By Kathy Bazan, Small Business Consultant
In a move to support small businesses impacted by the COVID pandemic, American Express donated $40,000,000 to the Accion Opportunity Fund, a non-profit fund pursuing the goal of a financially inclusive world. With this donation, Accion will fund loans to women, people of color, and immigrants.
Loans range from $5,000 to $100,000, depending on what the business needs. An average loan will be around $28,000. The length of the loans will vary from 12 to 60 months. Interest rates will range from 5.99% to 25.99%, depending on the applicant’s credit score. (Still, this may be less expensive than borrowing from a credit card or an online business lender which may charge as high as 94% interest.)
Requirements to apply:
- You must have been in business for at least 12 months.
- You must have proof that your business brought in at least $50,000 in revenue each year.
- You must own at least 20% of the business.
Founded in 1961, Accion focused on being a non-traditional lender in the Hispanic communities. By lending $5,000-$10,000 to an applicant with the dream to build a business, Accion found that its early borrowers were so successful at paying on their loans that Accion was able to lend more and expand their services to people of any color. By being a non-traditional lender, Accion does not focus on traditional collateral or credit scores as the line of demarcation between getting funded or not. For instance, in Arizona, Accion took a one eyed horse as collateral for a loan to launch a landscaping business.
Accion provides a hand up, not a handout by nurturing a virtuous circle: When the first applicants pay back their loans, that money is lent out to the next round of applicants. Accion predicts that the American Express donation of $40 million will turn into $125 million in lending in the next five years and will create or retain 10,000 jobs.
Last August, philanthropist Mackenzie Scott, ex-wife of Amazon founder Jeff Bezos, gave Accion a $15 million grant.
To get started with your loan application, go to https://aofund.org/#! And click on “Apply for a Loan” which is on the upper right corner of the banner at the top of the page.
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