ACCION Texas
Financing your
Business During
Tough Times
ACCION TEXAS
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Non-profit agency, established in San Antonio
1994 – the largest micro lender in the Country
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The mission of ACCION Texas is to provide credit to
small businesses that do not have access to loans from
commercial sources. Through its loans and
services, ACCION Texas helps microentrepeneurs
strengthen their business, stabilize and increase their
incomes, create additional employment and contribute
to the economic revitalization of their communities.
ACCION TEXAS Staff
Introduction
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Shirley Brooks – Regional Director
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I have worked for ACCION for 7 years
Year-to-date we have loaned out over $1.9M
Telephone (1-866-312-3774)
7100 Regency Square, Suite 103, Houston Texas
77036
Website (www.acciontexas.org)
Bridget Ross - Loan Officer
Disaster Recovery Loan for
Small Businesses 2%
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Existing Businesses affected by Hurricane Ike
Maximum Loan amount is $5000.00
Flexible on Collateral
Proof of having a business and bank
statements
Not Credit Score Driven
This is NOT the time
for Knee jerk reaction regarding
your Business Financials:
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How we handle money impacts our personal
lives and our businesses
A Checkbook is a theological document; it tells
you who and what you worship.
Billy Graham
Surviving the Tough Times
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Analyze Your Situation
Set Financial Goals for Your Money
Create a Budget for your Personal
Lives and Business
Develop a Banking Relationship
CPA, Insurance Agent,
and Attorney
GOALS WORKSHEET
Short Term
Cost
Target Date
Monthly
$300.00
6 months
$50.00
Target Date
Monthly
18 months
$55.55
Target Date
Monthly
30 years
$277.77
(up to 1 year)
Television
Mid Term
Cost
(1 - 5 years)
Vacation
Long Term
$1000.00
Cost
(5+ years)
Retirement
$100,000
Finding Money for Your
Business During Tough Times
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Personal Saving (this is a primary source of
funding for micro-businesses)
Friends and Family
Banks (this is the most common source of
funding)
Alternative Lenders (ACCION)
Venture Capitalist Group
Factoring (ACCION)
Underwriting Guidelines for Credit

Capacity - (please see Monthly Financial
Sheet) – This is by far the most important
element in determining your ability to repay the
loan. A business ability to prove it can cash
flow is demonstrated on the financial sheet
hand out.
Ability to Repay MUST be:
Unquestionable!
Capacity
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If start up or existing business - not able to
prove cash flow then an alternate source of
income is required.
Financials are Required (Tax Returns, P&L’s,
Balance Sheets, and Bank Statement)
Debt-to-Income .50 (including new loan)
30-40% of your available revolving credit
Liquidity (your investment into the business
NET MONTHLY INCOME
First Salary. . . . . . . . . . . . . . . . . . $_________
Spouse’s Salary. . . . . . . . . . . . . . $_________
Part-Time Job. . . . . . . . . . . . . . . .$_________
Child Support. . . . . . . . . . . . . . . .$_________
Other. . . . . . . . . . . . . . . . . . . . . . .$_________
TOTAL NET MONTHLY INCOME $________
EVALUATE TOTAL MONTHLY
INCOME
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Determine take home pay
Examine other income sources
NEEDS VERSUS WANTS
WHAT IS CREDIT?
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Definition
Credit worthiness
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Capacity judged by earning power and current
financial commitments
Character determined by honesty, reliability,
willingness to pay
Collateral measured by financial resources
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Income, home equity, business or household goods,
automobiles, life insurance, savings accounts
Underwriting Guidelines for
Credit
Bank Credit Score Requirement – 670 and
above (please understand that they look at
more then your score)
 Age of Credit (Established Credit)
 Type of Credit
 Third party record of your financial history
bottom line your credit report is a indication
of your Character. How you pay others is
probably how you will pay them
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ACCION Texas Credit
Score Requirements for Loan
Amounts:
650 – You may apply for loan amount
up to $100,000.00 (secured by land
 650 - $50,000.00 (Equipment, F&F,
Vehicles 10 years are older)
 630 - $35,000.00
 600 - $25,000.00
 550 - $12,000.00
 500 - $8000.00 under 500
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What Makes Up a FICO Score
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Payment History - 35%
Balances Carried
30%
Credit History
15%
Mix of ACCOUNTS 10%
Inquires
10%
DEVELOP BILL PAYING PLAN
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Know payment amounts and due dates
Establish personal pay day
Determine set-aside expenses
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Review Bill Paying Plan
HOW TO PAY EXPENSES
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Most expenses
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Best paid by check, money order, online
Have good payment records
Some payments best handled by
weekly cash basis
Research shows
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People more conscious of spending
paying cash
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More likely to stay within pre-set limits
CREDIT ADVANTAGES
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Credit
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useful in times of emergency
Sometimes easier and more convenient than cash
Allows you to make major purchases
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Car
House
CREDIT TERMINOLOGY
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Adjusted balance
Annual fee
Annual percentage rate (APR)
Average daily balance
CREDIT TERMINOLOGY
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Finance charge
Grace period
Other fees
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Late
Over limit
Cash advance
ESTABLISHING CREDIT
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Open checking and/or savings
account
Deposit amount of money in
financial institution
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Borrow against it with savings as
collateral
Borrow reasonable amount of
money
Make monthly payments
Pay bills on time
COST OF CREDIT
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Effects of minimum payment
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Borrow $1000 @ 22%
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Minimum payment $20
– Interest $18.33
– $1.67 goes to pay off debt
 Total Repayment – $11,80.00
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Borrow $5000 @ 15.9%
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Minimum payment approx. $110
– 343 payments
– $7,129.01 interest
– Total repayment - $12,129.01
National Credit Repository
Equifax – www.equifax.com
 Experian – www.experian.com
 TransUnion – www.transunion.com
 Fair Isaac Credit Score Hotline 800-7772066
 Everyone is entitled to one free report a
year.
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DEBT TO INCOME SAMPLE
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Sample
 Someone with gross monthly income
$2,000 making minimum payments of
$400 on debt (loans and credit cards)
 debt to income ratio of 20%
($400 / $2000 = .20)
DEBT TO INCOME STATUS
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20% or less:
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25% to 30%:
No trouble getting loans
30% warning – too much debt
 Reduce debt levels
 affects house purchases, interest rates,
car purchases
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In great standing
Eligible for low interest rate cards
DEBT TO INCOME STATUS
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Over 35%:
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Stop charging
Cut up your cards
Develop plan to get out of
debt
WHAT WOULD YOU DO?
Lose your job
 Income reduced
 Become ill, widowed,
divorced
 If debts go to collection
agency
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Communicate with your
lenders (make arrangements)
OPTING OUT
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To stop receiving pre-approved credit card
offers
Opt-out
 1-888-5-OPT-OUT
CONSEQUENCES OF
BANKRUPTCY
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On credit report 10 years
Difficult to obtain credit
May not be hired
Pay higher interest rates
Destroys credit scores
May be viewed by others