Accion Business Loans is a non-profit community that helps provide loans to business owners with small enterprises across many states. In addition, they are dedicated to promoting fairness in race, economy, and gender through available loans, community connections, and guidance in English and Spanish.
Furthermore, this funding organization assists its customers, thanks to their financial aid and other assistance, comprising 90% of women, people of color, and those with modest incomes. Moreover, it enables an impressive 96% survival rate for small businesses they support.
How Do Accion Business Loans Work
Before you consider taking a loan, you can obtain a quote on Accion’s website without causing an impact on your credit score. Moreover, you can secure the loan online when you are ready. Additionally, Accion will mandate some personal details such as social security number and also present business information.
This business information includes evidence of at least three months of operation, revenue, expenses, and tax returns. Furthermore, you will be offered various features of different length terms, interest rates, and monthly payments. Once you select an offer, you will undergo final confirmation before obtaining a loan agreement.
Accion typically takes about five to seven days to process and approve loan applications. Lastly, the estimated time for disbursement of funds is not provided.
Types of Accion Business Loans
Accion provides the Progress Loan program for small enterprises offering fixed interest rates ranging from 5.99% to 18.99% APR. Also, the most favorable rates are accessible to borrowers with excellent credit histories and financial standings for traditional bank loans.
Additionally, repayment conditions are similar to those offered by traditional lenders. Although loan amounts typically begin at $5,000, this figure may differ depending on the state. For instance, the least loan amount offered by Accion is $15,100 in Kentucky and Maryland. For further details, refer to Accion’s state licenses and disclosures page.
What Does Accion Business Loan Offer
Accion Opportunity Fund extends small business loans ranging from $5,000 to $100,000. To be eligible for this loan, your enterprise should be operational for a minimum of three months. Moreover, Accion evaluates your credit history, business revenue, expenses, and other details to assess your business’s viability.
Upon approval, you will be presented with a range of loan options featuring various repayment terms, monthly payment schedules, and interest rates. When Accion is unable to accept your loan application, they may allocate you to their partner lenders or present alternative resources.
Additionally, Accion offers personal business coaching, mentorship, and leadership training programs, available in English and Spanish. Their business resource library is also equipped with articles, videos, and interactive lessons covering topics. This includes loan management, marketing strategies, and other essential aspects of business growth.
How to Be Eligible For An Accion Business Loan
While Accion does not identify a minimum credit score, it emphasizes that the approval process considers factors beyond just your credit score. This means that individuals with normal credit may still be eligible for their programs. However, applicants with good credit histories and established business backgrounds are to receive more low-interest rates.
In addition, Accion evaluates your business’s financial records, tax returns, and other documentation to determine your qualifications for their programs. Additionally, Accion mandates that applicants have been operating their businesses for a minimum of three months to qualify for one of its small business loans.
Advantages of Accion Business Loan
Accion is a nonprofit organization that provides small business loans and financial services to entrepreneurs who might not have access to traditional financing. Accion Business Loans present numerous benefits for small enterprises seeking financing solutions:
Helps Small Businesses
Accion extends assistance to over ninety percent of small business loan recipients comprising women, people of color, or individuals with low-to-moderate incomes.
Minimal Interest Rates
Accion Opportunity Fund maintains rates comparable to traditional lenders, even while offering to higher-risk businesses. Moreover, their rates commence at 7.49 percent (simple interest), while other online business loans could exceed double-digit.
No Prepayment Penalty
There are no penalties for early repayment of the loan with Accion Opportunity Fund. Additionally, it allows the lender to reinvest the funds in another small business early.
Mentor and Educating Support
Accion extends financial education and support services to aid borrowers in effectively managing their finances. These services may encompass workshops, training sessions, and one-on-one counseling aimed at enhancing finances and business management skills.
Accion Business Loans provide a blend of financing options, support services, and community impact, rendering them a valuable resource for small businesses aspiring to expand and thrive.
Disadvantages of Accion Business Loan
Although Accion Business Loans provide several advantages, it’s essential to acknowledge potential disadvantages as well:
High Minimum Loan Amount In Some States
Accion Opportunity Fund does not begin funding at $5,000 in every state. The minimum funding threshold varies by state, starting at $10,000 to $15,000 in some regions and even higher in others. For instance, in Oregon, funding commences at $50,100.
Term Loans Only
Unlike its competitors, Accion Opportunity Fund solely provides one type of business term loan and does not provide multiple options such as business lines of credit or equipment loans.
Fees Charges
Accion’s website may not provide detailed information regarding origination fees, late fees, and other potential loan costs, lenders typically reveal such specifics during the loan application or through loan documents.
Generally, Accion business loans can be a valuable resource for entrepreneurs who need financial assistance and support to grow their businesses. However, it’s essential to weigh the advantages and disadvantages carefully before applying.
How to Apply For a Business Loan with Accion
If you think you qualify for a small business loan from AOF, you can take advantage of their online application process. Here are the basic steps to apply for an Accion business loan:
Visit The Website
You can apply for Accion’s business loans directly on their website. Moreover, you can visit their progress loans page, which provides a comparable loan product in collaboration with funding from American Express.
Gather Documents
To complete your application, you may need various documents such as an updated business plan, bank statements, your EIN or ITIN, personal and business tax returns, information about your business assets, and other relevant paperwork.
Fill Out A Loan Application
You have the option to start the online loan application or contact their customer service line to apply via phone. Also, provide personal information like your contact details and Social Security number (SSN), along with comprehensive details about your business. This includes its financial performance, industry specifics, and additional relevant information.
Prequalify
The application form will request basic information, including personal details and details about your business’s revenue and expenses. Once you submit this initial information, you will get a quote for a business loan. This quote serves as a prequalified offer and will not affect your credit score.
Compare Loan Offers
You will have the opportunity to compare loan offers with various term lengths, payment options, and interest rates. Moreover, if Accion is unable to provide a quote, they may direct you to other lenders or resources for assistance.
Submit Application
If you find a loan offer that meets your needs, you can choose it and proceed to submit a full application. Also, you will be required to upload supporting documentation, such as tax returns, to allow Accion to conduct a thorough review of your business.
Await For Approval
In Accion, your documentation typically takes one to two business days. Later, it may take up to one week to receive a decision on your application. Once approved, it takes an extra two days to get your loan agreement and up to four days to receive the funds. In addition, the process of applying for and receiving your Accion business loan could span one to two weeks.
Close The Loan
Once Accion processes and approves your application, you will proceed to sign your final loan documents. Additionally, you will collect your funds, and you can begin repaying the loan according to the agreed-upon terms.
Accion separates itself with its eligibility criteria and straightforward application process. The following steps can assist you in assessing your chance of approval for the small business funding you require.
Accion business loans may not be suitable for everyone, but if you encounter challenges securing funding from traditional lenders, they can offer a viable option. While the borrowing limit is at $250,000, which may be lower compared to other lenders, the interest rates are made to be more manageable.