ACCION USA borrower becomes “Small Business of the Year”
Ever since my first day at ACCION USA, I have been dying to get the chance to get in the field to meet some of our clients in person. After all, our borrowers are the reason and inspiration for everything I do daily at ACCION USA. Finally, I was got the chance to go visit our client Carmen Ledesma, and I was more than thrilled.
I headed to Queens to visit her at her salon and esthetician school, and when I arrived she was busy running around helping students and greeting customers. She told me not to worry, she was used to it and was always busy. Lately, Carmen had been working harder than ever, but her efforts were paying off—she had just learned that she was going to receive “The Small Business of the Year Award” from New York City’s Mayor Michael Bloomberg at Gracie Mansion.
When things calmed down for Carmen, we sat down to chat about her and her business. Before 2003, Carmen was running a successful salon when she recognized a new business opportunity. Frequently, aestheticians and hairdressers with licenses from their home countries would visit her salon inquiring about how to obtain a license in New York. Originally from Paraguay, Carmen was compelled to help women new to the U.S. find work. So, she decided to start her own aesthetician school, focusing on the Latin community and holding classes in Spanish.
Carmen says most of her business was built thanks to her loans with ACCION USA (we know her hard work had a lot to do with it), she recalls that before her first loan she only had two hair dressers on staff, and now she has nine. She also employs two doctors, one aesthetician and four class instructors.
Still, achieving this success does not mean that Carmen is ready to take a vacation! Instead, she is ready to continue growing her business by opening a second school in Astoria, Queens.
And about her well-deserved award: she says that it was completely unexpected, but she does admit this makes her really happy and she dedicates it completely to her whole staff and everyone who was so perseverant about succeeding in this wonderful project—including ACCION USA!
Microfinance Week in Review- Week ending June 18
Some of the week’s news in the microfinance, green business initiatives and the small business sector:
- Microfinance Tied to Economy, Study Finds – Michigan State University News
- The Reality of a Sweet American Dream- Queens Courier
- Groupon Coupons: The Small Biz Challenge- Bloomberg Newsweek
- No Profits, No Loans: How to Survive- CNN Money
- Underbanked Strategies- The New Faces- American Banker
- Domestic Microfinance Steps into Credit Breach- Bloomberg Newsweek
Tags: accion usa georgia, client story, CNN, microfinance, small business, success story, U.S. microfinance
Why We Do This: Greg’s Microfinance Success Story
Elements of financial education appear throughout the lending process. From teaching individuals about the high costs of payday loans to showing business owners how to separate their personal and business finances, ACCION USA equips and empowers entrepreneurs with the education to achieve their financial goals.
Every so often, one of those days comes along that brings you back to the roots of what you do. It’s that client, that partner, that sale or proposal – that something that stands out and reinforces your daily work. It’s what causes you to go home with a smile on your face.
I’m fortunate to work in a place where these days come frequently – weekly, not quarterly. At ACCION USA, our success comes from our clients, and you’ve probably seen our many client success stories. Read one, and you’ll see the power of matching a microloan with the entrepreneurial spirit. It’s exciting, and it’s inspiring.
What you might not see, though, is the added value of financial education – an element of ACCION USA’s service portfolio that makes us unique among microfinance organizations. Elements of our financial education program are weaved into each and every client success story. Whether the client attended a legal counseling workshop, used our online budgeting worksheet, or received a half-hour of technical assistance from a loan consultant, financial education is ever-present in our work.
One of our most recent success stories is a true testament to this service.
Greg’s journey with ACCION USA began in February 2009. He owns an answering service business and needed a loan to keep up with his growing list of clientele. When a damaged credit history and low credit score meant that he didn’t qualify for a loan, Greg demonstrated two characteristics that entrepreneurs tend to possess: persistence and a desire to learn. He contacted our Boston office, determined to understand how he could improve his credit history.
That call was the first of many. Throughout the next year, my colleague Melissa led Greg through the process of improving his score. With her guidance, Greg took control of his debt, improved his credit score over 60 points, and regularly called to check in with Melissa. And his hard work paid off: last month, Greg was approved for a loan.
Greg is proof that financial education can give hard-working, determined individuals the boost they need to realize their entrepreneurial dreams. And all I’m left to say is congratulations. Congratulations to Greg on his persistence and drive to grow his business. Congratulations to Melissa for her dedication.
And congratulations to all of ACCION USA’s supporters for helping connect them. You make this all possible.
Tags: accion usa, client, Financial Education, microfinance, microloan, service, small business, success story, technical assistance, value added, workshop
Hope is the Color Green: ACCION USA’s All New Green Loan Program
The birth of the modern environmental movement is celebrated each year on April 22nd. Today is the movement’s 40th anniversary and the day ACCION USA, a pioneer in U.S. microfinance, chose to launch its Small Business Green Loan Program.
Thanks to ACCION USA's Green Loan Program, entrepreneurs will have the green loans they need to build a strong business AND a healthy planet.
Among other things, ACCION USA’s Green Loan Program seeks to help entrepreneurs to leverage their profits to improve the larger community. After a year of dialogue with small businesses, we learned that their largest challenge to going green was lack of access to the support to take the leap. However, with the right financing and training, small businesses have the opportunity of the decade. Amid economic turmoil and hurting profits, “greening” has the potential to slash costs through energy efficiency and attract new environmentally conscious consumers – all the while making the earth a better place to inhabit.
On April 22, 1970, 20 million Americans took to the streets, parks, and auditoriums to demonstrate for a healthy, sustainable environment. Today, in 2010, we’re struggling with similar issues that we did 40 years prior – we are a country at war, struggling with an economic downturn, looking for hope. In many ways, the Obama Administration has turned hope the color green. In no other time in history have small businesses had so many incentives to go green. And even with all those incentives, they are asking for a hand up to make the first step. Microlenders like ACCION USA are uniquely positioned to bridge that gap for weatherization contractors, restaurants, transportation, corner stores, retail and offices alike.
Learn more about ACCION USA’s Small Business Green Loan Program at www.accionusa.org/green and spread the word. Happy 40th Anniversary of Earth Day!
Tags: earth day, green, small business
CARD Act Gives Consumers a Break
I want you to think back to the very first time you opened your mail to find that golden ticket: a pre-approved credit card offer. Was it been everything you hoped it would be? Or did you fall for some of the oldest tricks in the book…
Were you the college freshman who now realizes that the free pizza, Frisbee, and bottle opener at the credit card company’s fall expo booth might have actually cost you more than you thought (cough, 70” flat screen TV with 24% APR, cough)? Did you find out the hard way that “due on March 17th” actually meant “due by 9:00am on March 17th, so it actually needs to be here on March 16th… which conveniently falls on a Sunday, so let’s have it here by close of business on Friday the 14th”? Or maybe it just took a little too long to realize that consistent $30 monthly payments on your $800 couch would make your payment plan longer than your sofa’s life.
Every year, a new crop of credit card users finds themselves in these types of predicaments. Fortunately, the new Credit Card Responsibility and Disclosure (CARD) Act now makes each of these situations much less likely to occur.
The legislation is complex, but the highlights include limits on interest rate hikes, broader definitions of “on time” payments, new rules for pre-existing balances, and requirements on disclosures and extending credit to young adults. No more pre-5:00pm deadlines. No more interest rate hikes without 45 days of notice. No more credit card reps hiding in wooden horses allowed within 1,000 feet of college campuses.
The CARD Act’s transparency requirements may be particularly beneficial to small business owners in offering them an opportunity to strengthen their personal credit histories, further allowing them the opportunity to finance new employees, purchase inventory, or open a storefront. As an organization, ACCION USA’s goal is not only to provide small business owners with a transparent financing alternative to credit cards but also to teach them the necessity of managing credit card debt. The underlying message is simple: spending and paying responsibly keeps money in your business. And money in small businesses means economic recovery for our country.
Let’s hope that the CARD Act’s transparency requirements will mean the same thing.
Tags: accion usa, CARD Act, credit card, Financial Education, interest rates, legislation, microfinance, money management, new law, small business
Is ACCION USA More Than a Microlender?
For Margarita Amador, ACCIÓN USA served as more than just a lender; “ACCIÓN USA has helped me tremendously because I received a lot of advice not only on how to continue with my business, but on how to improve and manage my personal credit.”
Knowledge is power. What a simple but empowering phrase. It resonates with me on so many levels: as a recent college graduate, as a woman, and as a voter. So, when the latest FDIC white paper, Financial Education and the Future, outlined the startling state of financial education in the United States, it prompted me to consider ACCION USA’s role as not only a microlender but also as an educator.
The FDIC paper reported that an estimated 10-20 million individuals are unbanked – that is, they have no relationship with a bank. Moreover, this trend appears most acutely among new immigrants and members of minority communities. A staggering 35% of our county’s Latino population is unbanked, due equally in part to cultural differences, language barriers, and institutional distrust. This unbanked trend continues to lead these individuals to expensive alternative banking sources, such as predatory payday lenders.
Some advocate regulating these alternative sources, but rate caps only go so far. And more importantly, they don’t directly target the financial illiteracy that frequently lies at the root of this problem.
ACCION USA targets this root. We’re in the asset-building business, and education is an asset that adds value for generations to come. Our interactive workshops show individuals that saving is important – if only $5 a month. Our personalized technical assistance explains why good credit is crucial in this country, and why debt must be managed and not ignored. Our one-to-one business counseling demonstrates that planning and cash flow and recordkeeping are essential for business survival.
For some, these things might be common sense. But consider the perspective of a recent immigrant or of someone whose parents immediately cashed each paycheck just to put dinner on the table. Just as your home environment will influence your knowledge of sports, music, or any other activity, it can also predict your future money management skills and those of your children and of your children’s children.
Instead of allowing financial illiteracy to perpetuate, ACCION USA takes the initiative to educate and instill in individuals the education and tools they need to succeed in this country.
And by doing so, we’re seeing every day that knowledge really is power.
The Story of Tanto Dulce Cafe
Monica's drawing of her cafe, Tanto Dulce
When ACCION USA borrower Monica Gonzalez designed the interior of her new Harlem café, she did so from a hospital bed. Monica was recovering from major emergency surgery in the months before the opening of Tanto Dulce (“So Sweet” in English), a dream which had been years in the making.
Eight years ago, Monica moved to the U.S. from Venezuela, where she had worked as a lawyer, in order to give her children better opportunities. Not knowing English, she found it difficult to secure a legal job, so she turned to her hobby: baking. After an apprenticeship and classes where she learned to make classic Italian desserts, Monica opened up a wholesale basement space from which she sold to local food trucks serving the Hispanic community.
ACCION USA gave Monica a loan to open up a storefront on Broadway in Harlem. However, she started having stomach problems around the same time. When they became too painful to ignore, she saw a doctor, who told her she would need to have surgery immediately. As her family and friends were completing the move into the Tanto Dulce space, Monica directed their efforts from her hospital recovery room, drawing pictures like the one above.
Monica’s unassuming demeanor hides a fierce entrepreneurial drive that is evidenced by her perseverance. In addition to continuing to sell wholesale goods from the basement space, she is taking more classes to broaden her cooking repertoire so that she can open a wine bar one day.
On a recent visit, I found the tiny café full of both students and local patrons, all enjoying their late-morning snacks and coffees as studying as reggaeton radio music softly played in the background.
Check out a behind-the-scenes video here on our YouTube page!
Tags: baking, cafe, microcredit, pastry, small business, success stories, us microfinance, venezuela
Who Is Lucy Valena and Why Does She Rock Our Socks Off?
It seems like everybody’s talking about Lucy Valena these days.
And I’m no exception.
Lucy Valena started making a splash right away when we met her in September 2008. From the start, each AUSAer she spoke with felt her (caffeinated?) energy/excitement and recognized her determination, especially as she moved quickly through the loan process. Our $4,000 loan allowed her to purchase the equipment to launch her mobile espresso catering business, Voltage Coffee, an idea brewed from her barista days in Seattle and lifelong love of espresso.
Right after her business opened and the foam started flowing, the notes in our internal communication system show something different than your daily roast variety of comment strings. In December, Sherri, one of our illustrious loan officers, called to congratulate Lucy on the article about Voltage Coffee in the Boston Globe. Most recently the Boston lending team gathered around a computer screen to watch Lucy in a nationally televised CNN clip.
One Small Business Loan Disbursed, 27.2 Million to Go
Risa Sherman, a consultant for Samuel Adams/ the Boston Beer Co., our delicious corporate partner for Brewing the American Dream, hit the bull’s eye in her post about Lucy’s success:
Lucy is an example of the amazing spirit of small business heroes who put it all on the line every day in dedication to their craft. She is representative of the many independent, small business owners who are the faces of Main Street America. Her business and her life are so inextricably intertwined – the success of one is synonymous with the stability of the other. ~ Risa Sherman on Causenation.com
This is evident from Lucy’s own words, given in a speech just last year:
This summer, the time I wasn’t working my day job or sleeping was mostly divided between writing my business plan and research and development. I crunched numbers, wrote and rewrote until my ideas made sense, and conducted experiments with espresso and an assortment of random ingredients in hopes of finding tasty combinations. When my business plan was finally finished, I went to the SBA and met with a representative from SCORE to discuss what I should do next. I needed a loan, but because of my age I am not exactly the first person an average bank would hand cash to, even back in August. The business councilor at the SBA literally read my entire business plan cover to cover (while I squirmed in my seat), and afterwards suggested ACCION as a good place to start. (Read the full speech on Risa’s blog)
Lucy’s struggles and successes stand as one story that gets repeated every day through out the US since 27.2 million people run their own small business (SCORE) If you know somebody running a business or looking to start one, let them know about us! You never know if your favorite coffee shop’s bank just increased their minimum credit score by 50 points.
p.s. This is just cool: The Latte Zoo (Thanks Boston Food Monkey!)
Tags: CNN, coffee, entrepreneur, Sam Adams, small business
Love for Local Brands
Who doesn’t like cupcakes? And pirates? (Johnny Depp as opposed to Somali of course) John Earle, the founder and creative mind behind Johnny Cupcakes t-shirts combined baking and cross-bones to create a brand of clothing that has catapulted in popularity far beyond what normal frosting is capable of. Johnny turned down big name companies who wanted to buy his brand, such as Urban Outfitters, because he believes in the power of keeping a brand limited AND building relationships with his customers. He says that he “treats every customer like they’re friends and family.” He quips that you don’t see Ralph Lauren eating pizza in his store with the customers. Or sponsoring events such as a midnight viewing of “The Wizard” (with Fred Savage) complete with on-movie-screen Nintendo battles at a local non-profit movie theater (Coolidge Theater).
Carlos Gonzalez-Plata, a retail clothing entrepreneur and ACCION USA client, knows all about connecting with customers for success. Carlos fled his native Colombia when guerilla forces tried to seize his farm and two restaurants and moved his family to Atlanta, GA. As he settled into his new community and spoke with fellow Colombians, he discovered that people wanted to keep up with Colombian fashion trends, but there weren’t any stores featuring Colombian clothes. So he founded Luna Fashions. Carlos’ business took off immediately, which is outstanding, but comes with its own problems. To keep enough inventory in stock, he applied for a business loan, but got rejection after rejection. Two factors were especially hurting Carlos’ application with traditional lenders: his very short credit history and the youth of his business. Many banks consider start-ups any business open less than 2 years, and this often hurts their chances at qualifying for a loan. ACCION USA does lend to start-up businesses. (And we consider a business established if it’s over 6 months in existence and profitable) Carlos saw an ad for our loans in the newspaper, applied, and received financing for increasing his inventory. He said, “ACCION USA’s help has been very good for me. It was much easier and cheaper.” Get more information on our small business loans
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Carlos at the counter of Luna Fashion
Recently Johnny Cupcakes was highlighted in an article on Inc. Magazine’s website. They are vying to be in the top 500 fastest-growing privately-owned companies in the US. Carlos has a full warehouse, an active catalogue business, and a storefront with dozens of sales people. Both Carlos and Johnny are successful because they know the people they sell clothing to. Add to that modesty, hard work, and compelling personal histories and you have a definite recipe for retail success micro-business style!
Tags: accion usa, alternative credit, Colombia, Johnny Cupcakes, microfinance, retail, small business
Credit Card Accountability Now!
One day, 4 years ago
I receive a pre-approved credit card offer. <cue excited squeal> My 20 year old self had never signed up for a credit card before so I call the phone number on the letter. I speak with a very nice customer service person. He explains that for the first 3 months I would have 0% APR on purchases and balance transfers. After 3 months I would pay interest on purchases, but I wouldn’t have to pay interest on balance transfers for 6 months. Awesome! I ask some more questions that I’d prepared, and it looks like I have all the relevant information. So I sign up for the card, use it to pay some bills, and transfer $500 to have some just-in-case cash since I won’t have to pay interest for 6 months. Brilliant, right?
**** Fast forward 3 months ****
I’ve only purchased $75 with my card because I know if I don’t want to accrue interest I need to pay this down before my statement comes (electronically to save paper, of course). I pay the $75, but the statement has accrued interest. WHAT!? There must be a mistake, so I call customer service. Another very nice customer service person tells me that my payments pay down the balance transfer first and then card purchases. WHAT!? You have got to be kidding… but he’s not. Awesome. I didn’t even know to ask that question. What a nasty trick! Why hadn’t the first customer service person made this clear to me? Does this happen to other people? Am I just incompetent? I feel angry, hurt, and duped. I pay back all the balance transfer and the purchase amounts, and sit down with a pint of ice cream…
******************************************
What do we want? Credit Card Accountability and Disclosure!
But first a message from my favorite fake news pundit
The Credit Card Accountability and Disclosure Act (CARD Act) aims to:
- Prevent Unfair Increases in Interest Rates and Changes in Terms
- Prohibit Exorbitant and Unnecessary Fees
- Require Fairness in Application and Timing of Card Payments
- Protect the Rights of Financially Responsible Credit Card Users
- Provide Enhanced Disclosures of Card Terms and Conditions
- Strengthen Oversight of Credit Card Industry Practices
- Ensure Adequate Safeguards for Young People
- Enhance Penalties for Non-Compliant Credit Card Companies
- Provide Gift Card Protections
- Encourage Transparency in Credit Card Pricing
- From US Senate Committee on Banking, Housing & Urban Affairs
A more detailed, but very reader-friendly explanation of the bill can be found here.
The CARD Act would have protected me in various ways.
- As a 20 year old, a person over 21 would have to provide a signature for the card.
- I may not have even received that offer by mail because the bill would restrict pre-approval offers to those under 21.
- Payments would first be applied to the credit card amount with the highest interest rate.
- Terms of the credit card would be disclosed in plain written language and in plain sight.
Small business lifeline…
Many small business owners put business debt on their personal credit cards. Not only does this mean an APR of up to 30% on their debt and the potential for sudden, baseless terms changes, but it also can hurt their ability to access other business working capital. Lending institutions, banks, SBAs, and even ACCION USA, look at credit reports to process loan applications. A person with business credit card debt of $65,000 (which I’ve seen before) probably has a low percentage of available credit and already has a big monthly payment (whose terms could change any day). Plus, after you spend over 35% of the cards limit your credit score starts decreasing. Oy gevault!
Help is on the way
These are some great tips gems of advice
Credit Card Tips in a Recession
Also important
Make your voice heard in the Senate! Go here to add your name to the petition of people supporting the CARD Act. Or contact your senator directly. Find your senator here. If you want me to email you a letter to send to your senator leave a comment (I’ll see your email address on the back end so you don’t have to write it in the comment) and I’ll send you one. Couldn’t be easier.
Let’s show those credit card companies what we’re made of!
Tags: CARD Act, Colbert, credit cards, small business