Loan Funds

ACCION Texas Opportunity Fund - Opening Doors for Small Business!

What is the Opportunity Fund?

To commemorate 10 years of award winning growth and service, ACCION Texas has launched a $10 million initiative to provide socially responsible high-worth individuals, institutions, and foundations, the opportunity to make an extraordinary difference in the futures of emerging microentrepreneurs and their business families, and communities. Your contribution will establish a named revolving loan fund that will provide the financial support small business owners need to strengthen their businesses, stabilize their incomes, create additional employment, and contribute to the economic revitalization of their communities. The Opportunity Fund will be capitalized with grants ranging from $25,000 to $1 million individually named small business loan funds. Commitments may be paid out over time and all funds will be used solely for lending. As loans are repaid, the principal from your loan fund becomes available to help other worthy entrepreneurs.

Opening Doors for Small Business!

Have you ever wondered who exactly benefits from your generous contributions? Did you know that the individuals and families you help want to acknowledge you personally for believing in their dreams? If you could, wouldn't you open a door for a worthy entrepreneur? Borrowers accessing funds from your loan fund will receive a plaque for their storefront/office that states: "Your Name & ACCION Texas want me to succeed in my business." You will receive photos and write-ups on the small businesses your loan fund is helping, including updates and business anniversary information. You may contact borrowers periodically, if desired, and you may use the heart-warming stories of the borrowers you support in your promotional materials and public relations programs. These real-life stories share the tremendous impact a small loan can make in the life of a struggling entrepreneur, their family, and their community.

Who will Benefit From My Named Loan Fund?

The Opportunity Fund serves very small business marginalized from mainstream financial services. Borrowers typically do not have bank accounts or credit cards and tend to rely on expensive and predatory fringe financial services, such as payday loans, check-cashing services, and pawnshops to fund personal financial needs and business endeavors. In many cases, lack of formal financial statements, blemished credit histories, and limited collateral keep these businesses from qualifying for traditional bank credit. Over 80% of borrowers are Hispanic or African-American, over half are women, and most have incomes at or below federal poverty guidelines.

Loans up to $50,000 are available to qualifying borrowers with collateral, but the average loan size is $4,500 - $7,200 with a 12-24 month payback term. About half of borrowers have established businesses and half are just beginning their new ventures. A vast majority of borrowers receive more than one loan as they are able to demonstrate credit worthiness. Borrowers receive technical assistance from ACCION Texas and local small business technical assistance providers.

Who is ACCION Texas?

Launched in San Antonio in 1994, ACCION Texas is a 501(3)(c) nonprofit loan fund whose mission is to provide loans to small business owners lacking access to commercial credit. ACCION Texas has successfully fulfilled its mission, providing $48.5 million in 7,310 loans to over 4,754 clients in San Antonio, Houston, Austin, Brownsville, Edinburg, El Paso, Corpus Christi, Dallas/Fort Worth, and 73 largely rural counties in Texas. In 2001, ACCION Texas was recognized by the Association for Enterprise Opportunity as the largest microlender in the United States, both in terms of number of loans outstanding and loan portfolio outstanding. This landmark accomplishment was achieved while maintaining a historical loan loss rate of just 6%. ACCION Texas' experience and professional staff of 35 administer an $11.9 million dollar loan portfolio.

What's The Impact Of Your Contribution?

Support from your revolving loan fund will help small business owners purchase inventory, obtain equipment, and enhance their working capital. Studies on the impact of ACCION Texas loans report important financial growth in business profits, business equity, and take-home household income. Borrowers supported for an average period of 2.5 years, increase business profits by 96% and business equity by 46%. Just one loan increases take-home pay by 24%---improving a family's economic stability and well-being and, by default, a family's ability to save and to create and retain wealth. Economists calculate the economic impact ACCION Texas loans on the community as the equivalent of a 61% social return on investment. Every dollar lent creates 61 cents in new local income, every year. Borrowers also report many non-financial benefits such as increased pride, self-realization, and greater community participation. An investment available in today's market and one of the most satisfying and personal investments you'll ever make.

The Opportunity Fund is a permanent equity fund restricted in use to loan capital. Your investment will remain a revolving loan fund into perpetuity, with the potential to help hundreds and even thousands of small businesses get the start they need. The Opportunity Fund is also an important part of the ACCION Texas strategy for achieving 100% self-sufficiency. The Opportunity Fund will match $1 of equity capital to each dollar of borrowed capital currently available for lending, doubling funds available for small business loans. Improving the mix of debt and equity in the loan capital pool reduces interest expense, improves profitability and performance measures, and eases net asset ration covenants imposed by lenders. The Opportunity Fund helps us all.

Several levels of investment, with pay-in terms to accommodate your needs, allows you to choose the impact your loan fund will have in your community.

*Assumes average loan size of $5,000 to $750, 12-month loan term, and annual social return on investment of 61%.

You may grow your loan fund, over time, to any level that's comfortable for you.

Who Gave You Your Start?

We invite you to help us open a door for someone like Juana Perez...

Juana Perez may sometimes make her loan payments in quarters, but don't let that give you the wrong impression. She is an entrepreneur to be reckoned with. A second generation Mexican-American, Juana labored for years as a migrant worker. Then, in 1996, she used her savings and loans from local moneylenders to start a grocery store in the kitchen of her small trailer home in a colonia outside the town of Alamo.

Juana knew the kind of products her neighbors wanted and she did a brisk business from her tiny kitchen. But the interest rates she was paying - nearly 30% - took most of her profits away. No matter how hard she worked, she could never get ahead.

When ACCION Texas opened in Edinburg, Juana took out a loan of $500 to buy a cash register. Three loans later, her business has blossomed. She has a snow cone machine, a refrigerator, and a stock of wares ranging from fresh eggs to yo-yos. Her store is now housed in a tiny wooden building by the road, with a picnic table for patrons.

"Juana doesn't read or write - she can sign her name and that's it. But she knows her figures", says Janie Barrera, president and CEO of ACCION Texas. "She is a very good businesswoman."

For more information on the Opportunity Fund, please contact:

Janie Barrera, President and CEO