2014 Annual Report Final

Annual Report 2014

Table of ContentsTable of ContentsTable of ContentsTable of Contents

3 From Our CEO4 From Our Founder5 Who We Are6 Five Years of Forza8 Expanding Our Reach9 Recent News

10 Our ClientsIndustries Served11

12 Quick Facts 13 Forza Alabama14 Board of Directors15 Forza Staff 201416 Thank You!

Community Partners17

From Our CEO

As one of Forza’s oldest members, it is amazing to me how far we’ve come from our first year in 2009. My first day at Forza was the same day we launched our first website. Now, redesigning and revamping the website is just one of the many tasks I am managing this semester. While our quick pace has not slowed since our beginnings, the professionalism of our projects has grown to reflect our growth as an organization. The caliber of our student workers continues to increase, and our geographic impact continues to expand.

It is immensely inspiring to work with such talented and dedicated students. They are the key to our success, and our accomplishments reflect their hard work. In the past year, we have written 50% of our entire loan portfolio, and our business coaching and workshops continue to improve and grow in attendance. For me, our most exciting and rewarding accomplishment of this year has been the writing of two loans in Marion County, Alabama this past summer. These loans represent fulfillment of the original vision of Forza’s founders, who started Forza in order to write loans in Marion and other Black Belt counties. I am extremely proud of our students who took the initiative in this effort and hope that we will continue to build our relationship with Black Belt communities.

I am proud to present this annual report as a representation of the impact Forza has made not only in 2014, but over the past 5 years as well. However, our work does not stop with these accomplishments. These milestones only make us hungrier to do more in our community, and I am extremely confident that our mindset of service will continue to guide our next wave of leaders to achieve even bigger and better goals. As always, we remain committed to the work of learning from feedback, serving with passion, and growing in impact as an organization dedicated to financial inclusion, community empowerment, and service leadership.

My immense gratitude to our students and the many professors, donors, community partners, and general supporters who make our work possible. Together, we are committed to building a better Alabama, one small business at a time, and I am confident that this mission will continue to guide Forza’s work and its leaders through many more years of impact.

Towards a better Alabama,

Written by our CEO, Katherine McLarney

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From our Founder

Reflecting on my days as a student in Forza, I truly understand how valuable our work has proven to be. I remember being a college freshman on a trip to the Black Belt (a minority-majority region internationally renowned for its high levels of poverty and inequality) with the intention of exploring the economic challenges of the area. The need for financial inclusion in these rural communities materialized in front of me as we walked into the local bank. Marbled floors, tall ceilings, and elaborate wood paneling stood out in stark contrast to the rest of the buildings in town, and there was no individual in the building who looked at all like the majority of the town’s population. Clearly, this bank was not set up to serve the majority of its community.

Motivated by this encounter, some other Honors students and I had the idea to start a microfinance organization and write a microloan within 6 months. With that in mind, we founded Forza Financial in 2009. Writing at least one loan was one of our three objectives as an organization—one loan that would still make a huge difference in one person’s life, not to mention the lives of their family members and employees. After two years of hard work, we wrote our first loan to a local entrepreneur, whose story from Forza made headlines across the state. Today, Forza has written a total of 12 loans—6 in the past year and 2 to individuals in the Black Belt.

Our second goal was to prove that microfinance could be commercially viable. Forza comes closer to this goal with each new loan we write and each new business we help. Each entrepreneur’s story adds another building block to the credibility of our organization.

We set a third goal to make Forza’s loan portfolio self-sustainable without having to depend on donations. Forza took a huge step towards this goal this year when we received official 501(c)(3) status, which has accelerated our donation and underwriting processes. Forza also continues to boost its grant-writing efforts in order to build up its financial capital. These steps towards self-sufficiency give me confidence that Forza will accomplish this goal in the near future.

With the progress the organization has made in the past five years, Forza has earned a spot in the discussion about microfinance in the U.S., and our impact continues to shape students into the leaders of the future. Forza is not done leaving its mark on the microfinance industry and on the world for the cause of economic justice.

With anticipation for the future,

Written by our founder, David Bailey

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Who We Are

Since our first loan in April 2012, Forza has continued to promote community growth and the economic development of small businesses in Alabama. Because of our microfinance lending model, these local businesses with little to no access to funding are able to grow and expand.

We also offer educational support to encourage financial literacy among our clients and throughout the community. These workshops and business coaching sessions make us unique.

As Forza continues to grow, we hope to see more strong businesses lead to strong leaders and an even stronger community.

Forza Financial: Building a better Alabama, one small business at a time.

Our Services

Business LoansOur small business loans from $500 to $5,000 help local entrepreneurs take their businesses to the next level.

WorkshopsOur workshops cover a wide variety of business and legal concepts to satisfy every borrower’s entrepreneurial curiosity.

CoachingOur one-on-one coaching sessions provide personalized insight to entrepreneurs looking for guidance.

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Five Years of Forza

September 2010Forza is founded! We receive funding to start our organization.

January 2011First Class

The staff gathers for the first time to discuss

company strategies.

April 2011Website LaunchForzaFinancial.com goes live. Our customers can access information about our services more easily.

October 2011Forza joins Lend for AmericaThis opens up opportunities to network with and learn from other campus MFIs.

January 2012First Marketing Efforts We begin to advertise our services to find Forza’s first clients in Tuscaloosa.

March 2012Our First ClientJust 6 months after our inception, Katrina applies for a loan for her small business.

April 2012Our First Loan6 weeks later, Katrina is approved for a loan to help rebuild her beauty salon that was destroyed by the 2011 tornado.

September 2012Internship Program

Forza increases the rigor of selecting employees for

our organization. All full-time staff members

are now required to first complete a semester-long

internship.

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December 2012Business Plan CompetitionForza wins the UA Business Plan Competition.Part of the prize is a new office space in Downtown Tuscaloosa.

January 2013Academics Department

Created Forza adds this department to develop innovative ways

to teach our clients how to improve their businesses.

April 2013First Workshop

The Academics Department hosts its

first event, focused on teaching clients about

guerilla marketing tactics.

August 2013Banking on Youth GrantForza employee Bethany Carter (right) applies for and wins this nationwide grant, gaining $10,000 to contribute to our loan capital.

December 2013 First Coaching SessionForza’s Academic department introduces this new service to one of our clients.

May 2014Awarded 501 (c)(3) Status

After years of hard work, Forza finally achieves 501 (c)(3) status.

We can’t wait to see how this will help us grow in the future!

June 2014Summer in MarionTwo Forza employees spend their summer in Marion, AL writing two loans and helping expand Forza’s geographical reach. (see page 10)

June 2014Successful CoachingOur Business Coaches have a successful summer when one of their sessions helps a client write a $10,000 contract.

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Expanding Our Reach

We would be lying if we said we felt perfectly prepared. We were heading into new territory, with no clients, no large network, but with a lot of goals and hope. As we left the comfort of Tuscaloosa and headed into the unknown Marion, we quickly realized that, while the clients were different and the town was smaller, microfinance is an innovative quest that can vastly change lives, businesses, and families anywhere—even in rural Alabama.Caroline Morrison and I spent three weeks in Marion, Alabama, often known as the “Black Belt,” working on economic development. Our overarching goal was quite simple—to best serve companies’ needs using Forza’s resources, whether that be business coaching, workshops, or capital. Marion, an impoverished town, had many small businesses and local entrepreneurs looking for capital—whether that be used for a start-up business, expansion, or advertising.Speaking with other Loan Officers, Caroline and I had high expectations that our work in Marion would impact our clients. We were offering services that could affect their businesses and help them achieve their dreams. What we didn’t expect, however, was for the people of Marion to so deeply affect us. As we met with city leaders, parents, business owners and built relationships, we were investing in something so much greater than just a company. We were learning about their families, career aspirations—we were investing into the future of families and small businesses.After following with leads and advertising through the grapevine, Caroline and I were able to write two loans. Our first loan was written to Bessie: a passionate, caring, well-respected daycare owner. Bessie ran a very successful daycare, but had no advertising or signs outside to showcase her services. Bessie used her $2,000 loan for signs and advertising, as well as playground equipment for the children. This was a great loan to write, because successful advertising will increase her revenue, making it practical for her to pay back the loan every month. Our second loan, also $2,000, was to Yolanda. Yolanda was starting up a hair salon and needed some extra capital to make the push to open her salon on time. Since writing our loan to Yolanda, she was able to successfully open her salon on time, with all of the proper equipment. This was the first time Forza had dipped its feet into rural microfinance and explored an entire new world of small town businesses, struggles, and dreams. It is a monumental step in impacting a new culture and new clients. It is exciting, innovative and sustainable. Small towns are made for small businesses, and Forza is made to help and partner with small businesses. Sounds like a perfect match to me.

This student perspective was written by Erica Boden, a member of Forza’s Finance Department and a sophomore at The University of Alabama.

“It is a monumental step in impacting

a new culture and new clients.”

8Erica Boden, Bessie, and Caroline Morrison

In Recent News

501 (c)(3) Status

Successful Business Coaching

Forza Financial is proud to announce that as of August 25th, we have been granted official public non-profit and tax-exempt status under Section 501(c)(3) of the Internal Revenue Code. Contributions to the organization are therefore fully tax-deductible from this point forward.

Having 501 (c)(3) status will go a long way towards accelerating our work, because Forza is now eligible for many government and foundation grants as well as other resources available to tax-exempt nonprofits.

Forza’s Tax Id is 45-376-0599.

A year ago, our Academics Department developed a great new way for us to connect with entrepreneurs in the community. Six months later, those Business Coaching sessions reached a new high helping one of our clients. This special session was scheduled to help our client improve her knowledge of accounting, marketing, and other general business practices. Equipped with these skills, she returned to her cleaning services, better prepared to expand her business.

As of today, we couldn’t be happier to announce that, as a result of these new skills, our client was able to secure a $10,000 contract with a local church. This contract has given our client hope that she will be able to grow as a local entrepreneur by securing additional contracts of similar size.

Success like this resonates immensely with Forza’s key mission to build a better Alabama, one small business at a time. We look forward to helping more clients like this in the future!

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Our ClientsOur ClientsOur Clients

Tuscaloosa Beauty Salon (Our First Loan) $3500 at 20% Written April 2012, paid in full

Beauty Salon $650 at 11% Written July 2012, paid in full

Personal Services $500 at 16% Written October 2012, paid in full

Public Relations and Entertainment $3500 at 16% Written October 2012, paid in full

Retailer $2500 at 13% Written June 2013, paid in full

Retailer $500 at 20% Written December 2013 To be paid in full November 2014

Automotive Accessories $3500 at 16% Written February 2014 To be paid in full October 2015

Cleaining Service $1000 at 18% Written March 2014 To be paid in full March 2016

Cleaning Service $1000 at 18% Written September 2014 To be paid in full December 2015

Marion (Perry County) Day Care $2000 at 16% Written in June 2014 To be paid in full June 2015

Cleaning Service $2000 at 15% Written July 2014 To be paid in full December 2015

Birmingham (Jefferson County) Mobile Food Service $4000 at 17% Written November 2012 To be paid in full November 2014

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Industries Served

Beauty Salon

PR/Entertainment

Cleaning

Food Service

Retail

Automotive

Day Care

Our clients represent a wide variety of businesses in the Alabama community.

Marion (Perry County) Day Care $2000 at 16% Written in June 2014 To be paid in full June 2015

Cleaning Service $2000 at 15% Written July 2014 To be paid in full December 2015

Birmingham (Jefferson County) Mobile Food Service $4000 at 17% Written November 2012 To be paid in full November 2014

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Quick Facts

12 Loans Written

Since 2012

5Loans Written

in 2014

$24,650Total Value of Loans Written Since 2012

16Average

Interest Rate (%)

Coaching Sessions20 in 2014 21 Total

Workshops4 in 2014 9 Total

$500 $5,000

$2,050Average Loan Amount

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Forza Alabama

Forza Alabama is a student group on The University of Alabama campus that exists to educate students and faculty members on the topic of domestic microfinance in the United States. The two main branches of Forza Alabama include our Forza class, as well as a microfinance awareness program.

The Forza Alabama class meets once a week to discuss issues in our community, how we can position ourselves to make a bigger impact, and to hear from motivational speakers on various topics. The class also serves to provide students with the skills and tools they need to succeed in the workplace.

Curriculum includes: • Underwriting a loan • Creating and interpreting a SWOT situation analysis • Solving business problems • Building a better resume • Determining your Myers Briggs personality type • Choosing which path to take after graduation • Exploring social entrepreneurship as a career

Forza Alabama also holds events on campus to educate others about microfinance and encourage them to join our efforts. During the month of March, Forza Alabama participates in Month of Microfinance, a worldwide awareness campaign.

Outreach efforts include: • Campus movie screening • Social media campaign • Fundraising events at local businesses

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Board of DirectorsBoard of Directors

David BaileyFounder and Editior-in-Chief, yBitcoin Magazine

Co-Founder and Former CEO, Forza Financial

Matt MillerFinancial Analyst, BBVA Compass

Co-Founder, Forza Financial

Katherine McLarneyCurrent CEO, Forza Financial

Dr. Jacqueline MorganAssociate Dean, The University of Alabama Honors College

Alex MurrayPh.D. Candidate in Strategic Management, University of Washington

Co-Founder and Former CEO, Forza Financial

Dr. Shane SharpeDean, The University of Alabama Honors College

Jim TompkinsPrincipal, Tompkins & Company

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Forza Staff 2014

Katherine McLarneyChief Executive Officer

John OberkorChief Operations Officer

Jordan TuckerChief Communications Officer

Lauren DonoghueChief Investments Officer

Matt GillhamChief Financial Officer

Peyton HicksChief Academic Officer

Bethany CarterCommunications

Caroline MorrisonInvestments

Corey CialeoInvestments

Erica BodenFinance

John HudsonInvestments

John-Cole GarwickAcademics

Kelly KohlmanOperations

Kirstin BalavenderAcademics

Laura GregoryInvestments

Leighton WilsonOperations

Meghan DornCommunications

Todd CreekmoreAcademics

Jacqueline YuCommunications

Zac AdamsFinance

Not pictured: Alexis Unger, Andrew Parks, Austin Yokley, Forrest Hames, John Deeble, Katie Plott, Katlyn Pauvlik,

Nicolas Vaughn, Paul Erhardt

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Thank You!

Donors

Mr. and Mrs. Charles BaileyEdwin and Rhonda Childress

Michael and Jill DardickSusan and Scott Griffin

Barron HardisonKaren and Joe Jasper

Mike LeeBilly Joe Lewter

Dr. John McLarneyBarry and Brenda Olson

Mary SullivanBrad and Raquel TuckerGary and Judy Tucker

Blake and Audrey WaterhouseLinda Waterhouse

We would not be where we are today without the help of our generous supporters. Because of your contributions, we are able to continue lending support to small

businesses in the Alabama community.

As a result, we can all continue to build a better Alabama, one small business at a time.

Workshop Speakers

Joe CalamusaSusan Fant

Allen HenryGorman Houston

Chris LewisLou Marino

Lisa McKinneyDr. Rob Morgan

Bill Petty

Thank you UA professors and Tuscaloosa business professionals for

speaking at our workshops!

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Community Partners

Culverhouse College of Commerce and Business Administration

The University of Alabama Business School housed our first ever Forza office. They now sponsor The Edge, where our office is currently located. Many of our workshop speakers are Culverhouse instructors, and the college also helps fund our annual trip to the Lend for America Summit.

Tuscaloosa Credit UnionTCU has supported us by helping us with our operational expenses as well as by sponsoring many of our small business workshops. This partnership has allowed us to reach more entrepreneurs in the

Tuscaloosa community.

The University of Alabama Honors CollegeOne of our first offices was located in Nott Hall, home of the Honors College. After outgrowing this space, the Honors College continues to support us by housing our Forza Alabama University Honors class. The

Honors College also helps fund Forza’s trip to LFA.

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Thank you for your continued support

and Roll Forza!Contact Us800 22nd Avenue

Tuscaloosa, AL 35401205-210-8083

[email protected]@ForzaFinancial