As you start your business development journey it can be important to collect relevant funds to run the business. In this article, we will be discussing the Accion Business Loan Funds. We would also be talking about the cost of business loans from Accion.
What is accion
Accion is a not for profit company that began as a grassroots organization in 1961. Initially, the organization specialized only in offering financial education and micro-loans to small low-income communities worldwide.
Since then, the organization has continued its mission to improve local communities. By lending capital to startups and small business owners that may not qualify for other significant investment opportunities.
Accion: Cost of Business Loans from accion
Accion offers small business loans for various purposes focusing on foreign-born, minority and women business owners or entrepreneurs. In 1991, the organization started lending loans in the United States. The company’s segment rebranded itself to the Accion Opportunity Fund in 2020, restructuring the program in the process.
Accion’s Annual Percentage Rate can be generally high, with rates ranging between 5.99% and 25.99% for most loans. However, this is an improvement from previous rates. At the same time, the prices can get a little high compared to central bank loans.
There is no prepayment penalty, but additional fees may apply, such as closing costs and processing fees. 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 an excellent option for startups, minority-owned businesses, and businesses. Companies with low credit may not qualify for other lending options. The lender’s commitment to financially empowering and educating people makes it hard not to like Accion.
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Types of business loans by Accion
Accion offers various loan types. The best loan for a certain kind of business will depend on future goals for the loan, the kind of business one runs, financial situation, and more. It’s best to understand what type of loan products are available and how a lender can fulfil your financing needs.
Depending on the type of loan an individual is applying for and the lender they are using with, there are different requirements one must fulfil to be approved. Traditional loans from banks or credit unions and loans guaranteed by the SBA generally have stricter standards.
At the same time, online lenders may offer greater flexibility. However, all lenders typically consider several factors, including credit scores, business history, financial status, debt, etc.
Common types of loans offered by Accion
- Term Loan
- Small Business Loan
- Micro Financing
- Installment Loans
- Women-owned business loans
- Veteran-owned business loans
- Startup business loans
- Small business equipment 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 offers instalment loans (also commonly referred to as term loans) for many business purposes. Instalment loans help the borrower to get a lump sum amount of cash in one go. The borrower then has to repay the amount borrowed, called the principal, plus interest over a timeframe called the term.
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Cost Associated with the loans
Accion offers fixed-rate annual term loans that go up to $1 million for small businesses in the United States, excluding Vermont. It has delivered more than 60,000 loans to small-business owners, more than $500 million.
The main aim of Accion is to simplify the borrowing process for small business owners. Accion Opportunity Fund looks at your viability as a business overall, increasing your chances of obtaining funding.
Depending on your credit and financial standing, if you apply and are approved, your business will enjoy:
- Loans with fair and transparent terms
- Fixed rates from 5.99% to 14.99%
- No prepayment penalties
- Loan amounts ranging from $5,000 to $100,000
Accion loan takes regular instalments. You can pay online, by phone, or set up direct payments with supported banks. If you know the rates you qualify for and the amount of money you need, you can estimate your costs with an instalment loan calculator. Since Accion offers instalment loans, you can save money on interest by paying off your loan early. There is no prepayment penalty.
If you are a small business owner and are looking to get business loans, we highly recommend Accion.