Accion Texas | FAQs | Financing a Small Business

Who does ACCION Texas Inc. lend to?

If you are a small business owner or even an entrepreneur with an idea, you may qualify
for one of our loans. Typically we help small businesses and microenterprises that
banks cannot lend to because the borrowers are considered to be too risky, or
without sufficient business experience. Sometimes it’s simply that the amount of
the loan is too small for the bank to consider.

What types of businesses borrow from ACCION
Texas Inc.?

Borrowers of all types come to us and when they have repaid their first loans, they
will take out another to keep their businesses moving. We lend to builders and
hairdressers, auto shops, daycare centers, accounting firms and staffing agencies.
Our loans have helped them buy equipment and supplies, as well as material
and machinery. They also help build essential credit scores that will make them
‘bankable’ in the future.

What sort of financial institution is ACCION
Texas Inc.?

We are a nonprofit loan fund committed to empowering small businesses with
limited access to traditional sources of credit. Our goal is to be a sustainable
organization that contributes to economic development by
providing microloans and other services to our borrowers.

What kind of help does ACCION Texas Inc. provide?

Our loan program is designed to strengthen your business and credit record so
that your business will be ‘bankable’ in the future.
•    We provide small business loans at competitive fixed rates
•    We give you access to technical assistance
•    We report your good payment history to the credit bureaus to help you
      establish business credit
•    We help you with business marketing and assist you with networking with other
      small business through the partnerships we have established over the years.

What kinds of small businesses do you lend to?

We help many types of small businesses:
•    Those that fall just beneath bank guideline requirements
•    Business owners who, despite having good credit, are unbankable, for various
      reasons
•    Business owners who have limited credit, but good capacity to repay the loan
•    Businesses that bank guidelines suggest are too inexperienced or that are
      startups
•    Businesses that don’t have formal financial records or with limited credit

I don’t have good credit, but I need money to run my business. Can you help?

We will consider you whether you have good credit or not. In fact, the average credit score we work with is 575, much lower than a bank will consider. So, most of our customers have poor credit or no credit history. We work hard to help people with limited credit – we want you to rebuild your credit record. If your record is poor, we may ask that you get a co-signer. We make every effort to help your business succeed.

What specifically do I need to show I am worthy of a loan?

We look at these criteria primarily:
•    Your financial ability to repay
•    Your personal character
•    Your commitment and motivation to improve your business
•    A similar commitment to improve your credit
•    A good payment history with your other creditors – landlords, suppliers
•    Collateral you provide
•    You must not have had a Chapter 7 bankruptcy in the past two years
•    You must not have had a Chapter 12 bankruptcy in the past year.
•    If you’re a startup, you must have an alternate source of income.

What if I don’t have a business plan?

We will work with you to develop a viable business plan and provide ongoing technical assistance about managing your finances through one of the many partners who work with us to help get small businesses up and going and help them avoid common pitfalls that result from inexperience.

What kinds of loans do you offer to small businesses?

The chart below will give you a good sense of some of the loans we offer, but for the full range, CLICK HERE.

My bank said it will not offer a working capital loan,
but that is what I need the most to get my business going.

We do offer working capital loans, but they must be supported with collateral or by
an additional income source, as well as your personal investment of about 10 to 20%.

What are the requirements to get a loan?

The loan must be used exclusively for your business. If you are a start-up business, you must have another source of income to repay the loan. We require collateral equal to the amount of the loan you are requesting. We need to make sure you have the ability to make regular monthly payments, so active bankruptcy, liens and judgments are disqualifiers.

Why do you need collateral?

We need to secure the loan since it’s not a grant. If, for some reason, you cannot repay the loan, it still has to be repaid in some form. If you are willing to use something of value to you as collateral, that shows us that you are committed to your business. We want to see that you believe in yourself and your business enough to take some of the risk, as well.

What can I use as collateral?

You can use a vehicle, business equipment, jewelry or real estate, as long as it is not your home. If you’re planning to use your loan to buy additional equipment or vehicles, we can use that as collateral as well. If you already have assignments of contract, we can often use them, as well as Certificates of Deposit and other financial assets. We cannot use your home or home furnishings, nor items that you do not own free and clear. We also accept 3rd party collateral.

Who can co-sign with me?

A co-signer is someone who does not live in your household, but is a Texas or Louisiana resident, has excellent credit and the willingness and ability to make payments on the loan in case you are not able to do so.

Is this a government program – where do you get your funding?

We are not a government agency. ACCION Texas Inc. is a registered non-profit organization, but we do get some funding from government institutions. We also apply for grants and loans from private foundations and individuals, nonprofit organizations, banks, religious congregations, and corporate entities. Basically, we receive funding from anyone interested in helping small businesses gain access to resources and become strong contributors to the economy. We also have socially responsible investors who agree to a set return on their investment because of their commitment to giving a helping hand to business owners who need it.

You say you lend to all legal types of businesses – are there any industries that do not qualify for a loan from ACCION Texas Inc.?

All types of businesses are eligible for a loan through us except for the adult entertainment industry.

How long does the loan process take?

The average time is 15 days. But the overall time depends on how quickly you
are able to complete the application form and supply the requested information.
Our loan process is available online and this speeds turnaround. You can start
the application at one point and come back at a later date to complete it. It is
simple to complete and our loan officers are always available in person and
by phone if you need help.

Do I need a social security number or tax identification number to apply?

No, you don’t need a tax identification number – you can apply if you have a social security number or I-TIN number.

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