First-time business owner Magin Schantz runs a community art center and daycare facility in Queens, New York. Inspired to create a space that would not only have a lasting impact on an underserved community, but also turn a profit, Magin had the idea for Supermoon Art Space – a place where neighbors from different backgrounds could deepen their bonds through art-making and collaboration.
But in 2017, when she set out to launch her business, she realized one major roadblock: very few traditional lenders would give money to start-ups like hers “That was really discouraging,” she recalls. “We had some savings, and we could scrape some money together from family, but I still needed something more to spring off of.”
Although entrepreneurship is lauded as an opportunity for anyone to become a successful business owner, reliable funding for low- and moderate-income entrepreneurs in the U.S. is a persistent challenge. In fact, the U.S. Small Business Association has found that although low-income areas are home to almost a quarter of all workers, they account for just two out of every 11 self-employed workers. Steadfast in her vision, Magin learned of Accion, a nonprofit supported by MetLife Foundation that provides funding and support to help businesses like hers get off the ground.
“Accion not only provided funding but they helped me refine my goals and mission. It’s hard to imagine how else I could have built the business" It’s likely that if I had started the business without all that knowledge, I would have been less prepared, Magin says, looking back.
Accion is a global nonprofit that works in the U.S. as the largest nationwide nonprofit lending network. For more than 25 years, Accion has helped entrepreneurs launch, grow, and build resilient businesses by providing access to capital and the business support they need to create and grow healthy enterprises and contribute to thriving local economies. The organization has lent more than $600 million to entrepreneurs to date across the country.
Supporting small business owners
Accion’s model goes beyond transactional lending to truly support the entrepreneur. Alongside every loan, each entrepreneur receives help and advice from Accion loan officers, who help them understand their credit and how to improve it, build a strong request for funding, and access training and resources to help grow their business. For the entrepreneurs who connect with Accion, this relationship helps empower them to overcome an obstacle many of them face – feeling as though every challenge is unique to their business and feeling isolated in trying to solve it.
“With someone at Accion to ask questions or to help get connected, we become a virtual or real network for people who were not necessarily born into this world having one,” Gina Harman, CEO of Accion’s U.S. Network, says.
After Magin was introduced to Accion, she spent six months working closely with the Accion team developing and fine-tuning her business plan before executing it. Together, they built a unique model that harnessed consistent revenue flow through a licensed daycare, with the flexibility to run creative and inclusive art programming in the evenings and on weekends.
Not only does Supermoon offer an inclusive and community-minded playschool and after school club complete with guest instructors in the arts, but the business model Magin developed with Accion also gives her the opportunity to give back to the community.
Alongside their workshops for adults and children, Supermoon opens its doors free of charge to those who need it, such as one neighborhood family with 12 to 15 foster care children who come regularly after school hours.
“I didn’t go to school for business; it was like a crash course,” Magin says. “Without the planning stage with Accion and the process of having to develop a really detailed business plan I would have been less prepared both philosophically and strategically. Accion helped me set my goals from the very beginning and then made sure it was happening from day one.”
Small businesses are the backbone of the economy
Small businesses like Supermoon are foundational to the U.S. economy. According to data from the Census Bureau’s Annual Survey of Entrepreneurs, of the 5.6 million companies in the U.S. in 2016, 89% had fewer than 20 workers.
Every business Accion serves supports 3.3 jobs on average, and in 2016 their clients contributed an estimated $250 million in wages to local economies And, small businesses are crucial to the health of communities, not just because they inject wages into local economies, but because they are key in fostering and maintaining a sense of place and community identity.
“Community-based businesses provide employment opportunities that support day-to-day financial stability for the small business owner and his or her employees,” says Evelyn Stark, Head of Financial Health for MetLife Foundation. “And, small businesses make communities stronger and more vibrant – even when they aren’t in the art business like Supermoon!”
In a gentrifying neighborhood, it was important to Magin that Supermoon was clearly meant to serve long-term residents, not just the younger, wealthier people moving into the area.
“Families that grew up in this neighborhood felt uncomfortable with the changes. They didn’t feel welcome in these new spaces,” she recalls.
As a result, Supermoon was designed to keep community and inclusivity at its core. The center’s staff are primarily women from the local neighborhood, the programs are offered at a sliding scale pay rate, and as often as possible workshops are run in both Spanish and English.
It turns out that many of Accion’s investments have similar results reaching underserved segments of the community. As it stands, 63% of Accion's clientele in the U.S. are entrepreneurs of color, 44% are female, and the vast majority are in the low- and moderate-income bracket
Commitment to financial health and inclusivity
Accion’s commitment to enabling and financially empowering low- and moderate-income entrepreneurs, women, and people of color is well-aligned with MetLife Foundation’s objectives. The organizations have a shared commitment and belief that financial health belongs to everyone, and that small business growth in underserved communities is key to achieving this.
MetLife Foundation is proud to support Accion’s financing of small business owners, helping low- and moderate-income entrepreneurs secure funding to build their businesses. Learn more about MetLife Foundation and its support of financial health.