NextBillion - An Initiative of the William Davidson Institute at the University of Michigan

Many studies and media reports seek to shed light on the state of U.S. small business, but few reports focus on very small businesses—those with five employees or less. It’s an unfortunate oversight, since these businesses represent over 90 percent of all small businesses in the U.S. (according to the Association for Enterprise Opportunity.) Accion’s mission is to give these small business owners, who we call “everyday entrepreneurs,” the opportunity to access affordable financial services to help grow their businesses.

In our relationships with clients, knowledge flows both ways. As economic drivers in their communities, these small businesses have valuable perspectives on entrepreneurship and the economy. Accion’s Orange Book is a compilation of quantitative and anecdotal data that has been sourced from these everyday entrepreneurs.

Several themes emerged during the course of researching and writing The Orange Book, including the role of immigrants who, in Phoenix, for example, represent nearly a third of the small business population, and women-owned businesses that, in San Diego for example, are thriving in a rejuvenated economy.

While the stories compiled in the first quarter of this year are strong and optimistic, these everyday entrepreneurs have learned from experience that past performance is no guarantee of future results. As Paul Quintero, CEO of Accion East puts it, “Accion clients are the canary in the coal mine, because they operate on much thinner margins than even those described in the media as small businesses, but who might have upwards of 500 employees. With five or fewer employees, these very small businesses experience the impact of an economic slowdown not only earlier, but more deeply, than their larger counterparts.”

Industry experts interviewed for the Orange Book agree that small businesses that did survive the Great Recession are stronger than ever. That certainly seems to be the case with Mary Stapleton, the sole proprietor of a San Diego electrical company called Miss Sparky Electric. An electrical apprentice with plenty of work during the housing boom, Mary used the layoff she experienced when the housing bubble popped to get her contractor’s license and strike out on her own. A slow first year and only a handful of clients didn’t shake Mary’s resolve, and since 2012, San Diego’s strong housing market has translated into an increased workload that has her looking to hire another full-time electrician to keep up with demand.

Resilience is also a hallmark of everyday entrepreneurs in Phoenix, Denver and San Antonio, where very small business owners have been able to pay down debt and secure access to credit through mission-based lenders like Accion.

While the tightening in lending and investment that became so evident during the recession years has loosened a bit for larger businesses, very small enterprises and start-ups continue to struggle to find the capital they need to start or grow. We are pleased to be able to give voice to the successes scored by those who have been able to access capital through Accion, and put it to work.

Fittingly, 2014 marks Accion’s 20^th anniversary in the United States – that’s two decades of service with hardworking entrepreneurs who are seeking to grow their businesses, establish better lives for their families, and contribute to the prosperity of their communities. Over the past twenty years, we have lent nearly $394 million through 48,000 loans to enterprising business owners and provided business advisory services to over 400,000 businesses. We have learned that these everyday entrepreneurs are visionaries and risk-takers who are fueling our country’s economy. And they’re doing it with a $10,000 loan.

I invite you to read The Orange Book here.

Gina Harman is the CEO of Accion’s U.S. Network, the only nationwide microfinance and small-business lending network in the United States.