ACCION Chicago doubles it maximum loan size to $50,000

by Elizabeth Dwyer

On January 11^th Senator Richard Durbin visited ACCION Chicago and our successful client Gorilla Gourmet to help us announce exciting news: After more than a decade of offering loans up to $25,000, ACCION Chicago has doubled its maximum loan size to $50,000.

“We are giving small businesses a bigger chance to succeed,” Senator Durbin said.

Currently, the minimum loan size many banks will consider for small businesses is $100,000, and most will rarely, if ever, offer loans below $50,000 because they are not as cost-effective for the bank. Thus, there has been a gap in the market for small businesses that need more than $25,000 to achieve their business goals, but can’t take on a large enough loan to qualify for bank financing.

Since the recession, banks have also faced difficulties lending to borrowers who would have qualified but can’t now due to falling property values for collateral, perceived industry risk, and other barriers. As the financing gap has grown, ACCION Chicago wants to do all in its power to help small businesses expand. By offering loans up to $50,000, we help to fill that gap so companies like Gourmet Gorilla can launch, expand, and create jobs.

Danielle Hrzic and Jason Weedon founded Gourmet Gorilla in 2008 to provide healthy meals to Chicago schools. They got their business idea when their son started school and they saw the type of food the school provided. They decided to take action and try to provide better food to students from local farms. “We wanted to support local businesses and organic farms, and at the same time improve the health of our kids,” Danielle explained. Today, Gourmet Gorilla employs 27 people and serves 4,500 healthy breakfasts, lunches, and snacks each day at 90 schools in Chicago and the surrounding suburbs. Danielle and Jason source the food from local organic producers and distributors, further strengthening our local economy.

Senator Durbin visited our client Gourmet Gorilla to see the power of microfinance in action. “It’s increasingly difficult for small companies and aspiring entrepreneurs to go to banks, so these loans bridge the gap,” Senator Durbin said. “Gourmet Gorilla is a start-up company that wouldn’t have been able to get off the ground without ACCION financing to help.”

Senator Durbin, who is the Chairman of the Financial Services and General Government (FSGG) Appropriations Subcommittee, secured $25 million for microlending and $20 million for technical assistance grants to support micro-borrowers through the Small Business Administration (SBA) in the Fiscal Year 2012 omnibus appropriations bill enacted last month. This will support microlending to individuals and small businesses in addition to project-based financing in underserved areas. ACCION Chicago is the largest microlender in the state of Illinois.

Gourmet Gorilla founders Danielle and Jason know first-hand the difference microlending can make. “We got started with $8,000 and now we have 27 employees,” Jason said. “When you look at the impact, microlending is extremely cost effective.”

Business Spotlight: Creative Construction

About Spencer Rose:

Spencer Rose has lived on the West side of Chicago since the age of seven. He is the founder of Creative Construction, a home repair and remodeling company based out of Chicago. His clientele includes individuals and homes as close as Chicago and as far away as Blue Island, Illinois. If you are in need of masonry, siding, gutters, or home repairs, then Spencer Rose is your man.

Getting Started:

Spencer’s inspiration for his home repair business came from his mother, who was a carpenter by trade. His mother taught him the skills needed to go out on his own and start his own business. He began in the 1990’s and believes that his business offers a “service that provides a homeowner with top quality work and also meets deadlines.” Spencer was connected with ACCION after completing the Merit Program through the Jane Adams Hull House Association. Merit is an entrepreneurship program that works with formerly incarcerated individuals to assist them with completing a business plan. ACCION provided the capital to buy the necessary tools to get the business up and running.

Working with ACCION:

Spencer received a loan of $2,500 from ACCION Chicago to buy tools. He says ACCION Loan Officer Kyama Kitavi made the loan process very easy. “Once my application was turned in, there was no pressure, no hidden fee, and no surprises from ACCION.”  The loan helped Spencer purchase tools such as saws, nails, compressors, and ladders, which allowed him to accept more jobs and grow his business.

Looking Ahead:

Since receiving an ACCION loan, Spencer has been able to take on many more clients in Chicago and surrounding areas. He works on all different types of houses and is continuing to establish his business with new clients every day. In the future, he would like to purchase two trucks and hire a permanent crew so that he can continue to expand his business. Meanwhile, he says he is grateful for his wife, who acts as “Chief Operating Officer…she takes care of the contracts, receipts, and technology.”

Words of Wisdom

Spencer’s advice for new entrepreneurs is “Don’t be scared—jump in with both feet and don’t look back. If you need to look back, then don’t look back with regret!

Spencer Rose, ACCION Client and Owner of Creative Construction

Support this small business:

Creative Construction

5256 West Jackson Blvd., Chicago, IL 60644

Neighborhood: Chicago and surrounding suburbs

(773) 828-8052

 

A Fashion Designer Helping Women Entrepreneurs

by Olubukola Adekoje

You might know Tory Burch as a fashion designer, but do you know about her work with women entrepreneurs?

That’s right. There’s more to the designer than boutique style clothing, shoes and accessories. The Tory Burch Foundation, founded in 2008, “provides economic opportunities to women and their families in the United States.” Through a partnership with ACCION USA, Burch is focused on helping women through microfinance.

This past November, Burch visited Chicago and met with several ACCION Chicago female clients. During the meeting, she talked with the women about ways to improve their business and products. She described how to use social media opportunities to improve visibility. Burch brought with her a team of experts to offer the women advice about building their business. Through the afternoon, each woman was able to share her goals and plans for her business.

Like Tory Burch, these women are pursuing their passions and dreams. They came to ACCION Chicago for the funding to build their business. With an ever-growing business herself, Tory Burch is well positioned to serve as a model. Through dialogue with Burch, experts and each other, these women entrepreneurs discussed ways to move to the level.

How did the meeting end? With some nice Tory Burch gifts, of course! The mentoring meeting has provided extra motivation to the women participants too, who have since met together to discuss ways they can support one another’s businesses. We at ACCION Chicago are excited to see how the Foundation can continue to help women entrepreneurs in the Chicagoland area as they pursue their dreams and support their families.

The Entrepreneur: Motivate Your Employees

by Amy Clinton

At ACCION Chicago we spend a lot of time talking numbers with our clients. As a lender, it makes sense that our primary conversations with clients center on how to make their businesses work financially. However, the qualitative aspects of owning and running a small business may be some of the most dynamic and challenging aspects of the job.

Once you’ve secured financing for your business, there are still a lot of non-financial details to attend to. At first, many small businesses are run only by the owner or the owner’s friends and family. As businesses grow, small business owners must inevitably hire employees. Hiring and retaining the right people to keep your business stable and growing can be essential to the organization’s success. Once you’ve hired employees, it’s important to motivate them to work their hardest and smartest. This will make them both more satisfied with their jobs and will create more value for your business. If you have the right people, how do you motivate them to perform their best at work?

Money is not as important as you think. The implications of money management can be much greater for a small business than for a larger, more stable company. We’ve got good news for you small business owners: you don’t have to go broke to motivate and maintain your employees. According to a study done at Westminster College in Utah, “While 65% of managers think money is the most successful motivation technique, only 18% of employees agree. Instead, they cited boosting morale and recognition as higher on the scale.”

So what is important to motivating employees? The author of Drive, Dan Pink, said it best in his TED Talk. He has concluded that there are three primary factors that drive people to perform in the workplace.

• Autonomy: the urge to direct our own lives
• Mastery: the desire to get better and better at something that matters
• Purpose: the yearning to do what we do in the service of something larger than ourselves

If, in addition to paying people adequately and fairly, you can work these three components into the jobs of those you employ, Dan Pink says your employees will be more motivated and your business more successful. Many companies (including Google), use a method called Twenty Percent Time. Engineers can spend twenty percent of their time working on whatever they want as long as it isn’t part of their job. The result? In a single year, fifty percent of Google’s new products were invented on twenty percent time.

We realize most of you aren’t software engineers, and the businesses you run in Chicago are more different than similar to those in Silicon Valley. However, you can take these concepts and adapt them to make your businesses more productive and your employees more content. An accountant might allow her employees to create their own hours as long as they finish their work on time (called a ROWE: Results Only Work Environment). A restaurant owner might facilitate an all staff meeting once a week so that cooks, waiters, and bus boys all collaborate together to create and test new dishes. At ACCION we know that getting a loan is only one part of building a strong business, and encourage small business owners to think outside the box in motivating employees to be productive and fulfilled at work.

Sources and articles for further reading:

Socialcast Blog: Motivating Employees in the Workplace – It’s Not Just About the Money

Inc. Magazine: 9 Things That Motivate Employees More Than Money

TED Talk: Dan Pink on the Surprising Science of Motivation

James Bird Guess: How to Motivate Your Employees Without Money

ACCION Chicago Helps Create Jobs for a Robust Economy

by Olubukola Adekoje

Jobs are nearly all we hear about these days, and for good reason. Who doesn’t know someone currently unemployed and the according hardship? Recently it appears that things are improving. Yet, for all the talk, it would seem like little gets done.

Perhaps a little will, through little loans. That’s where ACCION Chicago comes in. We’ve been helping our clients create or maintain jobs in the community by providing little loans to start or expand their businesses. With the help of microloans, entrepreneurs can employ themselves and others.

Take for example, our client, Daniel Klein, co-founder and owner of Tiesta Tea. Dan came to ACCION for help when he couldn’t get financing elsewhere. With the help of an ACCION loan, he was able to purchase the right packaging to sell his tea. He says that loan made all the difference. Today, Tiesta Tea is experiencing tremendous growth and has been able to hire 4 employees despite only starting business in early 2011.That’s just one story among the nearly 300 clients we’ve served so far this year.

We’re also excited to make a greater impact in Chicago in the upcoming years through the Chicago Microlending Institute (CMI). With support from the City of Chicago and the Citi Foundation, ACCION will help create a microlending institute to train other microlenders. During the first year, the institute aims to provide $1 million in microloans to approximately 100 small businesses.

“Small businesses are the backbone of Chicago’s economy,” said Mayor Emanuel. “We must do everything we can to make sure our small businesses have the resources and opportunity they need to compete and grow. This program will build on ACCION’s proven model and bring two more top-tier microlenders into the market next year.”

We’re glad that our clients help fuel the economy; a little can go a long way.