Accion Texas, City of Corpus Christi extend microloan partnership another year

By Mike D. Smith
Posted August 9, 2012 at 6:32 p.m.

CORPUS CHRISTI — Laid off in March 2008 after 19 years with a fitness company, James Elizalde was left with his final paycheck.

However, he had a business idea: transforming his previous job in fitness equipment service and repair into a full-fledged operation.

Elizalde poured his final check into his dream, but banks turned him away. They wanted at least two years of business tax returns for consideration.

That was a no-go for someone working on their first startup.

That’s when his wife, Lety, found Acción Texas Inc., which James Elizalde describes as a sigh of relief. A loan of $8,000 helped the Elizaldes form Coastal Bend Fitness Service.

“My parents had helped quite a bit as far as office equipment, helping me get started at my location as far as deposits on the rent and all that, but we were at a standstill,” James Elizalde said. “And that’s where Acción filled that void.”

The Elizaldes on Thursday received $1,000 of the $31,000 in grants presented to 30 small business success stories helped by Acción, the nonprofit that amasses grant money and offers microloans to entrepreneurs.

The grants, between $500 and $1,000, went to borrowers who routinely have paid back their loans on time during the past two years.

Acción President and CEO Janie Barrera said the nonprofit is a bridge between banks and small business owners, focusing on giving businesses a needed boost to develop, expand and grow into customers for large banks.

“It’s not that the banks don’t want to make these loans, it’s because they can’t,” Barrera said, referring to lending rules banks must follow. “If you think about it, we’re like a financial institution without the depositors.”

The group boasts a payback rate of 95 percent. Since Acción’s local office opened in the Coastal Bend in 2004, the group has made more than 500 loans totaling $7.1 million, Barrera said.

Acción has a partnership with the city of Corpus Christi in which the city buys down the interest for loans Acción extends to residents. The program has been extended another year.

The idea is to continue to help small businesses grow and expand, and to build Corpus Christi’s $17.9 billion economy, said Mike Culbertson, vice president of the Corpus Christi Regional Economic Development Corp.

Culbertson called it “economic gardening.”

“This is how we grow,” Culbertson said, representing the city at Thursday’s event. “So when a certain sector goes down, Corpus can keep growing.”

Acción provided the boost needed most when even the most detailed business plans couldn’t garner capital from banks during the recent downturn, Thursday grant recipients said.

Referred by a friend, Laura Cramer started her clothing business, Ambition by L.C. Fashions, three years ago in the midst of the tight economy. Her clothing store is a growing side-business but Cramer hopes to turn it into a full-time operation.

“It was easy to get what you need and start making money right away,” Cramer said.

Cesar Torres started his pre-owned auto sales business, Lofi Motors — short for “Leap of Faith Investments” — in 2007. Torres said the Acción loan helped him get started and is helping him develop a relationship with future lenders.

“These guys are a stepping stone to get people off and running,” Torres said.

company profile

Founded in 1994, Acción is a microlender and small business lender that provides affordable loans to new and existing entrepreneurs who have limited access to traditional capital. The organization has made more than 12,400 loans totaling about $125 million in Texas, Alabama, Arkansas, Kentucky, Louisiana, Mississippi, Missouri and Tennessee.