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Creative Sources of Funding - Elizabeth Garlow, ACCION USA

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Presentation delivered at MassRecycle's 4th Annual Green Office / Green Facility Conference, Bentley University, June 15, 2010. Get invited to next years conference by signing up to MassRecycles free email newsletter at www.massrecycle.org.

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ACCION USA Green Microloan Program Elizabeth Garlow Business & Product Development, ACCION USA Lending. Supporting. Inspiring.
Who is ACCION USA? A nonprofit, community based organization providing access to capital and credit education with over 20,000 clients served with loans averaging $9,000. We help individuals strengthen their business, increase their profits, and contribute to the economic growth of their communities. And now, AUSA will help small business improve the environment! www.accionusa.org 2
Agenda Why Green? How do ACCION USA Green Loans work ? Green Resources and Partners Additional Q & A www.accionusa.org 3
Triple Bottom Line greater impact per loan ? reen y G Wh PEOPLE PROFIT PLANET www.accionusa.org 4
AUSA Already Provides Green Loans! n? r ee With a $13K AUSA loan, Raquel bought into a green cleaning franchise y G Wh using eco-friendly products. A $12K AUSA loan to a bike shop helped Andrew invest in marketing and purchase extra equipment A business producing biodiesel products used an $8K AUSA loan to purchase inventory and relieve the owner dependency on credit cards. Marco owns a construction business and used a $12K AUSA loan to purchase an eco-friendly insulation system, accessing gov programs. Ricardo owns a commercial cleaning company and used a $20K AUSA loan to purchase an eco-friendly carpet cleaner. While the machine is expensive, it is opening up a whole new market. www.accionusa.org 5
AUSA puts Green in reach! AUSA addresses clients concerns by offering: Financing for the upfront or gap costs of going green. We will use cost savings and rebate programs to strengthen applications Support navigating the energy audit process Access to free training and educational resources Guidance around available incentives, rebates and solutions to reduce expenses and attract new customers www.accionusa.org 6
How do Green Loans work? www.accionusa.org 7
Green Loan Definition ? een Gr w Ho A green AUSA microloan is one that helps entrepreneurs incorporate green products, services or energy saving principles into their business operations. www.accionusa.org 8
What Qualifies as Green? ? een Gr w Investing in Energy / Water Efficiency Measures: Ho New Equipment (refrigerators, ovens) Facilities upgrades (fluorescent / LED lighting, heating / water system upgrades, other small appliance upgrades) Providing Green Services: Services or industries that are green in nature (weatherization, eco-tourism, alternative transportation) Offering / Using Green Products: Organic/sustainable forestry/local products Recycled materials Alternative Energy-related products (biodiesel, solar panels) www.accionusa.org 9
Energy Efficiency Loan Benefits n? ee Avg F&B Loan $9,036 Gr w Ho Avg Mthly Utility Bill $753 Avg Mthly Savings $103 (14%) With an Energy Audit Term of Loan Potential Loan Increase 12 $1,239 We add cost savings to 18 $1,858 the applicants monthly 24 $2,478 income, improving their cash flow and their 30 $3,097 chances of getting approved. 36 $3,717 42 $4,336 www.accionusa.org 10
Green Resources and Partners! www.accionusa.org 11
Green Entrepreneur Resource Center ACCION USA created an online Green Entrepreneur Resource Center with: Articles and Tip Sheets Resource Center for Green Entrepreneurs with links to partner organizations ACCION USA is engaging our partners as guest experts in a webinar series: Branding Your Business for the Green Market Making your Business Energy Efficient Green Marketing 101 All About Green Business Certifications Sustainability and Leadership (June 22nd!) Comenzando un negocio sostenible (June 24th) www.accionusa.org 12
Partnership / Referral Examples n! r ee ll G Se Banks & Com AUSA Partners with organizations to help small Orgs businesses access the $ they need Energy Auditor Work together with energy auditors to help / Utility streamline the process for clients Gov Agencies NYSERDA, Mass CEC, EPA (Energy Star) Distributors / Wed like to offer green discounts (ex. Green Manufacturers Depot 10% Discount) TA Providers DSIRE USA, Nat / Local Restaurant Associations, Sustainable Business Networks, and YOU! www.accionusa.org 13
Interest Rates Green Loans Range in size between $500 - $50,000 or up to $30,000 if not yet profitable Green Loans APR 8.99-15.99% for up to $50,000 (8.99% in New York) Renewal Loans with perfect Rate decreases with each additional loan. repayment on previous AUSA loans FEES Financed into loan Application Fee $30 If Loan is Approved Closing costs Fees 3-6% of the loan amount Pre-penalty Fee None TERMS up to 60 Months Equal monthly payments of principal and interest for Growing and Established Businesses www.accionusa.org 14
Requirements Green Loan Program Eligibility: Energy savings loan requires an energy audit Equipment purchases must be energy efficient certified 50% of the loan purpose must be green General Business Loan: Six or more months in operation Credit score of 575 or higher with less than $3,000 in past due debt No bankruptcies in the past 12 months, no foreclosures in the past 24 months, owning no more than 4 properties No late payments on rent/mortgage in the past 12 months Sufficient cash flow to comfortably support monthly loan payments Additional for Start-up Loans: Cosigner may be required If not yet profitable, borrower or spouse must have outside income All required licenses in place Market study and 12 months of financial projections www.accionusa.org 15
For More Information If you have questions about our green loan program, would like to apply for a green loan or would like to make a green loan referral: Please contact Renzo Mendoza-Castro at (617) 616-1551 or rmendoza@accionusa.org Visit www.accionusa.org/green Green workshops listed at www.accionusa.org/workshops www.accionusa.org 16

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Creative Sources of Funding - Elizabeth Garlow, ACCION USA

  • 1. ACCION USA Green Microloan Program Elizabeth Garlow Business & Product Development, ACCION USA Lending. Supporting. Inspiring.
  • 2. Who is ACCION USA? A nonprofit, community based organization providing access to capital and credit education with over 20,000 clients served with loans averaging $9,000. We help individuals strengthen their business, increase their profits, and contribute to the economic growth of their communities. And now, AUSA will help small business improve the environment! www.accionusa.org 2
  • 3. Agenda Why Green? How do ACCION USA Green Loans work ? Green Resources and Partners Additional Q & A www.accionusa.org 3
  • 4. Triple Bottom Line greater impact per loan ? reen y G Wh PEOPLE PROFIT PLANET www.accionusa.org 4
  • 5. AUSA Already Provides Green Loans! n? r ee With a $13K AUSA loan, Raquel bought into a green cleaning franchise y G Wh using eco-friendly products. A $12K AUSA loan to a bike shop helped Andrew invest in marketing and purchase extra equipment A business producing biodiesel products used an $8K AUSA loan to purchase inventory and relieve the owner dependency on credit cards. Marco owns a construction business and used a $12K AUSA loan to purchase an eco-friendly insulation system, accessing gov programs. Ricardo owns a commercial cleaning company and used a $20K AUSA loan to purchase an eco-friendly carpet cleaner. While the machine is expensive, it is opening up a whole new market. www.accionusa.org 5
  • 6. AUSA puts Green in reach! AUSA addresses clients concerns by offering: Financing for the upfront or gap costs of going green. We will use cost savings and rebate programs to strengthen applications Support navigating the energy audit process Access to free training and educational resources Guidance around available incentives, rebates and solutions to reduce expenses and attract new customers www.accionusa.org 6
  • 7. How do Green Loans work? www.accionusa.org 7
  • 8. Green Loan Definition ? een Gr w Ho A green AUSA microloan is one that helps entrepreneurs incorporate green products, services or energy saving principles into their business operations. www.accionusa.org 8
  • 9. What Qualifies as Green? ? een Gr w Investing in Energy / Water Efficiency Measures: Ho New Equipment (refrigerators, ovens) Facilities upgrades (fluorescent / LED lighting, heating / water system upgrades, other small appliance upgrades) Providing Green Services: Services or industries that are green in nature (weatherization, eco-tourism, alternative transportation) Offering / Using Green Products: Organic/sustainable forestry/local products Recycled materials Alternative Energy-related products (biodiesel, solar panels) www.accionusa.org 9
  • 10. Energy Efficiency Loan Benefits n? ee Avg F&B Loan $9,036 Gr w Ho Avg Mthly Utility Bill $753 Avg Mthly Savings $103 (14%) With an Energy Audit Term of Loan Potential Loan Increase 12 $1,239 We add cost savings to 18 $1,858 the applicants monthly 24 $2,478 income, improving their cash flow and their 30 $3,097 chances of getting approved. 36 $3,717 42 $4,336 www.accionusa.org 10
  • 11. Green Resources and Partners! www.accionusa.org 11
  • 12. Green Entrepreneur Resource Center ACCION USA created an online Green Entrepreneur Resource Center with: Articles and Tip Sheets Resource Center for Green Entrepreneurs with links to partner organizations ACCION USA is engaging our partners as guest experts in a webinar series: Branding Your Business for the Green Market Making your Business Energy Efficient Green Marketing 101 All About Green Business Certifications Sustainability and Leadership (June 22nd!) Comenzando un negocio sostenible (June 24th) www.accionusa.org 12
  • 13. Partnership / Referral Examples n! r ee ll G Se Banks & Com AUSA Partners with organizations to help small Orgs businesses access the $ they need Energy Auditor Work together with energy auditors to help / Utility streamline the process for clients Gov Agencies NYSERDA, Mass CEC, EPA (Energy Star) Distributors / Wed like to offer green discounts (ex. Green Manufacturers Depot 10% Discount) TA Providers DSIRE USA, Nat / Local Restaurant Associations, Sustainable Business Networks, and YOU! www.accionusa.org 13
  • 14. Interest Rates Green Loans Range in size between $500 - $50,000 or up to $30,000 if not yet profitable Green Loans APR 8.99-15.99% for up to $50,000 (8.99% in New York) Renewal Loans with perfect Rate decreases with each additional loan. repayment on previous AUSA loans FEES Financed into loan Application Fee $30 If Loan is Approved Closing costs Fees 3-6% of the loan amount Pre-penalty Fee None TERMS up to 60 Months Equal monthly payments of principal and interest for Growing and Established Businesses www.accionusa.org 14
  • 15. Requirements Green Loan Program Eligibility: Energy savings loan requires an energy audit Equipment purchases must be energy efficient certified 50% of the loan purpose must be green General Business Loan: Six or more months in operation Credit score of 575 or higher with less than $3,000 in past due debt No bankruptcies in the past 12 months, no foreclosures in the past 24 months, owning no more than 4 properties No late payments on rent/mortgage in the past 12 months Sufficient cash flow to comfortably support monthly loan payments Additional for Start-up Loans: Cosigner may be required If not yet profitable, borrower or spouse must have outside income All required licenses in place Market study and 12 months of financial projections www.accionusa.org 15
  • 16. For More Information If you have questions about our green loan program, would like to apply for a green loan or would like to make a green loan referral: Please contact Renzo Mendoza-Castro at (617) 616-1551 or rmendoza@accionusa.org Visit www.accionusa.org/green Green workshops listed at www.accionusa.org/workshops www.accionusa.org 16