Credit Enhancement Loan

With our credit enhancement loan, we see refugees go from no credit score to a score of 660 with six months of on-time payments. With this track record established, we can then offer the refugee entrepreneur a larger loan and eventually help them get bank financing and qualify for other financial products like mortgages.              - Yanki Tshering, Business Center for New Americans

In 2003, recognizing the importance of credit building, the Business Center for New Americans (BCNA) began offering a credit enhancement loan, designed to assist its foreign-born clients in New York City with little or no credit in establishing a credit profile. This $500 has proven to be an important starting point for many new Americans. BCNA has seen refugees go from no credit to a 660 credit score in 6 months. However, reporting credit did not come without problems. After 3 years of working unsuccessfully with the credit bureaus to report their credit, BCNA joined CBA and now see data show up on their clients' credit reports. 

BCNA has established a streamlined and efficient process for offering small loans. Staff at BCNA have the ability to approve loans up to $2,000 without going through the formal underwriting process and loan committee. The credit enhancement loan application is typically submitted by one staff person and reviewed by another. This staff approval process means the loan can be approved in one day and the closing can be held within 3 business days.

BCNA's Long Path to Reporting Data

Prior to joining CBA, BCNA faced many challenges to reporting data. After many conference calls and meetings with Equifax staff, BCNA was able to report to Equifax and so began offering $500 credit enhancement loans to small business clients who had no score or limited credit. After 6 months, BCNA reports score increases up to 660. However the data was being reported through an intermediary that was often unreliable and insisted that they had no control over the data registering once they submitted the data. What this meant was that every quarter, the BCNA staff would send the data but there was no assurance the updated scores would register. Finally BCNA requested permission to report directly to Equifax and were told that they had to get the data converted to metro II format. BCNA spent several months commissioning a software company to develop a program to enable the conversion however before the program could be used, Equifax officials said it was taking too long so they could no longer accept the data from BCNA.

 

The Business Center for New Americans in New York City is a division of CCDNA and formerly known as the NYANA Business Center, which was started in 1997 and is dedicated to helping immigrants, refugees, and others in need to achieve self-sufficiency and gradual wealth creation. Since 1997, BCNA has made 706 loans for a total of $6.48 million dollars and provides workshops and one-on-one advice to over 450 businesses a year.