Accion

Cost

Although your credit score doesn’t determine whether you’re approved for a loan, it does affect your interest rate. So, the higher your credit score is, the cheaper your loan will be.

The interest rates, which are fixed, can be anywhere from 7% to 34%. Accion makes it easy to ascertain the total cost of the loan by quoting the annual percentage rate (APR). We like that transparency; lenders that quote the interest rate alone aren’t including any fees associated with the loan. 

Applying for a Loan

Applying for a microloan with Accion is a simple process. The application takes minutes to complete, and a decision can come quickly.  

The first step is to either complete an online application or apply in person or over the phone. Accion will ask you about your business and why you need the loan. Once you submit the loan application, a loan specialist will contact you and work with you throughout the loan process. That same loan specialist will help you manage the funding once you have the cash in your bank account. 

Accion specializes in providing loans to these often-underserved markets:

• Women-owned businesses
• Minority-owned businesses
• Food and beverage businesses
• Startup businesses
• Small businesses
• Veteran-owned businesses
• People with disabilities
• Green businesses

Accion doesn’t put approval requirements on your credit score, but you do need to have been in business for at least 12 months. In addition, your business has to generate more than $50,000 in annual sales. 

Accion requires the following documents to underwrite your loan:

Personal Documents

• Two valid forms of identification, with at least one photo ID: driver’s license, passport, signed credit card, Social Security card
• A recent utility bill showing your name and home address (the previous month’s balance needs to be paid in full)
• A copy of your mortgage note, if you have a mortgage
• If applicable, proof of second job income or other additional household income

Business Documents

• A copy of your signed business lease, plus riders, if applicable
• Proof of business ownership (articles of incorporation, EIN registration, Schedule K-1)
• Your business plan
• A monthly breakdown of your financial projections for next 12 months
• Photos of the business space, inside and out

Financial Documents

• Three most recent consecutive business bank statements
• Three most recent consecutive personal bank statements
• Last two years of business and personal taxes, federal only
• Year-to-date profit and loss statement for your business

You won’t get a loan if you have any of the following: 

• More than 30 days late on any bills, loans, credit cards and other payments; if you are late, the balance must be under $3,000
• Mortgage rate adjustments due during the term loan
• Declared bankruptcy in the past 12 months
• A foreclosure in the past 24 months
• A late rent or mortgage payment during the past year
• For startups, more than $3,000 in past-due debt

If you have bad credit or no credit, Accion will work with you to find strengths in your business or finances to approve a loan.  

Did you know? Microloans are a great way to get a business up and running, fill a cash flow need, or pursue growth. With Accion, you don’t need to have been in business for years or have a high credit score.

Loan Terms

Accion loan amounts vary by location. Because Accion works with a network of lenders, the loan terms vary among borrowers. Payments are due monthly. There aren’t any prepayment penalties with an Accion microloan. We like that this lender is willing to work with you to create a repayment plan that works with your unique situation. Not all lenders do that. Fundbox, for example, has only two repayment terms with its small business loans.

Accion requires the business to guarantee the loan. A personal guarantee is also required in many cases. This ensures that even though the loan may be for a small amount, Accion will be compensated if you cannot pay it back.

Your location and the Accion partner you’re working with will determine how quickly Accion can provide funding. In some parts of California, you can get a rapid fund of up to $8,000 with a quick turnaround time, but that’s not available in other parts of the country.

Helpful Tips

Accion requires more documentation than other lenders we reviewed, such as Balboa Capital, but its charter is to help business owners, not just lend them money. As a result, you’ll need to amass some documentation for approval. It’s best to collect it before you begin the loan process.

What separates Accion is the support: This lender is chartered with providing underserved business borrowers with access to capital. But its advocacy doesn’t end there; Accion provides borrowers with a network of business consultants and mentoring partners to help manage your loan and grow your business.

Accion business borrowers also get access to online resources such as case studies, whitepapers, articles and other information to help small business borrowers.

Key takeaway: Accion requires a lot of documentation to approve borrowers for its microloans, but it’s worth it, because this lender provides advice, counseling and help to grow your business.

Accion Features

Mentoring

Many small businesses need more than cash from their lender; they also need advice and mentoring. That’s what makes Accion stand out. Business owners borrow small amounts for specific needs – for example, to fill a cash flow gap, purchase more inventory or meet unexpected demand – and they often could use advice in those situations. Because Accion fills those needs, it becomes more of a partner than a lender. That type of advice can be invaluable for some struggling small business owners.

Relaxed Qualifications

Accion doesn’t have a minimum credit score requirement; it uses other criteria to gauge your creditworthiness. This can be extremely helpful for startups, as many have not had time to build up a high credit score.

Flexible Terms

Repayment terms on Accion’s microloans are flexible and customizable to a business owner’s unique situation, which gives you the freedom to pay back your loan on the terms that meet your needs. It also helps to ensure that, by taking out a loan, you aren’t digging yourself into an even deeper financial hole than you were in when you originally needed the money.

Key takeaway: We like that Accion doesn’t base its loan approval decisions on credit scores and that it lets you choose how you pay back your loan.

Customer Service

Business borrowers can reach Accion by email and phone. The lender also has a ton of helpful online resources, including guides, tools and videos.

Accion’s networking program connects borrowers with business experts who act as mentors and help to enroll you in special training programs. The lender also subscribes to a bill of rights designed to protect borrowers.

Source: Accion

Drawbacks

One potential downside of Accion is the amount of paperwork and documentation required during the application process, which may not be appealing to some time-pressed business owners. 

Additionally, you have to work with an Accion partner in your area, instead of with Accion directly. If that concerns you, it’s better to find a different lender. Accion isn’t for business owners that only want funding; this nonprofit lender wants to help small businesses grow. If you don’t want much attention, you may be better off with a different lender.

Tip: Before you apply for an Accion microloan, make sure to gather all of your documentation. Having your documents ready streamlines the process, which means quicker approval and funding.

Summary

Accion provides loans from $300 to $250,000. With this nonprofit lender, you get access to affordable funding, flexible terms, and ongoing support, making it our best pick for microloans. 

We recommend Accion for:

• Business owners who have low or no credit and/or are just starting out
• Small business owners in underserved groups, such as women, minorities and veterans

We DON’T recommend Accion for:

• Those who have good credit scores and established businesses that could get a loan without providing a lot of documentation and undergoing a lengthy underwriting process
• Business borrowers who want more than $250,000 in financing