Eleven years ago, Gail Brent’s dream of starting her own acupuncture and massage business nearly faltered for the same reasons that hold true today.
Back then, as a 45-year-old single mother with tarnished credit and student loans acquired for her master’s degree as an acupuncturist, her case presented a nightmare for traditional lenders.
A friend referred Brent to Accion San Diego, a nonprofit that provides entrepreneurs turned down by traditional lenders with loans ranging from $300 to $35,000. Accion granted Brent a $5,000 loan, enough to buy equipment, print business cards and brochures, and open Health and Vision Acupuncture and Massage Center in Bay Park.
Today, Brent still turns to Accion for funding. She plans to use her most recent $10,000 loan to expand her business and Web site, but declined to give terms of the loan agreement. Her new goal: Open a second massage center in town.
To get there, she also plans to sharpen her marketing skills with a 12-week training program offered by the Women’s Business Center of California, a nonprofit that works closely with Accion to help would-be business owners get started.
“They help our clients with writing a business plan or how to build a Web site,” said Accion’s Director of Operations Elizabeth Makee.
Counsel And Training
The WBCC, which operates within the investment group Pacific Advisors in Old Town, offers existing as well as aspiring business owners counseling, workshops and a 12-week training program.
Like Accion, the WBCC relies heavily on corporate sponsorships and grants, said Michelle Butler, the group’s president and CEO. Corporate sponsors include USA Federal Credit Union, San Diego Gas & Electric, Pacific Advisors and Citibank. The city of San Diego Small Business Enhancement Program and U.S. Department of Labor provide grants, Butler said.
Butler spun out the WBCC in September 2006 from National University, where she was hired as the program’s director to ensure the program’s survival. After two years of organizational restructuring, creating a new board of directors and operating on a lean budget , $170,000 for the last two fiscal years , Butler says the organization is poised to receive more funds to support expansion.
For this fiscal year ending Sept. 30, 2009, Butler projects the budget to rise to $335,000, thanks to a $150,000 injection from DLM Capital Investors, a local investment firm where Butler is chief operating officer.
Butler’s goal for 2009: Offer a 12-week core training program “First Step Fast Trac” three times in the English language and twice for Spanish speakers. The three-hour evening classes are held once a week. Entrepreneurs learn a variety of skills, including how to market their business, give presentations, manage cash flow and analyze markets. The cost for each 12-week session is $150.
Butler also plans to expand the existing Friday luncheon seminars with occasional Saturday morning and weekday evening meetings.
Accion’s Makee and lending director Robert Lopez take pride in funding aspiring entrepreneurs who lack collateral or financials, have bad credit or lack a credit history.
Since its inception in 1994, Accion San Diego, one of eight independent offices nationwide, has provided more than 2,300 loans totaling $12 million to more than 1,400 entrepreneurs.
Accion relies on sponsors for funding. About 65 percent comes from banking partners such as San Diego National Bank, Wells Fargo and Bank of America; 26 percent from the city of San Diego; 7 percent from foundations; and 2 percent from individuals.
Accion has two basic products: “Quick Loans,” which range from $300 to $2,000 and require a one-page application with a 48-hour turnaround time; and “Complete Loans” of $2,001 to $35,000, which require lenders to fill out a more comprehensive five-page application and have a two-week turnaround time.
Of the 100 to 150 applications received each month, 10 percent to 13 percent get approved, Lopez said. The recession and stalled credit markets have had an unexpected impact on Accion.
“We now see more qualified borrowers,” Lopez said. He attributes this to the scarcity of loans from traditional lenders, which means fewer people can qualify. Lopez works closely with bank lenders to create awareness for Accion, and to get them to refer clients.
“We work with every bank in the county,” said Makee, who handles the fundraising effort with banks and writes grant proposals. “They are aware of our services and refer (borrowers) to our program.”
Hundreds Of Clients
Accion serves 330 clients whose loan balances total $2.5 million.
“These are clients who own a swap meet to major corporations, run home-based businesses, restaurants or auto mechanic shops,” Lopez said. Even after the loans are given, Lopez keeps track of clients “to see how their business is doing.”
For 2009, the WBCC and Accion will continue to rely heavily on their partners, sponsors, the community and referrals for ongoing funding and to get the word out about their programs available to entrepreneurs such as Brent.
“They have been wonderful and really care about their clients,” Brent said.
Marion Webb is a freelance writer for the Business Journal.