Issue blogs
When your cause intersects with the news of the day, there could be a great opportunity to share your perspective. When I can't explore my take through a letter to the editor or an op-ed, I often write issue blogs to reinforce key messages and shape the narrative I want to share with target audiences online. It's also great conversation fodder to share on social media.
"Betting on Small Business: What Boston and Chicago Can Teach Us About Cross-Sector Collaborations"
“A New Partner in Transparent Lending ”
“Spotlight: Is Denver a Small Business Lending Desert or Oasis?”
Betting on Small Business: What Boston and Chicago Can Teach Us About Cross-Sector Collaborations (click)
Target audience: Potential and existing donors
Goal: Position Accion and organizational partners as collaborative players in successful collaboration efforts
What does the launch of a new campaign targeting predatory lending practices in Chicago have to do with the opening of a new bakery in Boston? More than you may think.
Native Bostonian Carlene O’Garro’s dream to open her first storefront isn’t too dissimilar from the hopes of entrepreneurs in the Windy City looking to start and expand a small business. Her inability to access financing from a bank is an all-too-familiar story fueling the rise of unregulated, online merchant cash advance companies selling entrepreneurs access to easy, high cost capital – and some have ensnared small businesses in Chicago and put their viability at risk.
So what’s connecting these dots? In both cities, private, nonprofit, and government partners are coming together to create new ways for small businesses to succeed. Creatively connecting business owners with holistic and innovative interventions that address their needs, these collaborations are building a supportive environment for small businesses through one unifying philosophy: supporting small business is good business.
In Chicago, Mayor Rahm Emanuel announced a campaign last month to help business owners avoid taking on loans they cannot afford, including cash advances where effective Annual Percentage Rates range from 30 percent to as high as 200 percent. It’s one piece of a larger effort to create a positive lending environment for small businesses and accelerate economic growth, including projects like Seed Chicago, the Chicago Microlending Institute, and the public-private partnership World Business Chicago that puts jobs and small business at the center of the city’s economic agenda.
And it doesn’t stop there. Illinois’ Ridgestone Bank is helping Accion Chicago increase its maximum loan size to $100,000 through the SBA Community Advantage Program. With the ability to make these larger dollar loans available, Accion and Ridgestone are helping to fill the lending gap with transparent, responsible loan products.
In Boston, Carlene’s bakery is the latest new small business to open among many on Centre St. in West Roxbury over the last year. These businesses are driving revitalization of the area, and her grand opening on January 30th featured a diverse cohort of partners and supporters, including Samuel Adams, Accion, the Boston Mayor’s Office, and West Roxbury Main Streets.
For eight years, Carlene’s journey from a business idea to a kitchen incubator to a new storefront was in part made possible by her strong relationships with loan officers who guided her business forward, her participation in speed coaching events that helped her make key managerial decisions, and her work with the City and local advocates to access the permits she needed to open.
If we want to understand how best to support small businesses in neighborhood and cities across the country, these two examples provide rich case studies. Cross-sector collaborations that put small businesses at its center are a bold approach to economic development policy. They’re networks for economic change, and local officials, corporate partners, and nonprofits are wagering that their respective investments in small business is good for everyone’s business.
A New Partner in Transparent Lending (click)
Target audience: Partners and individual donors
Goal: Inform stakeholders on exciting new partnership between Accion and MetLife Foundation
If you can’t easily track all of the latest developments in the online lending marketplace, you’re not alone.
In past weeks, a slew of online lenders have made announcements about new partnerships to build their businesses and venture capital commitments to grow operations. These companies, and others like them, are responding to significant demand for capital among small business owners. Recent initial public offerings in 2014 and those to come in 2015 demonstrate how quickly this marketplace is growing.
With a sizeable market at play and hopes pegged on future growth, investors in search of meaningful returns are placing their bets on these players that are investing in technology and leveraging big data to increase market share and reach the underserved, which now includes more entrepreneurs looking for capital on mobile devices, not at their local bank branches. Funding Circle and OnDeck Capital recently announced initiatives to make it easier for investors to buy loans through their investor marketplaces, and they’re a target audience very sensitive to end-of-year financial reports and future growth projections.
As much as the lending landscape is changing, we are holding steady and placing our bets on the enterprising business owners who are building a better life for themselves, their families and their communities. From the health care provider in Chicago to the food product manufacturer in New York City to the craft artisan in Denver, these entrepreneurs are applying for microloans to become their own boss, continue a tradition, or launch a new career path. And it’s no surprise that many are looking for capital online.
That’s where Accion’s new partnership with MetLife Foundation comes in. We want to make sure that entrepreneurs have the information and support they need to confidently choose the right type of capital, at the right size, at the right time to position their businesses for long-term success. It was with this vision that we launched our first national online lending platform in 2014.
As part of our partnership announced today, we’re strengthening Accion’s online home with a few core ideas in mind. Business owners should be able to review and compare clear details about the cost of capital, including annual percentage rates, fees, and payment terms. When we market our products and services, we do so committed to not just the transaction, but our interaction with borrowers who develop personal relationships with our lending officers invested in understanding and helping them reach their goals. We also are committed to working to scale the investments of our donors to help as many businesses grow and create jobs as possible to strengthen our local communities -- our shared definition of success.
Learn more about how MetLife Foundation is helping us ensure that entrepreneurs have financing options online that are appropriately and transparently priced to help them achieve business health and growth.
Spotlight: Is Denver a Small Business Lending Desert or Oasis? (click)
Target audience: Attendees at the 2014 Opportunity Finance Network Annual Conference
Goal: Drive social media visibility for Accion with timely content spotlight relevant to location and topic(s) of conference
Many entrepreneurs trying to jumpstart that next neighborhood brewery, coffee shop, or food truck in Colorado need financing to help turn their ideas into a reality. As the Opportunity Finance Network conference kicks off today in Denver, a new report identifies the Mile High City as an oasis in the larger terrain that is America’s small business lending market.
But the report also finds that Denver’s loan-friendly climate since the Great Recession coincided with a nationwide decline in small business lending. What can be done to turn the country’s underserved lending deserts into lending oases?
THE REPORT’S FINDINGS
The National Community Reinvestment Coalition report, “Small Business Lending Deserts and Oases” analyzed private sector and federally-supported lending trends in more than 3,200 counties between 2007 and 2012. While 61.6 percent of small businesses received private-sector loans in 2007, only 16.4 percent received private-sector loans in 2012.
When comparing counties in the top 20 percent and bottom 20 percent – the report’s clearest “oases” and “deserts,” – 21.3 percent of small businesses in the top quintile were granted loans, while only 7.5 percent of businesses in the bottom quintile of counties received loans.
“This analysis should serve as a wake-up call to the huge drop in lending small business owners have been facing since the recession, and the heightened challenges small business owners in certain geographic areas are facing in obtaining small business lending,” said NCRC President and CEO John Taylor.
ARE THE SMALLEST BUSINESSES THRIVING?
We were especially interested to understand how these trends played out for the nation’s smallest, small businesses and their champions – often times women, minorities, and immigrants who cannot access financing through the formal financial system. Through the WE Lend Initiative, Accion is partnering with Sam’s Club to increase access to capital for women entrepreneurs in lending deserts and oases across the country and strengthen SBA-recognized Women’s Business Centers.
According to the report, businesses earning less than $1 million in revenue received just 10 percent of all business loans made, as compared with 16 percent of all small businesses. The report also cites racial lending disparities, as well as gender lending disparities in federally supported small business lending: In 2012, roughly 9.3 Small Business Administration (SBA) 7(a) loans were issued per 10,000 women-owned businesses, in contrast to 24.7 SBA 7(a) loans per 10,000 male-owned small businesses.
OUR WORK IN COLORADO AND BEYOND
Look no further than the brewing industry in Colorado to understand the challenging financing needs of many entrepreneurs in the sector. Many of these start- up entrepreneurs need large loans – between $100,000 to $200,000 – to buy the equipment necessary to start their businesses, and Accion is where many turn when larger banks say no.
In Colorado, Accion lent more than $3 million to 243 businesses across the state, including Denver. As the leading nonprofit provider of small business coaching and capital, we’re doing everything we can to improve access to capital for very small businesses in lending oases and drive much-needed capital to areas with lower reported lending levels, including San Diego.
Come visit our table booth at the conference to learn more about our lending efforts across the country.
Download the NCRC report here.
go beyond the surface. | akosiewicz@gmail.com