthen small businesses and the commu-nities where they operate. An investment in our loan fund will increase the availability of business credit to hardworking women and men who otherwise have few borrowing options. Here’s how it works.

tHe Fund uses loans From investors to: · Lend directly to microentrepreneurs via Accion usA’s lending offices all over the country.

· Make direct loans to Accion usA’s Associate programs to provide funds for their lending activities.

· Provide guarantees to local banks to secure loan capital for Accion usA’s Associate programs. At present, the Fund is seeking long-term, low- inter- est loans (minimum $2,000) to capitalize a pro- jected $15 million loan pool.

Investing in an Accion usA loan is not only a smart investment, it is a socially responsible investment. The investment won't just affect the person who gets the loan, it will affect their family, the people who work in the business and the community the business is in. Accion usA believes that true social change starts one loan at a time, one person at a time, and one community at a time.

wHy investAccion usA has made over 43,000 loans totaling $332 million since our inception in 1994. Our loans and services are individualized with average loan sizes currently at $10,049. We are further pleased to announce that we have a 90% loan repayment rate, demonstrating the commitment clients have towards bettering their businesses and creating last- ing econ-omic stability. There are lots of ways to invest your money, so why invest with us?

Scope As the only loan fund with a national scope, the Accion usA Loan Fund enables socially respon-sible investors to help provide desperately needed business credit to people who have low- and moder-ate-income levels.

impact Since 1991, Accion usA has lent more than $91 million to over 10,400 u.s. business owners with an average loan size of $5,200. Historically, 86% of our borrowers are minorities, 55 percent are quali-fied as low-income and 45% are female. As a result of our loans, microentrepreneurs who have taken just two consecutive loans show an average of 38% increase in monthly take-home income.

Security We put time and care into the administra-tion of the Fund, and it shows. Since its inception in 1994, no investor has ever lost money in the Accion usA Loan Fund.

ABOUT ACCION


$2.2 million more in loans

in 2013 over 2012

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98business survival rate for borrowers with established businesses

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20042005

2006

$5 million

20072008

20092010

20112013

2012

$10 million

$15 million

$20 million

Active yeAr end portfolio

* In 2011, Accion usA merged with Accion New York and the numbers

from 2008 onwards reflect that of the combined entity


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The Small Business Jobs Act that was signed last year suggests that the United States is moving in the direction of microfinance to improve the economy. This Act increases the amount of loans available to small businesses and entrepreneurs. Will this help communities in the United States?

it Helps tHe growtH oF small businesses Many budding entrepreneurs are unable to get a loan from the bank to start their business. Microfinance institutions are able to provide these smaller loans to medium to low income entrepreneurs. The impact of their small business then has a ripple effect on the local community and its economy.

small businesses bring a range oF improve-ments to tHe wHole community. When a small business opens in an area, that busi-ness owner creates ties to the area and the people in it. The health of his business becomes dependent on the health of the community surrounding it.

tHey create jobs and inspire quality. Small businesses on average create between 3–5 jobs each year. These jobs also tend to hire members of the community in which they open. Not only does this create jobs in the community in which it opened where new workers can become trained in various skills, but it also improves all the ties between mem-bers of the community. Small businesses have a lot of competition from large corporations here in the Unit-

ed States. One thing that small businesses can offer over several large corporations is a commitment to quality and customer service. Small businesses need to rely on their customer’s opinion of them, rather than promise of cheap prices. Therefore maintaining a high quality products or services is more important to a small business than it is for larger businesses. Because of its ability to assist in increasing the development of small businesses, microfinance in the United States is extremely important, especially on the road to our economic recovery. That is why it's important that we continue in our efforts to expand nationwide. A recent study commissioned by Accion usA revealed that there are 13.1 microentrepreneurs (defined as a business owner with five or fewer em-ployees) in the usA. Currently, 82% of these micro-entrepreneurs have never accessed bank credit for their businesses. In response to this study, Accion usA has begun working on centralizing loan process-ing, exploring internet-based lending, call centers and opening new lending offices. As we expand our online presence, we are able to reach out to more small business owners in need and also offer financial education services to those who might not otherwise have had resources.

OUR IMPACT


key

State with an Accion USA loan office presence

State you can apply for an Accion USA loan

1. cHicago, il Initially an associate of Accion USA international, this branch became part of Accion USA shortly after the inception of the organization in 1994.

2. boston, ma In addition to Accion USA’s normal loan services, Boston has a unique program with the Boston Beer Company called Samuel Adams Brewing the American Dream. Educational seminars, financial assistance and networking programs are geared specifically to wards food and beverage entrepreneurs.

3. new york city, ny In 1991 Accion USA began lending its first loans in Brooklyn. Since then, loan offices have expanded tremendously throughout the United States.

4. atlanta, ga Georgia ranks first in the United States in entrepreneurship with 580 entrepreneurs per 100,000 residents. Atlanta boasts even greater numbers, with 740 entrepreneurs per 100,00 residents!

5. miami, Fl Our office in Miami offers a unique one- on-one course for small business owners in which they can learn about their spe- cific credit score and strategies they can use to improve it.

6. san antonio, tx Accion USA’S Texas office was started in 1994 and was so successful that it has since grown to employ 100 people in seven additional states: Alabama, Arkan- sas, Kentucky, Louisiana, Mississippi, Missouri, and Tennessee.

7. albuquerque, nm This branch is a strong partnership between Arizona, New Mexico and Colo- rado. An area of the United States celebrated for its cultural, racial and social diversity, Accion USA works hard to give entrepreneurs here the tools needed to maintain that atmosphere.

8. san diego, ca Accion USA’S San Diego office works extensively within the Southern Califor- nia neighborhoods, creating strong community networks that aid in the success of local microentrepreneurs.


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24% higher wages paid to employees of borrowers than the national minimum wage of $9 an hour


Accion usA has educational programs and resources available all over the United States. From online tools to seminars taught by our experienced entrepreneurs, Accion usA works to aid in the success of its many borrowers. This very experience was recorded by one of our employees Sean Peterson: Yesterday afternoon, the streets of Boston were damp and a bit dreary. But indoors, things were bright: teachers dispensed knowledge, students absorbed every word, and both listened and learned from each others’ experiences. But this scene’s setting wasn’t the halls of Harvard or Mit. Rather, it was the second-floor ballroom of the Park Plaza Hotel, where Accion usA and The Boston Beer Company presented their inaugural Brewing the American Dream u: a free, half-day event for entrepreneurs in the food, beverage, and hospitality industries to receive expertise from leading local business owners. Over 150 entrepreneurs attended. For four hours, they listened as fifteen experts shared advice and fielded questions on topics including “What I Learned on My Way to the Kitchen” and “Getting Your Product Ready for Retail.” The advice was timely, inspirational, and most importantly, honest. Jim Koch, founder of The Boston Beer Company, discussed the salesman’s mentality (every time he walked into a bar, he had only seconds to determine why the people sitting at the counter should drink his beer and why the person behind the counter should sell it). Stacy Madison,

founder of Stacy’s Pita Chips, explained the impor-tance of targeted marketing strategies (it’s like a fire hose: you have to focus your efforts, not just spray aimlessly). And John Pepper, the founder of Boloco, emphasized the necessity of resilience (he pitched his business to 39 investors before he heard the word

“yes”). The impact of the program is clear in attendee Ali Rice's feedback we recieved. “I just wanted to let you know how great yesterday was. I was amazed at how eager and enthusiastic all the panel members, Sam Adams, and Accion usA were to lend a hand to micro entrepreneurs. It was truly inspiring as well as empowering. As a food indus- try member, I have many friends and colleagues with dreams of starting their own venture and I’m certain they are not aware of these incredible resources that are available to them through this program.” The event was an important step in strengthening the Boston Beer Company - Accion usA partnership — appropriately named Brewing the American Dream — which launched in 2008. In the past five years, the program has provided loans to small business owners in Massachusetts and, in doing so, saved or created 705 jobs. The partnership not only involves loans but, more so, financial education and “speed coaching” events designed to empower entrepreneurs with the knowledge they need to build their businesses. These programs support entrepreneurs and prepare them for the many challenges of business ownership.

EDUCATION

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ACCIONBORROWERSAlthough Accion usA provides credit without discrimi-nation to everyone who meets our lending criteria, we specialize in working with those who often lack access to credit— women, immigrant, and minority business owners.

27% African American


51% Low Income

45% Female

61% Hispanic or Latino

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1. KARI

In El Salvador, Carlos Trigueros was a mechanical engineer but was forced to leave his country due to violence. In 1993, Carlos started his very own business in Somerville, Trigueros Auto Repair. Today, 15 years later and it is still a thriving business with much to offer not just its many customers, but also his community. He was approved for a $7,000 small business loan which helped him invest in a year of radio commercials. Currently, Trigueros Auto Repair boasts over 200 loyal clients. “The advertis-ing has enabled me to get a many customers from different areas.”

2. CARLOS

nyc foodie Kari Morris started Morris Kitchen, a Brooklyn-based ginger syrup manufacturer, over 2 years ago. With growing demand for Morris Kitchen ginger syrup, Kari needed to prepare for a busy holiday season. Kari contacted a bank for a loan but had a difficult time securing financing. Like many college grads, a short credit history and student loan debt made it difficult for Kari to find funding to start her business. Accion usA Loan Consultant Liz Bueno looked beyond Kari's credit score and approved her with a loan that was administered within a week.

Accion usA's clients are leaders in their community and their fields. With each Accion usA loan given, 3.5 jobs are created, and that figure does not include the person taking out the loan. Profits increase by 47% and business equity increases by 42%. Beyond the finan-cial benefits, our clients re-port being happier in their lives and more involved in their local community.

WHO WE ARE


4. CLAUDIO 5. AMY3. BELINDA

Fascinated by the great variety of produce that is grown in the us, Claudio made a decision 7 years ago to rent land and start his farm of his own. Claudio looked for loan capital to help cover the cost of his next batch of seedlings for the spring, but short credit history really made it challenging for him to secure funding for his business. Claudio attended a financing work-shop and met Erica Dorn, who saw potential in Claudio's business. He was approved a $2,000 microloan for seedlings, helping Claudio to stabilize his business during tough winter months.

Increasingly, couples, families, and corporate clients are choosing top Miami Accion usA client Elite Catering and Event Planning to make their important events even more special. Founders Rosendo Ramon and Belinda Martinez com-bine fourteen years of experience with a commitment to handling all the details— from the menu to the types of music. “The loan from Accion went to expand inventory of plates, linens, glasses, and flat- ware,” Rosendo said. “Now we can definitely handle larger events and serve like a one-stop shop.”

In 2008 Amy decided to turn her little hobby of making handbags into an enterprise. Fast forward to 2011: Amy + Owen Handbags is an incorporated business with a product line sold in over 35 fashion boutiques around the New York City area. It was not until Amy's best childhood friend passed away from breast cancer that she finally decided to just turn her hobby of making bags into an enterprise. With Accion usA's support, Amy was able to expand her business, allowing for a buffer for a trade-show in Atlanta where she was able to tap into a new market.

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“We believe in a financially inclusive world— one in which every individual has access to a full range of high quality, affordable financial services. With access and the right financial tools, people have a greater oppor-tunity to capitalize on their abilities and achieve real economic gains, building brighter futures for them-selves and their families.”

-Michael Schleinceo Accion International

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Balance Sheet 2013 2012

Assets

Cash and cash equivalents 5,137,534 5,231,485

Cash restricted for loan funds 1,577,229 1,404,655

Contributions and grants receivable, net 3,322,827 4,148,040

Interest on loans receivable, net 33,503 48,510

Microenterprise loans receivable, net 5,629,370 6,194,788

Investments 931,145 907,955

Other assets 390,343 398,148

Property and equipment, net 315,306 477,026

Total Assets $ 17,317,257 $ 18,810,616

Liabilities

Accounts payable and accrued expenses 293272 417,188

Notes and recoverable grants payable 9,609,843 10,589,991

Other liabilities 420,966 443,050

Subordinated debt 3,050,000 3,050,000

Total Liabilities $ 13,374,081 $ 14,500,229

Net Assets

Unrestricted 1,374,742 1,398,492

Temporarily restricted 5,317,918 5,708,879

Total Net Assets 3,943,176 4,310,387

Total Liabilities and Net Assets $ 17,317,257 $ 18,810,616

Financial Summary Statements of financial position as of December 31, 2012 and 2013

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Revenue and Expense Statement 2013 2012

Support and Revenue

Contributions and grants 4,964,168 6,432,820

Interest on loans 717,121 926,602

Program fees 264,637 379,043

Investment income 40,224 22,250

Other revenue 207,889 201,140

Total Revenue 1,229,871 1,529,035

Total Support and Revenue $ 6,194,039 $ 7,961,855

Expenses

Program Services

Lending/development service 4,667,802 5,477,616

Network 662,560 0

Total program services 5,330,362 5,477,616

Supporting Services

Management and general 783,891 891,771

Fundraising 446,997 491,551

Total Expenses $ 6,561,250 $ 6,860,938

Change in Net Assets 367,211 1,100,917

Net Assets- Beginning of Year 4,310,387 3,209,470

Net Assets- End of Year $ 3,943,176 $ 4,910,387


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OUR STAFF

PAUL QUINTERO ceo NEIL BOSS Director of Risk & Operations

LIBARDO CLAVIJO Controller ELENOR DENKER vp, Resource

Planning & Administration ANA HAMMOCK Director of Lending

ASHLEY WESSIER Director of Development MARIA ALVAREZ As-

set Recovery Associate/Credit Coaching LILLIAM ARIAS Quality

Control Associate/Customer Service ALEJANDRA BOGGIANO

Communications Manager ELIZABETH BUENO Senior Loan Con-

sultant SANDRA CELY Accounting Associate RODRIGO CER-

VEIRA Senior Loan Consultant, New England Team Leader ERICA

DORN Business Development Officer CARMEN DUPERON Senior

Manager, Client Services FABIANA ESTRADA Loan Consultant,

Florida Team Leader MARCO FIALLOS Bilingual Analyst KEN

FORD Database Administrator/ Programmer YLEANA GARRIDO

Team Leader, Asset Recovery/Credit Coaching DIANA GOLOPEN-

TA Loan Consultant RACHEL GREENWALD Loan Consultant VAL-

ERIE GURZENDA Loan Operations Associate ROB KOSTAS Se-

nior Underwriter JANET THOMPSON Chair of the Board DOUGLAS

URQUHART Secretary of the Board PIERS CARDEW Treasurer of the

Board JOSEPH DIFILIPPI SVP/Chief Information Officer WILLIAM

FENTON svp Market Manager, Community Development KIMBERLY

JOHNSON Partner HENRY LANIER Consultant & Chief Executive

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accion usa

Documents

mission of accion usa

annual report2 accion

worksthe accion usa

accion usas associate

accion usas lending

board chair8 accion

direct loans

micro loans