Character loans rebuilding New Mexico’s entrepreneurs and economy

Character loans giving business owners a fresh start

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Artist Valerie Isenhower | W.K. Kellogg Foundation
Artist and photographer Valerie Isenhower restocks shelves in her gallery. She received her first loan from Accion three years ago to buy supplies to shoot the Albuquerque International Balloon Festival.
Photographer Valerie Isenhower | W.K. Kellogg Foundation
Valerie Isenhower greets a customer while working the cash register at her art gallery. Isenhower says her business has helped a number of artists become self-sufficient by selling their art.
Alfonso Ramos | W.K. Kellogg Foundation
Manuel Baray reviews a loan application with Accion representative Alfonso Ramos. Accion is a micro-lending organization that provides loans to start or grow businesses.
Manuel Baray | W.K. Kellogg Foundation
Manuel Baray shakes hands with Accion’s Alfonso Ramos after signing a loan to support his transportation business. Accion’s character-based approach evaluates loan applicants on criteria beyond credit scores.
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Artist Valerie Isenhower | W.K. Kellogg Foundation
Photographer Valerie Isenhower | W.K. Kellogg Foundation
Alfonso Ramos | W.K. Kellogg Foundation
Manuel Baray | W.K. Kellogg Foundation

More than 20 years ago, James Eustace started making jewelry as a teenager while living on the Pueblo de Cochiti, a Native American tribal land located 35 miles southwest of Santa Fe, New Mexico. The art of jewelry making was a tradition in Eustace’s family and a way to keep their culture and traditions alive.

But when his mother died in 1991, Eustace found himself in the role of caretaker to his two younger sisters and he turned to jewelry-making as more than a craft: it became a livelihood.

Eustace quickly discovered that starting and running a small business while trying to support his family was no easy task. The jewelry-making tools his mother had given him were outdated and he couldn’t afford new supplies.

You gotta purchase everything when you’re doing your art, whether it’s sterling silver, stones or equipment,” said Eustace, who estimated that nearly a third of all his profits go toward purchasing supplies.

In search of financial assistance, Eustace turned to Accion in New Mexico, a nonprofit organization based in Albuquerque that offers loans to business owners and aspiring entrepreneurs using a unique credit rating system that differs from traditional banks. Accion in New Mexico is one of four members of the U.S. Network of Accion International, a longstanding pioneer in microlending based in Cambridge, Massachusetts.

Adam Frus | W.K. Kellogg Foundation

Accion granted Eustace a $2,500 loan that helped him purchase the new buffing machine and branding equipment he needed to produce his traditional style leaf jewelry and expand his business, while caring for his younger sisters. Through this financial support, Eustace is making and selling jewelry to customers around the world.

I can say I have [my] jewelry on every continent,” said Eustace. “And that’s pretty neat.”

The state’s high poverty rate— even higher among communities of color— and the challenges faced by New Mexico entrepreneurs like Eustace were the factors that led to the establishment of Accion in 1994. 

Though the state struggled with poverty and unemployment, Accion leaders believed New Mexico’s proud history of entrepreneurship set a foundation for significant small business growth if small businesses received the support they needed to get off the ground, according to Anne Haines Yatskowitz, the organization’s president and CEO.

In 1994, there was a large sector of family-owned small businesses in New Mexico with little or no access to bank capital,” said Haines Yatskowitz. “In a collaborative effort with Albuquerque community leaders, we created an enduring resource for local entrepreneurs to access the capital they need to build and grow their businesses.”

Success stories like Eustace’s are plentiful in Accion’s 20-plus year history due to the organization’s focus on promising small business owners who are often unable to obtain a traditional bank loan, she added.

While traditional lenders may rely on criteria like credit score and collateral to determine credit-worthiness, Accion’s “character-based” lending approach also looks at the strength of an applicant’s business plan, his or her ties to the community and reference checks.

This lending approach has been critical in providing greater access to capital for emerging entrepreneurs and helping to create new jobs in New Mexico. 

In the past 20 years, Accion, which has grown to serve entrepreneurs in five states, has made 9,515 loans totaling more than $83 million. They have also financed more than 6,200 businesses that have created or sustained nearly 12,165 jobs throughout the Southwest region. In 2014, Accion boasted a 97 percent loan repayment rate— a reflection of the character and commitment of its clients.

The organization’s efforts are part of a larger strategy in Albuquerque to stimulate business growth and job opportunities among city residents by connecting business owners to funding sources, tax credits and training programs.  Data has shown that for every 1 percentage point increase in the rate of entrepreneurship in a state, there is a 2 percent decline in poverty.

With an investment from the W.K. Kellogg Foundation, Accion now has plans to fund an additional 400 loans in the next decade, totaling some $1.8 million for economically-vulnerable entrepreneurs of color in three area counties as well as in the 23 federally-recognized Native American tribes, nations and pueblos in New Mexico.

The best path for economic mobility in any city is to help individuals from underrepresented communities become successful business owners,” said Gary Oppedahl, director of the Economic Development Department for the City of Albuquerque.

Valerie Isenhower | W.K. Kellogg Foundation

According to a study by the Small Business Administration, entrepreneurs of color often find it more difficult to secure funding for their businesses than their white counterparts, typically pay higher interest rates on loans and are more likely to be denied credit.  Considering that Latinos and Native Americans collectively comprise a majority of the state’s population, the opportunities provided through Accion are helping to level that playing field.

For many entrepreneurs like photographer Valerie Isenhower, a loan can provide more than a leg up to launch an idea: it can provide the opportunity to expand a business into a new venture altogether.

As with Eustace, Isenhower initially came to Accion three years ago when she couldn’t afford supplies for her photography business and didn’t qualify for a traditional bank loan. The assistance helped her participate in her biggest revenue-generating event of the year— the Albuquerque International Balloon Fiesta, also known as the most photographed event on earth.

However, she had bigger plans.

Isenhower returned to Accion for a loan to cover her share of “Genuine Southwest Art & Gifts,” an art gallery she started with nine artists in 2013. All the artist-partners sell their artwork from the gallery, which has since grown to 32 artists.  Like Isenhower, many are single women who are now able to better support their families, she said.

For us as single women, being able to have a business and having Accion be a big part of that is life-changing,” said Isenhower, who has gone on to become a donor to Accion and help other entrepreneurs realize their dreams. “A loan does make a difference.” 

Grant Details

ACCION New Mexico

Albuquerque, New Mexico, United States

Improve economic security of economically vulnerable entrepreneurs of color, particularly families, in New Mexico’s target counties/tribes by providing a program-related investment to finance small business loans

Secure Families
July 30, 2015 - July 31, 2025
$1,000,000

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“Empleen el dinero del modo en que crean conveniente, siempre y cuando promueva la salud, la felicidad y el bienestar de los niños.” - Will Keith Kellogg

“Sèvi ak lajan an jan w vle depi se sante timoun, byennèt timoun ak kè kontan pou timoun w ap ankouraje.” - W.K. Kelòg