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Wednesday, May 29, 2024

Growing a CDFI to Help Small Business in a Time of Need

FINANCE: Javier Islas Avoided ‘Burning Out’ By Signing on to Accessity’s Mission

Javier Islas, Chief Financial Officer of Accessity, was honored as CFO of the Year in the Business Nonprofit category. He leads the finance and accounting department at Accessity, a nonprofit Community Development Financial Institution (CDFI) that provides small business loans of up to $100,000 to underserved and diverse entrepreneurs in Southern California.

It is because of Accessity’s mission and values that Islas become its CFO in 2010.

“I came to Accessity after having got burned out after years of CFO work,” he said. “But when I learned about this organization, I was really sold on their work.”

Islas finding his passion for CFO work again — bringing over 35 years of finance, auditing and accounting experience to Accessity — was a boon not only for the local CDFI, but for the community of business as well.

With previous experience as a government auditor, Islas said his “ears went up” when he learned that Accessity had access to federal funding, which the organization had not explored before.

“So in the short time it took me to learn this business, I was able to see that this was the area we need to go to grow,” he said, adding that when he started at Accessity, the lender was providing around $1 million worth of loans each year, impacting 50 to 100 businesses.

From that point to today, Accessity has increased its lending tenfold, as well as the number of businesses it helps, which are mostly “family-owned companies with two to five employees and less than $2 million in revenue,” he said.

Last year was an exceptional year of growth in the lending portfolio for Accessity, seeing an 18% increase in dollars lent — more than $9 million — and expansion into Los Angeles and Orange counties. Since Islas joined Accessity, the organization’s total assets grew by 454%, deploying $55.3 million in loans and reaching $21 million in total assets and nearly $13.6 million in unrestricted net assets by the end of 2021.

Positioned for Pandemic

Because of the growth Islas brought to Accessity, the lender found itself in a uniquely beneficial position to help out its portfolio of small business owners when they needed that help the most.

“We were a growing organization and had a balance sheet that was so strong that we were able to provide more than 60% of the existing portfolio with a six-month no-payment deferment,” he said. “Not every organization could do that, but we could, so we said ‘Yeah, that’s what we’re going to do.’”

And for businesses needing new capital during the pandemic, Accessity partnered with San Diego County to strengthen its lending capital and within 12 months of the pandemic, lent the most it had ever lent before.

Islas said Accessity was able to pull off its growth during the pandemic by streamlining and accelerating improvements  to its technology systems.

“We became a fintech without really trying – we had to during the pandemic,” he said, adding that Accessity is now “super-efficient” at capital deployment and taking collections.

Islas is quick to point out that while Accessity is streamlined like a fintech, it differs from one because of the personalized service it offers its borrowers.

“We actually talk to each individual in our portfolio,” he said. “We learn their business. We help them with not only capital but other resources that we identify. And because of that, we have single digit delinquency.”

Respected Leader

Islas’ experience and knowledge of the financial industry has made him an important resource to Accessity. He is known for his regular updates to staff that include graphs, charts and clear language in helping staff understand complicated financial concepts.

Last year, Islas’ accounting department team of four rated him high in a 360 review. His team noted his calm demeanor, encouraging leadership style and open communication which allow for them to grow professionally and seek leadership opportunities.

In addition to managing the Accessity accounting department team, Islas also manages the yearly audit done by an outside agency, ensuring Accessity complies with all the certifications required as a CDFI.

Islas is also currently working on his certified financial planner license with a focus on investments so that he can better support the organization and its staff. He plans to be able to share information with the team on investment opportunities and skills as he leads many of the organization’s human resources needs, including benefits deployment. He is also the primary contact on all the risk mitigation management for the organization.

After receiving his award, Islas took some time to answer a few questions from the San Diego Business Journal.

Q: At what stage in your life did you set your sights on the CFO’s office?

A: Transitioning from public accounting to general ledger accounting was the beginning of my journey to the CFO office. My previous role as an auditor allowed me to work with a diverse range of clients, from small nonprofits to government contractors and even Native American tribes. These experiences helped me gain valuable insights and perspective, guiding me towards a successful career as a CFO at Accessity, where we primarily work with low- to moderate-income and diverse-owned small businesses in Southern California.

Q: What put you on the path to getting there?

A: Networking and continuing education have been vital to my career growth. I’ve had the privilege of connecting with several impressive women CEOs, board members and leaders who have provided me with job opportunities and guided me through the professional development process. I’m incredibly grateful to Accessity CEO Elizabeth Schott, whose vision guides and drives our organization to grow and succeed, and our board and finance committee chair, Gordon Boerner of US Bank, and vice chair Mark Emch, previously of the San Diego Convention Center. Their leadership, collaboration and commitment to our mission has enabled us to overcome challenges and grow year after year.

Q: Think back over your career. Up to this point, what is the accomplishment you are most proud of?

A: I’m most proud of the impact we made in helping small businesses during the pandemic. Because the organization was already in a strong financial position before the pandemic, the leadership team and board of directors could support our clients by deferring their loan payments for up to six months for 60% of our portfolio. In addition, we deployed over $10 million of new loans to small businesses in the Southern California community with very low interest rates and deferred first payments. These local businesses have continued to operate, keep their workers and make regular loan payments.

Q: Of all the economics and business issues in the news right now, what are you following with most interest and why?

A: In the macro business environment, I’m closely following the rising inflation and the looming recession. These two factors can have an extended negative impact on our small business communities.

Q: Which one most directly affects your organization?

A: Inflation has had a significant impact on the small business communities we serve. In addition to higher prices for goods and services, our clients feel the ripple effects, such as reduced purchasing power and wage increases, primarily since they operate in a high-cost-of-living area like Southern California. These factors can make it challenging for small businesses to grow and expand. At Accessity, we work closely with our clients to provide technical assistance through partners like the Small Business Development Center and SCORE to help them prepare and plan for the ever-changing business environment.

Q: How big is your team?

A: The Accessity team is over 30 employees, with about two-thirds based in San Diego and the rest throughout our regional footprint. Our accounting and finance team includes five cross-trained and highly efficient employees in all general, administrative and lending operations processes. Our daily collaborative approach allows us to pivot quickly and service our active portfolio of more than $17 million.

Q: How difficult is it to hire qualified team members in this employment environment?

A: Finding qualified accounting professionals in the nonprofit space can be challenging. We look for candidates with a passion for small business, experience in the lending and financial industries, and a background in deploying various grant programs. Fortunately, at Accessity, turnover has been very low. This is due to the mission-oriented culture and competitive benefit offerings that make our organization a great place to work. We also frequently survey our staff to see where the organization can improve and how to meet our teams’ needs best.

Q: What is the next big step your company hopes to take?

A: The next step for us to is to increase impact in the community by reaching more small businesses, particularly those of low-to-moderate income and that are diverse-owned with access to capital and education in our recently expanded six-county Southern California territory. We are also focused on working closely with community partners and other service providers to offer value-added training and programs that support long-term success for our clients, like our Sam Adams Brewing the American Dream Program, our startup Academia program with Eva Longoria Foundation, and education through the San Diego Employers Association.

Q: If appropriate, tell me what challenges you face in getting there.

A: One of the key challenges in getting there is educating small business owners on the resources available to them in the community, so we look forward to working with many corporate, philanthropic, government and community partners to reach them through various communication avenues, languages and outreach.

One of our core values is integrity and building trust, which is essential in communities that have been disenfranchised. We work to understand their needs and how Accessity can meet them in their business journey.


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