Starting a new business can be hard, especially when you need a small business loan to get it going. Many small businesses have trouble finding loans. Accion is a nonprofit lender that helps small business owners, especially those with low to moderate income, get the financing they need. This review will explain how Accion works, the benefits of its loans, and how it helps small businesses grow. Let’s dive in to see if Accion Start Up Loans could be a good choice for your business in 2024!
What is Accion?
Accion is a nonprofit lender that provides business loans to help small business owners. Unlike traditional lenders, Accion focuses on supporting communities that might not have easy access to business loans. They offer flexible loan requirements and support for those who need it most, like women, people of color, and low to moderate-income entrepreneurs. Having a business bank account can simplify the loan approval process, as certain lenders, including Accion, can connect directly to it for quicker decision-making.
With Accion, small businesses get more than just money—they also receive advice and educational resources to help them succeed. This is great for small business owners who want guidance as they grow.
Accion Business Loans: Features and Benefits
Accion offers fixed-rate term loans to small businesses across the United States, except in certain states like South Dakota and North Dakota. Here are some key features and benefits of Accion business loans:
Best for large business loans
- 3 Months in Business
- $10,000 in Monthly Rev
- Minimum Credit Score 550
4.9
Best for large business loans
- up to $1.5 million
- APR range Not disclosed
- Minimum Credit Score 570
4.7
Best for Small business loans
- Apply in Minutes
- No Hidden fees
- Wide range of Options to choose from
- Get funded in as little as 24 hours*
4.8
- Real-time pre-approvals for those who qualify
- Time in business: 6+ months
- Average repayment terms by loan product
4
- Loan Amounts: You can borrow from $5,000 to $250,000.
- Interest Rates: Rates start at 8.49% (simple interest).
- Origination Fee: Accion charges a fee of 3% to 5% when you take out a loan. This is known as the “origination fee.”
- No Prepayment Penalty: If you want to pay off the loan early, you won’t have to pay any extra fees.
- Flexible Repayment Terms: Accion offers repayment terms that can be adjusted based on your needs.
- Educational Resources: Accion provides a library of resources like articles, videos, and interactive lessons to help you manage your business better.
These features make Accion a great option for startups and small businesses looking for flexible loan options and support.
How to Qualify for an Accion Business Loan
Accion has flexible requirements, so more people can qualify. Here’s what you need to know about qualifying for an Accion loan:
- Minimum Credit Score: You’ll need a personal credit score of at least 575.
- Revenue Requirements: Accion doesn’t have strict revenue requirements, so even if your business isn’t making a lot yet, you can still apply.
- Time in Business: You don’t need to be in business for a specific amount of time to apply. This is great for brand-new businesses!
- Other Factors: Accion considers more than just your credit score when deciding on your loan. They also look at your business financials, tax returns, and other documentation.
This flexible approach makes it easier for new and underrepresented business owners to access loans through Accion.
Application Process
Applying for an Accion loan is simple and can be done in just a few steps. Here’s what to expect:
- Online Application: Start by filling out a short application online or over the phone. It takes about 10-20 minutes.
- Soft Credit Pull: Accion will perform a “soft pull” on your credit to see if you’re prequalified. This doesn’t affect your credit score.
- Review: Accion reviews your application, which can take 1 to 3 business days.
- Consultation: You’ll talk with a loan expert to discuss your business needs and create a full loan application.
- Submit Documents: After you talk to a loan expert, you’ll need to submit financial documents like tax returns and bank statements.
The entire process is designed to be smooth and supportive, with help from Accion’s team of experts.
Related: How to Get a Big Business Loan: Tips and Tricks
Customer Reviews and Reputation
Accion has received mixed feedback from its customers. On Trustpilot, Accion holds a rating of 3.2 out of 5 stars from one customer review. Accion is not accredited by the Better Business Bureau (BBB) and has a D- rating. However, Accion has a long history of serving diverse small business owners for over 25 years. This shows they are committed to helping underserved communities even if their online ratings aren’t the highest.
How Accion Compares to Other Business Loans
Accion has both strengths and limitations compared to other lenders. Here’s how Accion stands out:
- Affordable Interest Rates: Accion offers competitive rates compared to other small business lenders, which can help keep loan costs down.
- Loan Limits: Accion’s loan amounts might be smaller than those offered by banks or online lenders, but they are designed to help underserved communities.
- Support and Resources: Accion’s educational resources are a big plus, offering advice on managing loans, marketing, and more.
Accion’s loans are good for small businesses, especially if you’re looking for a nonprofit lender that cares about its clients.
Interest Rates and Fees
Accion Opportunity Fund offers competitive interest rates and fees for its small business loans, making it an attractive option for small business owners. The interest rates range from 8.49% to 18.99% APR, with the lowest rates available to borrowers who have stronger credit and financials. This range ensures that even those with less-than-perfect credit can still access necessary funding.
In addition to the interest rate, Accion charges an origination fee of 3% to 5% of the loan amount. This fee is deducted from the loan proceeds at the time of funding, ensuring transparency and no hidden costs. It’s essential to note that Accion’s interest rates and fees are designed to be more affordable for small business owners, especially those from underrepresented communities. The lender’s goal is to provide access to capital while minimizing the financial burden on borrowers.
Related: Startup Business Loans for Bad Credit Guaranteed
Loan Terms and Conditions
Accion Opportunity Fund offers flexible loan terms to accommodate the diverse needs of small business owners. The loan terms range from 12 to 60 months, allowing borrowers to choose a repayment period that best fits their cash flow and business model. This flexibility ensures that businesses can manage their repayments without undue stress.
The loan amounts range from $5,000 to $250,000, making it an attractive option for businesses with varying capital requirements. Whether you need a smaller loan to cover immediate expenses or a larger amount for significant investments, Accion has options to suit your needs.
Accion’s loan terms and conditions are designed to be transparent and borrower-friendly. The lender provides a clear loan agreement that outlines the terms and conditions of the loan, including the interest rate, repayment schedule, and any fees associated with the loan. This transparency helps small business owners understand their commitments and plan accordingly.
Best for large business loans
- 3 Months in Business
- $10,000 in Monthly Rev
- Minimum Credit Score 550
4.9
Best for large business loans
- up to $1.5 million
- APR range Not disclosed
- Minimum Credit Score 570
4.7
Best for Small business loans
- Apply in Minutes
- No Hidden fees
- Wide range of Options to choose from
- Get funded in as little as 24 hours*
4.8
- Real-time pre-approvals for those who qualify
- Time in business: 6+ months
- Average repayment terms by loan product
4
Support and Resources for Borrowers
Accion Opportunity Fund is committed to supporting small business owners throughout the loan process and beyond. The lender offers a range of resources and tools to help borrowers manage their finances, grow their business, and achieve long-term success.
Some of the support and resources available to Accion borrowers include:
- Personalized Loan Help: Guidance from experienced loan specialists who understand the unique challenges of small businesses.
- Business Education and Training Programs: Access to workshops, webinars, and courses designed to enhance business skills and knowledge.
- Networking Opportunities: Connections to a network of small business owners and entrepreneurs, fostering a community of support and collaboration.
- Ongoing Support and Monitoring: Regular check-ins to ensure borrowers are on track to meet their financial goals and to provide additional assistance as needed.
Accion’s commitment to supporting small business owners is reflected in its nonprofit mission and its dedication to providing affordable and accessible capital to underrepresented communities. By offering a range of resources and tools, Accion helps borrowers build a strong foundation for their business and achieve long-term success.
What credit score do you need for Accion start up loans?
Typically the lender will examine your own FICO score based upon your personal score. In this case you should generally have 660 or above depending upon the type of lending or the lenders.
What is the maximum amount you can borrow from Accion?
Accion Opportunity Fund Loan Options provide a range of funding possibilities for small businesses, with loan amounts starting at $5,000 and going up to $25,000.
These loans are designed to cater to the diverse needs of small business owners, offering financial support that can be crucial for startups or businesses looking to expand. With a focus on underserved communities, Accion’s loan options are particularly beneficial for women, people of color, and entrepreneurs with low to moderate income.
By offering these flexible loan amounts, Accion helps small businesses access the capital they need to thrive and grow in today’s competitive market. Whether you need funds for working capital, equipment purchases, or business development, Accion’s loan options can provide the necessary financial boost.
As of February 22, 2024, these loans continue to be a reliable choice for small businesses seeking supportive and accessible financing solutions.
Using Accion Business Loans for Business Growth
Accion business loans are flexible and can be used for various business needs:
- Working Capital: Use the loan to cover daily expenses and keep your business running smoothly.
- Equipment Purchases: Buy or upgrade equipment necessary for your business.
- Growth and Development: Get the funds you need to expand or improve your business operations.
By using Accion loans, small businesses can gain access to funding that helps them grow without having to rely on traditional banks.
Time to Receive Funds
Accion does not specify the exact time frame for receiving funds after loan approval, but the process is designed to be efficient. Once you submit your application, Accion conducts a prequalification check through a soft credit pull, which does not affect your credit score.
After prequalification, you’ll engage in a consultation with a loan expert to discuss your business needs and finalize your application. Subsequently, you will need to provide necessary documentation, such as bank statements and tax returns, for verification. The time to receive funds can vary based on the complexity of your application and the promptness of your document submission.
Generally, once everything is in order, you can expect to receive the funds within a few business days. This relatively quick turnaround is beneficial for small business owners who need timely access to capital.
Borrower Requirements
Accion is known for its flexible borrower requirements, making it accessible to a wide range of entrepreneurs. Unlike traditional lenders that focus heavily on credit scores, Accion evaluates a comprehensive set of criteria. While a minimum credit score of 575 is required, Accion also considers other factors such as your business’s financials, annual revenue, and personal finance situation.
This inclusive approach allows borrowers with varied financial backgrounds to qualify. However, borrowers with higher credit scores and a solid business history may benefit from more favorable interest rate options and loan terms. This flexibility makes Accion an appealing choice for small business owners, especially those from underserved communities, who may find it challenging to secure loans from conventional sources.
Credit Reporting
An important aspect of Accion’s business loans is their impact on your credit profile. Accion reports your payment history to major credit bureaus, which means that consistent, on-time payments can positively influence your credit score over time. For small business owners and entrepreneurs looking to build or repair their credit, this is a valuable opportunity.
By maintaining a good repayment record, you not only gain access to the funds necessary for your business but also enhance your creditworthiness for future financing needs. This dual benefit of immediate financial support and long-term credit improvement makes Accion loans an attractive option for those looking to strengthen their financial standing while growing their business.
Frequently Asked Questions
Does Accion have a minimum credit score?
Yes, Accion requires a minimum credit score of 575 to qualify for their business loans. This flexible credit requirement helps more small business owners, especially those with low to moderate income, access financing.
What do you need to qualify for Accion?
To qualify for an Accion business loan, you need to meet several criteria beyond just your credit score. These include providing business financials, tax returns, and other documentation. Accion also considers factors like your business’s potential and your personal finance situation. This comprehensive approach allows more diverse entrepreneurs to qualify for funding.
What is the maximum amount you can borrow from Accion?
Accion offers business loans ranging from $5,000 to $250,000. This range caters to various business needs, whether you’re looking to cover working capital, purchase equipment, or expand your business operations.
What credit score do you need for a startup loan?
For a startup loan with Accion, a minimum credit score of 575 is required. This relatively low threshold makes it accessible for new business owners who might not have an extensive credit history. Accion’s approach focuses on more than just your credit score, considering other factors to provide opportunities for startups to secure financing.
