Accion Opportunity Fund Small Business Loans Review
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Accion
| Total Rating | 5.0 |
|---|---|
| Terms & Fees | Excellent |
| Application Process | Excellent |
| Sales & Advertising Transparency | Excellent |
| Customer Service & Technical Support | Excellent |
| Reviews, Complaints, & Testimonials | Excellent |
Pros
- Borrower qualifications are lower than going through banks
- Monthly repayments
- No prepayment penalty
- The application process is fast and easy
- Customer service is helpful
Cons
- Rates can be expensive
- Some additional fees charged
Accion Overview
Accion is a nonprofit company that began as a grassroots organization back in 1961. Initially, the organization specialized in offering microloans and financial education to low-income communities across the globe. Since then, Accion has continued its mission to improve local communities by lending capital to startups and other businesses that may not qualify for other lending options.
In 1991, Accion began offering loans in the US. This segment of the company rebranded to the Accion Opportunity Fund in 2020, restructuring the program in the process. This review covers that branch only.
Accion offers small business loans for a variety of purposes with a focus on women, minority, and foreign-born business owners.
Accion’s APR can potentially be a bit high, with rates between 5.99% and 25.99% for most loans, though this is an improvement from previous rates. There is no prepayment penalty, but other fees, such as closing costs and processing fees, may apply. While the fees can get a little high in comparison to bank loans, these rates are comparable to those of other lenders in the alternative lending space. Naturally, the specific rates given to you will depend on your creditworthiness, the strength of your application, and other factors.
Accion’s low borrower requirements make it a great option for startups, minority-owned businesses, and businesses with low credit that may not qualify for other lending options. The lender’s commitment to financially empowering and educating people makes it hard to not like Accion.
To learn more about this lender, read on!
Table of Contents
Services Offered By Accion
Accion offers installment loans (also commonly referred to as term loans) for many business purposes. Installment loans provide the borrower with a lump sum of cash. The borrower then pays back the amount borrowed, called the principal, plus interest over a timeframe called the term.
Accion specializes in lending to businesses in the following categories:
- Women-owned business loans
- Veteran-owned business loans
- Startup business loans
- Small business loans
- Salon and spa loans
- Restaurant and food industry loans
- Native American business loans
- Minority-owned business loans
- Loans for childcare businesses
- Green business loans
- Food and beverage business loans
- Business loans for people with disabilities
- SBA loans
Accion Borrower Qualifications
Borrower qualifications vary by state. Visit Accion’s site to learn your specific state’s requirements. Here are the general requirements you most likely will need to meet to qualify for an Accion loan:
| Time In Business: | 12 months |
| Credit Score: | Varies (low scores are accepted) |
| Revenue: | $50,000/yr |
In addition, you must be over 18 and own at least 20% of the business.
Loans are not available in the following states: MT, ND, SD, TN, VT or Washington, D.C. Additionally, the following states have higher minimum borrowing amounts than what’s listed below: AK, CT, KY, MD, MN, NH, NC, OR. And finally, the following states have restrictions on the types of businesses that can apply (in most cases this means some kind of formal incorporation, LLCs, LLPs, etc.): DE, MN, NE, NJ, NY
Accion Terms & Fees
Accion loans vary according to business type and location. Loans will have APRs between 5.99% and 25.99%, which may include fees such as processing fees or closing costs.
Here are the most common terms and fees for Accion’s small business loans to give you an idea of Accion’s rates:
| Borrowing Amount: | $5-$1o0K |
| Term Length: | 12, 24, 36, 0r 60 months |
| Factor Rate/Interest Rate: | Fixed 5.99% – 25.99% APR |
| Origination Fee: | 3%-5% |
| Collateral: | Personal guarantee; assets in some situations |
Accion loans are paid in regular installments. You can pay online, over the phone, or set up direct payments with supported banks. If you know the rates that you qualify for and the amount of money you need, you can estimate your payments with our installment loan calculator. Since Accion offers installment loans, you can save money on interest by paying off your loan early. There is no prepayment penalty.
Application Process
Accion partners with Lending Club for its application infrastructure. To apply for an Accion loan, you can fill out an initial application online or over the phone. The Accion application takes about 15 minutes. Accion will let you know whether you’re approved to continue with the process in a couple of days.
If you are given the go-ahead, you’ll work one-on-one with an Accion representative to put together your application and the appropriate documents. The time it takes to complete the application will vary depending on the paperwork required and how long it takes to gather the necessary documents. Once your application is accepted, you’ll be given an offer with details regarding your loan’s term length and fees.
If Accion declines you, the lender will tell you what you need to do to improve your business and increase your chance of qualifying for a loan in the future.
Sales & Advertising Transparency
The Accion Opportunity Fund website is straightforward and easy to navigate, with a lot of information presented upfront. You will have a clear idea of the term and rates specific to your potential loan before you accept a loan offer. The company is also a signatory of the Borrower’s Bill of Rights, in which companies promise to be fair and transparent about lending practices. The one caveat here is that I actually had to pull some details about the loans from American Express, Accion Opportunity Fund’s partner. There’s no reason this information shouldn’t be on the Accion Opportunity Fund site.
Customer Service & Technical Support
Accion offers phone support and ample support resources. With educational articles, webinars, and videos, it really feels as though Accion wants its borrowers to succeed and understand their loans. The company even offers programs and mentoring.
While there are a small number of complaints from borrowers who had trouble getting in touch with representatives, the majority of customers seem incredibly happy with Accion’s support.
You can contact Accion through its website, by phone, or through its social media accounts on Twitter, Instagram, or YouTube.
Accion Reviews, Complaints, & Testimonials
Negative Reviews & Complaints
Aside from a few reviews on Yelp and elsewhere around the web, there are a very limited number of customer reviews of Accion. Here are the few complaints we came across about this lender:
- Issues Being Approved: A couple of people expressed frustration that their applications were not approved.
- Poor Communication: A few borrowers expressed difficulty getting in touch with Accion support, and one complained that they didn’t receive calls back when they were expecting them.
- Too Invasive: One person complained that Accion asks for an uncomfortable amount of personal information. They found it to be an invasion of privacy.
Positive Reviews & Testimonials
Accion features a collection of client testimonials on its website. You can also find a number of stories about merchants and organizations it has helped in the news.
Here are some of the things borrowers love most about Accion:
- Good Customer Support: Customers generally appreciated the information and service they received from Accion.
- Improved Rates: Accion’s rates have come down since we last reviewed them.
- Doesn’t Require An Excellent Credit Score: Even in the more restrictive states, you can get funding with less than a 600 credit rating.
Final Verdict
There’s good and bad news about Accion’s restructuring of their stateside lending program into the Accion Opportunity Fund. The good news is that Accion’s rates have improved and their credit requirements have loosened. The bad news is maximum borrowing amounts are down. This may not matter much for most of the smaller businesses Accion is targeting, but businesses that need more will likely have to look for additional lending sources. While Accion still offers coaching and mentoring, we notice that they now require 12 months in business from borrowers, which means startups may no longer be able to qualify for these loans.
Accion is a good option for businesses with low credit scores that may not qualify for other loan options. In particular, veterans, minorities, and women may find themselves well-served by Accion’s programs.
Chris Motola
Finance Writer at Merchant Maverick
Chris Motola is a writer, programmer, game designer, and product of NY. These days he's mostly writing about financial products, but in a past life he wrote about health care and business. He's a graduate of the University of Central Florida.
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I am looking at buying a once very established business that closed due to death in the family. It is a great opportunity. Its a convenient store with a kitchen in back and its on the lake they have minnow boxes and I want to do food and have a one place stop for the people on the lake and in the woods .
This comment refers to an earlier version of this review and may be outdated.