Accion Opportunity Fund Community Development

TO DELIVER AFFORDABLE CAPITAL AND RESPONSIBLE FINANCIAL SOLUTIONS (SEE SCH. O FOR CONTINUATION) TO UNDERSERVED ENTREPRENEURS AND COMMUNITIES, WITH A SPECIAL FOCUS ON LOW-INCOME PEOPLE, PEOPLE OF COLOR, AND WOMEN.

SMALL BUSINESS LENDING PROGRAM - THE ORGANIZATION MAKES LOANS TO SMALL BUSINESSES THAT LACK ACCESS TO AFFORDABLE CREDIT FROM TRADITIONAL SOURCES. SINCE INCEPTION, THE ORGANIZATION HAS MADE OVER 22,000 LOANS TOTALING $625 MILLION TO SMALL BUSINESSES WHOSE OWNERS ARE PRIMARILY PEOPLE OF COLOR AND/OR LOW TO MODERATE INCOME. MANY LOANS TO CALIFORNIA-BASED BORROWERS ARE ENROLLED IN A LOAN LOSS RESERVE PARTIALLY FUNDED BY THE STATE OF CALIFORNIA AS PART OF ITS CAPITAL ACCESS PROGRAM.BEGINNING IN JUNE 2020, IN RESPONSE TO COVID-19, THE ORGANIZATION BEGAN OFFERING LOWER COST LOANS WITH INTEREST RATES FROM 4-4.25% TO SELECT BORROWERS WHO WERE SEVERELY IMPACTED BY COVID-19. THE ORGANIZATION ALSO BEGAN PARTICIPATING IN SELECT PUBLIC-PRIVATE PARTNERSHIPS THAT OFFER LOW-RATE LOAN PROGRAMS. THESE LOANS ARE TYPICALLY BACKSTOPPED BY A LOAN LOSS RESERVE PROGRAM ADMINISTERED BY A GOVERNMENT PROGRAM AND SOLD TO A SPECIAL PURPOSE CREDIT VEHICLE WHERE ONLY A PORTION OF THE LOANS, TYPICALLY 5-10%, REMAIN ON THE ORGANIZATION'S STATEMENT OF FINANCIAL POSITION.IN APRIL 2020 THE ORGANIZATION WAS APPROVED AS A PAYCHECK PROTECTION PROGRAM ("PPP") LENDER BY THE U.S. SMALL BUSINESS ADMINISTRATION. THIS PRODUCT FOR SMALL BUSINESSES RANGES IN SIZE BASED ON THE PAYROLL OF THE COMPANY, HAS A 1 % FIXED INTEREST RATE, AND MAY BE FULLY FORGIVABLE IF THE FUNDS ARE USED FOR AN ELIGIBLE PURPOSE.THE ORGANIZATION SELLS PARTICIPATIONS IN ITS LOAN PORTFOLIO TO A FEW INSTITUTIONS. THE PURPOSE OF THESE SALES IS TO MANAGE CREDIT CONCENTRATION IN THE ORGANIZATION'S PORTFOLIO AND TO GENERATE LIQUIDITY TO PROVIDE FOR ADDITIONAL LOAN GROWTH. LOANS ARE TYPICALLY SOLD AT A PREMIUM OVER FACE VALUE AND THE ORGANIZATION RETAINS THE SERVICING OF THE LOANS, FOR WHICH IT CHARGES A MONTHLY FEE.THE ORGANIZATION USES A GLOBAL SERVICE PROVIDER TO ASSIST WITH SOME OF ITS LOAN ORIGINATIONS AND SERVICING FUNCTIONS. THE GLOBAL SERVICE PROVIDER PERFORMS THESE FUNCTIONS OUTSIDE THE US AND HAS INDUSTRY APPROPRIATE BUSINESS CONTINUITY PLANS IN PLACE. AOFCD DOES NOT HAVE ANY EMPLOYEES OR ASSETS OUTSIDE THE US.

NEW MARKET TAX CREDITS PROGRAM - IN 2003, THE ORGANIZATION WAS CERTIFIED BY THE U.S. DEPARTMENT OF TREASURY COMMUNITY DEVELOPMENT FINANCIAL INSTITUTION FUND ("CDFI FUND") AS A COMMUNITY DEVELOPMENT ENTITY ("CDE") UNDER ITS NEW MARKET TAX CREDIT ("NMTC") PROGRAM. AS OF JUNE 30, 2021, THE ORGANIZATION HAS RECEIVED A CUMULATIVE TOTAL OF $388 MILLION OF TAX CREDIT ALLOCATIONS. THE ORGANIZATION THROUGH ITS SUBSIDIARY CDE, THE LCD NEW MARKETS FUND, LLC USES THESE ALLOCATIONS TO ATTRACT NEW CAPITAL TO SUPPORT LARGE REAL ESTATE PROJECTS PROVIDING HIGH COMMUNITY IMPACT IN LOW INCOME AREAS. AS OF JUNE 30, 2021 AND 2020, THE ORGANIZATION HAS DEPLOYED $388 MILLION AND $377 MILLION IN QUALIFIED EQUITY INVESTMENTS ("QEIS"), RESPECTIVELY.

POLICY PROGRAM: ACCION OPPORTUNITY FUND CONDUCTS PROGRAM EVALUATION AND RESEARCH AND ADVOCATES FOR FEDERAL, STATE AND LOCAL PUBLIC POLICIES THAT WILL BENEFIT OUR MISSION AND THE WORKING FAMILIES THAT OUR PROGRAMS SERVE.