There is a lot of talk out there about Accion small business loans.  When it comes to this type of alternative lender, it can be hard to know for certain what you are getting into. There are so many predatory lenders in the industry these days, you can never be too careful. You should research any lender before you apply for a loan from them. In this review, we’ve done the work for you to help you  make an educated decision.

Is An Accion Business Loan for You?

The thing is, Accion isn’t for everyone. Some of their loans are specific to certain regions. Others are for pretty much anyone nationwide. What’s what, and what’s right for you? 

What is Accion? 

They are a nonprofit lending network dedicated to helping small businesses.  They offer small business loans, some grant opportunities, and other resources designed to help both startups and established small businesses grow and thrive.

Globally they have been working their magic for 55 years across 4 continents.  Tens of millions of entrepreneurs have been helped by them.  They came to the United States in 1991.

Who Do They Lend to?

They lend to small business owners in general, from all backgrounds and most industries. However, they specialize in underserved populations. These may include:

• Women-owned businesses
• Veteran-owned businesses
• Businesses owned by Native Americans
• Business owners with disabilities
• And Minority Owned businesses

They also boast specifically of helping to fund salon owners, green businesses, and those in the restaurant, food, and beverage industries. 

What Types of Small Business Loans Do They Offer?

There are a few different types of loans. However, two of them are only available in certain areas of California. These are the Rapid Loans and the COVID-19 Relief Loan program.

Alternatively, they also have SBA Community Advantage loans that are available nationwide. These loans range from $50,000 to $250,000.  These are for established businesses with less than 100 employees.  It is also available to partially funded startups that need larger loans to scale.

You can also see more options that may be available to  you by specifying which area of the country you are in by zip code.  Interest rates vary by region and risk factors, ranging from 7% to 34% APR. 

What Makes Them Different From Other Lenders?

They do not rely as heavily on credit score in the decision making process as more traditional lenders do.  Rather, they look closely at the whole financial picture. If your credit isn’t great, they work with you to help determine your business strengths.  Then, they help you determine which products they offer may be a good fit for your business.

The application process is completely online. However, you are not left wondering if you qualify or not, or why you do not if that is the case. Within 2 days you will receive a personal phone call walking you through your approval status. If you are approved, they will work with you on the rest of the process.

If you are not approved, they don’t just say “see you later.” They offer help and resources to improve your situation.  You can reapply in 3 to 6 months.

Not only that, but they have some grant opportunities as well. First, there is the Small Business Live Restart Grant Fund.  They also partner with Samuel Adams for the “Brewing the American Dream” program, which includes the “Pitch Room” grant competition.

Do You Have to Have Good Credit to Qualify for an Accion Loan? 

They do not rely as heavily on credit as traditional lenders. However, they do require a minimum personal credit score of 575. That is, except for the Community Advantage program which requires a minimum of 525.  In addition, they have strict requirements related to debt and financing. These include: 

• You must be current, described by Accion as no more than 30 days late, on all debt and bills. 
• If you are late, within the 30 days, it must be by less than $3,000. 
• You can have no bankruptcy in the past year. 
• There can be no foreclosures in the past 2 years.
• There must be at least 2 years worth of revenue.  
• You must have the cash flow to repay the loan. 

For startups, the 2 most recent pay stubs must also be provided, along with a partner referral from an organization such as SCORE or an SBDC.  There must also be a business plan with a cash flow projection, and the owner must have at least 20% of the total cost invested.

Other restrictions may apply based on a number of factors. 

Do They Have a Good Reputation? 

As part of a review, it is always good to look at other online reviews and ratings on sites such as the Better Business Bureau and Trust Pilot. The organization is not rated on either of these.  In fact, there are not a ton of reviews out there at all. However, their longevity and lack of substantial negative reviews speaks volumes. 

Accion Pros and Cons

The major pro of working with Accion is the accessibility to underserved populations. They are a nonprofit organization with a mission to help, not hinder, small businesses.

The big con is that their product options are severely limited if your business is not in California.  Also, the interest rates can get high, depending on where you are and what risk factors are present. 

What to Do If You Do Not Qualify

What if you do not qualify for a loan with Accion? Well, there are a number of options. However, as mentioned, they will help you understand the reasons why you did not qualify, and help you figure out how to change that.

What they do not do is help you find other funding options, or help you build your business credit. All of their loans are business loans, and therefore guaranteed by the business. Most, however, will also require a personal guarantee.

They will offer coaching to help you correct the issues keeping you from loan approval with them, but they do not work on establishing and building a business credit score. This is  hugely important to overall company fundability.

This is where the business credit experts at Credit Suite can help. These experts can help you assess your fundability, and walk you through the process of correcting it. In addition, they already work with reputable lenders, and can help you find the lenders and funding options that best fit your needs and eligibility right now. 

Conclusion

This is the real deal, and they offer great options for those in underserved populations or that do not have great credit.  It’s concerning that they do not list more solid interest rates on their website, but this is for a very good reason. Rates vary widely based on location. However, the online application process is fast.  You should know what, if anything, is available to you in a couple of days.

Also, keep in mind that whether or not you can get a loan from Accion, Credit Suite’s experts are available to help you build fundability, increase your business credit score, and make sure your business is in the best position to get the funding it needs at the best rates and terms available.