Microlender Acción Texas steps in when big banks stall

More than ever, the big banks are averse to providing loans to the nation’s small businesses — even while data show this to be the nation’s genuine job-producing sector. A recent Biz2Credit Small Business Lending Index found loan approvals by big banks (those in excess of $10 billion in assets) dropped from 10.9 percent in March to 10.6 percent in April. Such lending plummeted last year, dropping by $15 billion in the first quarter alone, according to a report from the U.S. Small Business Administration’s Office of Advocacy. The situation is perhaps most dire for fledgling businesses, or start-ups, often left out in the cold without the ability to demonstrate proven revenue streams required of traditional banks as a loan precondition.

Enter Acción Texas Inc. Since its 1994 founding, the locally based microlender has quietly been dispensing small loans to those who wouldn’t normally qualify for them at traditional banks. For loan recipients, such small loans are nothing short of transformative.

When Dehann Riou lost her infant daughter to illness in 2006 just three days after she was born, she threw herself into her art of making paper crafts to help her cope. “Sometimes, I’d stay up all night and my husband would wake up the next morning to stacks of my paper creations,” she said. As her skills improved, it dawned on her that she had the makings of a business. Thanks to a $12,000 Acción Texas loan, she was able to open Chic Deeva, a 1,200-square-foot stationery boutique at 555 West Bitters in the summer of 2010. “We first went to our own bank and even though we had our savings there and had done our research, they still didn’t care,” she said. “Other banks were willing to open our business account, but not provide us a loan.”

After 15 years in the corporate world doing sales and marketing for a local commercial property tax firm, Michelle Solis was weary of the rat race. She longed to launch her own company to accommodate her love of cooking. But after visiting six banks, she quickly grew frustrated of being turned down for a much-needed loan. “They told us they didn’t want to work with a business that didn’t have an established revenue stream,” she said. “After the first two banks I just stated it up front that I didn’t have a revenue stream instead of wasting time explaining and showing them my business plan.”

She finally turned to Acción Texas and secured a $50,000 loan. With Acción’s assistance and endorsement, she got an additional $170,000 loan from Amogen Bank. The loans helped her open the 2,600-square-foot Bake, Broil & Brew (1508 Guadalupe) on the West Side, a so-called “kitchen incubator” providing space and licensed commercial kitchens for other culinary-inclined entrepreneurs on an hourly, weekly, or monthly basis. The mother of four kids launched her growing business as CEO, with her husband working alongside her as president. “We are by no means exploding yet, but we’ve had continued, steady growth,” she said. “Later today I’m meeting with a new client, a lady who has a market for her special spices but needs a kitchen to mix them and package them.”