San Antonio-based Accion Texas-Louisiana, the country’s largest nonprofit microlender, is receiving a $1.5 million grant through the Treasury Department’s Community Development Financial Institutions Fund.
Accion President and CEO Janie Barrerasaid 80 percent of the funds will be used for loans and loan loss reserves. Ten percent will be used for administration costs, and the remaining 10 percent will be used for research, development and expansion efforts.
“Our No. 1 challenge has been capital,” Barrera said. “The dollars we are getting from this grant will go directly into the hands of hardworking men and women who own businesses.”
The Treasury Department awarded a total of $142 million to 155 organizations nationwide serving economically distressed communities.
U.S. Rep. Lloyd Doggett, a senior member of the Ways and Means Committee, congratulated Accion for the grant.
“Community economic development is a term used quite often in Washington, but it is a term understood best by the dedicated community partners like Accion who commit to more opportunity for small business development,” Doggett said in a prepared statement.
Accion also announced Monday that the U.S. Small Business Administrationhas approved it as a lender under a new federal program that aims to increase the number of loans in underserved communities. Launched in February, the Community Advantageprogram guarantees 85 percent of loans made up to $150,000 and 75 percent for loans larger than $150,000. It is a three-year pilot initiative.
The designation allows Accion to make loans of up to $250,000 at all its offices; previously, the cap had been $100,000 in all cities except San Antonio.
Under the program, lenders are expected to maintain at least 60 percent of their SBA loan portfolio in underserved markets such as low- to moderate-income communities and new businesses. Accion said its clients typically have lower-than-average incomes, and about 46 percent of its clients have been in business less than one year.
Established locally in 1994, Accion provides loans to small-business owners who lack commercial credit. It has nine offices in Texas and four in Louisiana. It will add a lending service to Arkansas this year. It has made more than 12,000 loans during its existence totaling about $112 million.
The organization previously said it hopes to reach 20,000 loans by its 20th year, 2014. Accion offers loans from $500 to $250,000.
Express-News archives contributed to this report.