Small businesses in need of a quick, modest-sized loan often have little choice but to turn to high-cost, yet easy to access, alternative credit products. But New Mexico business borrowers have a new option.
Accion had long been looking for ways to speed up the process of making microloans to borrowers who don’t qualify for loans from traditional lenders and need a relatively small amount of money to take advantage of a time-sensitive business opportunity. Accion also wanted to help businesses respond quickly when faced with an urgent need.
Almost a year ago, the nonprofit lender began piloting quick-turnaround “Presto Loans” of $8,000 or less with interested applicants. The pilot project was a success — with 285 loans totaling $939,000 — and Accion has recently cemented its offering of Presto Loans, moving toward a one-hour turnaround time from loan application to funding by the end of the year.
The Presto Loan works by using technological advances to streamline loan processing, according to Metta Smith, director of lending and client relations at Accion’s Albuquerque office.