Accion East

At a Glance

National Office: 
80 Maiden Lane Suite 903
New York, NY 10038
Phone: (866)-245-0783

Paul Quintero
People Served: 
19,012
Year Founded: 
1991
Tax ID: 
11-3317234

Focus area(s):

Microlending

Description

Accion East (“Accion”) is a leading, U.S. microlender that helps individuals realize their entrepreneurial dreams through access to capital and financial education and capacity building. With economic opportunity, these entrepreneurs—often minorities, immigrants and women—can build assets, provide for their families, create jobs and uplift their communities.

Impact and Outcomes

Each business creates and sustains 4.3 jobs
97% of businesses remain open
Businesses grow revenue by 16%
Business owners increase their take-home pay by 25%
85% of business owners report that their business stabilizes or improves their household.

Mission & Goals

Accion East is an award-winning microlender with a mission to empower low- to moderate-income business owners through access to capital and financial education and capacity building.  Accion East’s vision is to create a world of financial inclusion for all.

Accion East’s impact spans the entire east coast and remote cities and towns across the country. Accion East reaches entrepreneurs through offices in Boston, New York, Miami and Orlando and a proprietary Internet lending platform (managed in Boston).  Since opening its doors in 1991, Accion East has helped over 50,000 individuals, and their families, achieve financial and economic inclusion through training and by providing over $154 million in capital.

Programmatic goals: provide affordable credit and free financial education to hardworking entrepreneurs and their families. With these tools, Accion East's clients become financially self-sufficient, they increase their incomes, they create jobs for themselves and others, and they eventually break into the financial mainstream.  Equally important, clients deepen their business and financial acumen, leading to informed financial decisions that have an impression on future generations.

Growth plan goal:  increase the penetration of a market estimated at over $6 billion.  At only 1% penetration, Accion East has the potential to grow the number of microloan clients ten times (10x) above current levels (or ~ 10,000 customers).  Using existing staffing levels and through the implementation of its current strategic lending plan, Accion East seeks to triple (3x) the number of clients served within five years.  Greater growth can be achieved through the addition of program staffing. Over the five-year growth plan period, Accion East will disburse over 5,100 loans for approximately $53 million, creating and sustaining over 10,700 much needed jobs.

Program

Accion East’s microlending model includes three core elements: microloan products, financial capacity building & education services, and partnership outreach.  The organization’s central office, located in New York, NY, administers new product development, loan capital, credit policies, risk management, and loan servicing and maintenance. The central office supports the entire program staff (local sites), which operate out of Boston, New York, and Miami.  Local sites administer direct lending services, financial capacity building and education and perform local partner outreach and development.

Accion East’s microlending model is distinct for three reasons.  First, the organization pairs its microloan products with free, intensive financial capacity building and education services.  By investing this time in clients, Accion East ensures that clients receive the capital they need and that they understand the value of timely repayment and strong credit.  In addition, the capacity building coaching aims to strengthen the performance of the business itself.  Second, Accion East has the ability to reach underserved small business owners across the country with its proprietary, Internet lending platform.  The online loan application affords its clients the flexibility to apply at any time, twenty-four (24) hours a day, seven (7) days a week. Applicants have access to live customer service support (by phone or online chat) and they receive an immediate pre-approval response within minutes.  Third, Accion East forges strategic partnerships that open doors to industry-specific expertise, networking and other business development opportunities for its clients.  These benefits are shared through mentoring and coaching events facilitated by experienced entrepreneurs and corporate professionals.  These unique events ensure Accion East’s clients and their small businesses continue to prosper post-loan.      

 

 
  

  

Impact

We understand the impact of our work from our annual MicroTracker Client Outcomes Survey, conducted in partnership with the Aspen Institute.  Through a random sampling of clients, we conduct interviews to determine outcomes such as whether they are still in business, number of jobs created and/or saved and the business contributions to the household.

Based on our 2013 study, our clients report a 25% increase in take-home pay, leading to improved family situations. 85% of our clients report that their business improves or stabilizes their household. Importantly, we prepare our clients for long-term success: 97% of our clients are still open one year after receiving a microloan.

These businesses don’t just support the borrowers and their families. They also support employees. Accion businesses create or sustain an average of 4.3 jobs with each microloan. Importantly, these jobs pay $11/hr on average—52% more than federal minimum wage. By increasing employment opportunities for other community members, business owners directly support their local economies.

In March 2014, we learned that the jobs our clients support are quality jobs.  The Aspen Institute interviewed the employees of Accion clients to gain insights into the quality of jobs created by microbusinesses. The Aspen study, Microbusinesses, Gainful Jobs,  found that beyond earning stable wages, our clients’ employees had high levels of job satisfaction, citing features such as job security or flexibility, the opportunity to learn new skills, a supportive work environment, and a launchpad to the next stage of their lives. The study also revealed that the microenterprise industry opened the door to employment for populations who traditionally struggle to enter or re-enter the workforce: minorities, young adults with a high-school education, and seniors. 

Finally, the study found that an investment in microlending programs produces a 300% return—every dollar invested in program funds resulted in at least three dollars of increased earnings to workers and owners

Growth Plan

Accion East has a five year organizational growth plan (2013 – 2017) that outlines the potential increase in scale it can achieve across three measures, including: (i) number of entrepreneurs served; (ii) dollars disbursed; and (iii) self-sufficiency (which is a measure of how much its earned income covers its total expenses).  To implement its growth plan, Accion East requires a $2.5 million equity investment.  This investment will enable Accion East to raise an additional $12 million in third party loan capital needed to lend $53 million over the next five years.  
 
The goals for expansion as of January 1, 2014 are the following:
1.    Increase the number of entrepreneurs served per year from 981 in 2013 to 1,116 in 2017, a 14% growth;
 
2.    Grow from $8 million in loans disbursed in 2013 to $13.3 million in loans disbursed in 2017; and
 
3.    Increase the organization’s self-sufficiency from 25% in 2013 to over 50% in 2017.

Accion East has already created significant momentum in increasing its production through proven strategies.  These strategies and those to be implemented over the course of the five-year plan include:
 
1.    Focusing exclusively on high-performing referral partnerships and going deeper to increase qualified loan leads;
 
2.    Improving the end-to-end lending process to increase loans turn-around time;
 
3.    Increasing client referrals;
 
4.    Increasing lending to established businesses;
 
5.    Developing new products and services to increase earned revenue.
 

Location of Sites

National Office: 
80 Maiden Lane Suite 903
New York, NY 10038
Phone: (866)-245-0783
List of locations

To make a contribution to a program site:

  1. Click on the "Make a Contribution Now" button and include the name, city and state of the program you would like to support, in the "notes" text box on the organization's donation form, if available.
  2. If a "notes" or "designation" box is not available, write the city and state on your check in the "notes" section or call the national office to designate your contribution to a local program site.

Locations in the following states:

Florida

Illinois

Massachusetts

New York

Financials

Most Recent Budget

Year Ended:

2012

REVENUE

Corporate Grants: 
$3,005,000
Foundation Grants: 
$0
Government Funding: 
$0
Contributions from Individuals: 
$575,000
Special Events: 
$0
Program Services Fees: 
$604,027
Membership Dues: 
$0
Other Earned Income: 
$1,354,342
Other Revenue: 
$40,000
Other Revenue (Description): 
Interest and dividends, recoveries, debt forgiveness, service fee income
Total Revenue: 
$5,578,369

EXPENSES

Salaries, Related Salaries & Professional Fees: 
$3,690,491
Occupancy: 
$0
Travel & Entertainment: 
$81,207
Office Supplies, Printing, Postage: 
$649,825
Telephone & Communications: 
$0
Payments to Affiliates: 
$920,107
Other Expenses: 
$197,689
Other Expenses (Description): 

Lending expenses: interest and fees, loan loss provision; depreciation and amortization, training & recruiting, miscellaneous expenses.

Other Expenses (Description): 

Total Expenses: 
$5,539,319

NET GAIN/LOSS

Net Gain/Loss: 
$39,050

Prior Year Actuals

Year Ended:

2011

REVENUE

Corporate Grants: 
$3,500,000
Foundation Grants: 
$0
Government Funding: 
$0
Contributions from Individuals: 
$0
Program Services Fees: 
$578,447
Membership Dues: 
$0
Other Earned Income: 
$1,150,588
Other Revenue: 
$20,000
Other Revenue (Description): 
Other revenue includes: In-kind support, fee revenue from other products and services
Special Events: 
$0
Total Revenue: 
$5,249,035

EXPENSES

Salaries, Related Salaries & Professional Fees: 
$3,476,425
Occupancy: 
$0
Travel & Entertainment: 
$80,977
Office Supplies, Printing, Postage: 
$668,511
Telephone & Communication: 
$0
Payments to Affiliates: 
$1,322,720
Other Expenses: 
$58,017
Other Expenses (Description): 

Other expenses include: Interest and fees, depreciation and amortization, loan loss provision.

Office supplies, printing, postage, and telephone & communication expenses included in occupancy line item.

Total Expenses: 
$5,606,650

NET GAIN/LOSS

Net Gain / Loss: 
$-357,615

Major Funders

Bank of America Charitable Foundation

Barclays

Boston Beer Company

Boston Foundation

Citi Foundation

Clark Foundation

Community Development Financial

Institutions Fund

New York City Council

Robin Hood Foundation

Sam’s Club Giving Program

Tory Burch Foundation

U.S. Small Business Administration

Wells Fargo Foundation