Accion client Anthony Bellamy of Chicago is featured in a Forbes article today, “Why Online Small Business Loans Are Being Compared to Subprime Mortgages,” which highlights the lack of transparency for borrowers in online small business lending, particularly with regard to APR (annual percentage rate).
Bellamy, owner of Capital Refrigeration & Equipment Specialists, took out a loan from OnDeck in a moment when his business was rapidly expanding and he needed capital. He ended up struggling with repayment, as OnDeck took daily payments via ACH at an APR rate of 62% – which was not clearly revealed to him at the time of the loan. Today, Anthony has a loan with Accion with an APR of 23%. The article also discusses the Small Business Borrowers’ Bill of Rights, of which Accion is a coauthor and signatory.
To read the full article click here.