mfa week 3 presentation combined
DESCRIPTION
Presentation slides for week 3 of the San Diego Microfinance 101 course at Point Loma Nazarene University. Presentations by International Rescue Committee, CDC Small Business Finance, and ACCION San DiegoTRANSCRIPT
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International Rescue CommitteeCenter for Financial Opportunity
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9,900,000 Refugees World Wide*
Europe1,733,700
N.Africa, C/SW Asia, Mid East3,811,800
*United States Committee for Refugees and Immigrants - December 31, 2006
Africa2,421,300Americas & the
Caribbean 1,035,900
East Asia and the Pacific 875,100
3,811,800
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US Refugee Program
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IRC Resettlement Services
Wide assortment of services
from arrival to attainment of
citizenship (up to five years)
Primarily for refugees--
expanding to serve asylees
and other immigrant
populations
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Resettlement Offices
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IRC San Diego
5348 University Avenue, San
Diego CA 92105
619-641-7510619-641-7510
Founded in 1975
Resettled > 20,000 refugees
Wide spectrum of programs
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60,192
74,65273,311
Refugee Arrivals 2007-2010
US
48,281
2007 2008 2009 2010
400
788
12941052
IRC/SD
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FY2010 Refugee Ethnic Breakdown
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IRC Center for Financial Opportunity
Financial Security
Bundled Services
Case Management
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IRC Center for Financial OpportunityMicroenterprise Development
Overview
“From Hardship to
Entrepreneurship”
- Microenterprise vs. Microfinance
- Funding
-Common businesses
- Why is there a need?
Entrepreneurship”
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IRC Center for Financial Opportunity
Microenterprise Development: Client Characteristics
- 47% Men, 53% Women
- Regions: East Africa(50%), Iraq and Middle East (30%), Other (20%)Middle East (30%), Other (20%)
- In US less than 5 years: 58%
- Low-Income: 90%
- Previous Biz Experience: 40%
-CA Minimum Wage: $8/hour
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IRC Center for Financial OpportunityIssues and Challenges for Refugee
Entrepreneurs:
• Access to Capital
• Access to Technical Assistance• Access to Technical Assistance
• Access to Additional Services
• Ongoing Support
• Linguistically and Culturally Appropriate
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IRC Center for Financial Opportunity
Microenterprise Development
Loans
- Character-based- Character-based
- Maximum Loan: $15,000
- Average Loan size: $7,500
- Loans made per year: 15 to 25
- Default Rate: 5%
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IRC Center for Financial Opportunity
Microenterprise Development
Technical Assistance
-Advising and Consulting
-Business Planning
-Marketing
-Licensing and Permitting
-Bookkeeping
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IRC Center for Financial Opportunity
Microenterprise and Financial Education: Credit Building
Program
-Credit Building loans $100 and $300-Credit Building loans $100 and $300-Average Score at Program Entry: NA-Average Score after 6 Months: 642
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IRC Center for Financial Opportunity
Example
Said from Somalia
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IRC Center for Financial Opportunity
ExampleSameer from Iraq
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International Rescue CommitteeCenter for Financial Opportunity
www.theIRC.org
Joel Chrisco, Program [email protected] Ext. 247
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ACCION San DiegoLending. Supporting. Inspiring.
Joe and Vi Jacobs Center
404 Euclid Avenue Ste. 271San Diego, CA 92114San Diego, CA 92114
T: (619) 795-7250T: (800) 967-4429F: (619) 795-7260
www.accionsandiego.org
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ACCION’s History
•ACCION San Diego is an affiliate of ACCION International, an organization that began lending in Latin America in 1961
•ACCION USA began a pilot program in New York •ACCION USA began a pilot program in New York in 1991
•ACCION San Diego office opened in 1994
•Now located in 9 U.S. states
•Each office is privately owned, funded & operated
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Services We Provide
• Small business loans up to $35,000
• Build or re-build positive credit history
• Help transition clients to banks
• Technical assistance
• Referrals to other business services
• Publicity/networking opportunities
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Where does ACCION get its money?
• Private donations
• Grants from foundations• Grants from foundations
• Grants or low-interest loans from banks
• City and government funds
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Our Eligibility Requirements
• Live/work in San Diego County
• Six months of business history or previous experience in the industry for start-ups
• Income/expense documentation• Income/expense documentation
• Capacity to make payments
• Reasonable credit report
• Collateral and/or co-signer may be required dependent upon level of risk
• Character
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How Much Will the Loan Cost?
• Interest rate starts at 12% APR
• Administrative fees (charged only at disbursal):
•<$5,000: $75 maximum•<$5,000: $75 maximum
•>$5,000: 4% -6% of loan amount depending on loan is security.
• $10-$25 minimum fees for securing interest in collateral
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Timelines
How long will it take to get financing?
• 48 hours for quick loans $300-$2,000
•2 weeks for loans $2,001 to $35,000
How long will I have to pay back the loan?
• Depends on size of the loan
• Typically 12-60 months
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Next Steps
• Obtain application by mail, email or fax or on our website: www.accionsandiego.orgon our website: www.accionsandiego.org
• Compile and submit supporting documentation for loan request
• Loan Officer will call to schedule site visit
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Additional Resources
• SCORE
– (619) 557-7272
• Small Business Development Center
– (619) 482-6391 or (760) 795-8735 (N. County)– (619) 482-6391 or (760) 795-8735 (N. County)
• Consumer Credit Counseling
– 1-866-889-9347
• Credit Agencies
– Experian 1-800-311-4769
– Equifax 1-800-685-1111
– Trans Union 1-800-916-8800
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Questions?
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In uncertain times, be certain about your lending partnerIn uncertain times, be certain about your lending partner
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Small Business Loans
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CDC Small Business Finance
background and roles
� CDC’s are financial intermediaries certified by the SBA to administer SBA 504 loans (commercial real estate loans), and other alternative loan products.
� CDC roles: direct lending, loan intermediary, loan packaging,
� CDC roles: direct lending, loan intermediary, loan packaging,
� Creative financing: partnering with other lenders to complete request, loan guarantees
� Statistics (loan volume, conversion ratio, default rate, interest rates)
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Loan Evaluation
�What is underwriting???
�How do you decide who to finance?
�Areas of Evaluation (credit, cash flow, �Areas of Evaluation (credit, cash flow, collateral, experience, capital, character, business plan, co-signer, economic conditions)
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Credit
� Credit
� www.annualcreditreport.com
� Know what is on your credit and make sure it’s all accurateaccurate
� Scores
� History
� How to establish good credit
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Capacity� Historical profits of business as reported on tax
returns.
� Projections.
� Outside sources of income: other employment, � Outside sources of income: other employment, spousal income, military, disability, retirement, rental income, alimony, child support, etc.)
� Personal Liquidity.
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Capital
� Capital
� Owner’s injection
� Equity
� Balance sheet (retained earnings or equity)� Balance sheet (retained earnings or equity)
� Equity requirements for existing businesses.
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Collateral� What is collateral?
� How important is it?
� What if you don’t have collateral?
Business and Personal Assets.� Business and Personal Assets.
� How much equity do you have in your home?
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Experience� How much experience do you need for a start up
business?
� What is your background?
� What if you have no experience in the industry you are � What if you have no experience in the industry you are starting your business in?
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Character� Character
� business history
� credit reports
� personal interview� personal interview
� responsiveness
� references
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Business Plan� What to include in a business plan.
� How important is a business plan?
� Projections
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Conditions� How does the economy affect your industry?
� How recession proof is your business?
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Co-Signer� To mitigate weaknesses in other areas, you can bring a
co-signer on board to guarantee the loan.
� Requirements of a co-signer…stable income, good credit, possibly personal assets to secure loan. credit, possibly personal assets to secure loan.
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Success Story: San Diego
United Sports Center
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Creative PartneringWorld Famous Dog Wash
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Contact Information
Susan LampingSenior Community Loan Officer
Main line: (619) 291-3594 ext. 8639 Direct line: (619) 243-8639 Direct line: (619) 243-8639
CDC Small Business Finance2448 Historic Decatur Road, Suite #200
San Diego, CA 92106