AV1 Group, Inc. Initiates Discussion to Finance Graduating Entrepreneurs in Mexico
NEW YORK, Feb 2, 2011 (GlobeNewswire via COMTEX) -- AV1 Group, Inc. (Pink Sheets: AVOP) ( www.av1group.com ) announces today that while in Mexico this week, AV1 Group execs met with the head of the Center for Business Incubation & Development at a local University.
The company has identified a virtually untouched sector in microloan offerings with graduating entrepreneurs as the University is seeking to form strategic alliances with Companies who will guarantee and/or offer loans to graduating students who are in the process of launching businesses. Although specifics of the deal cannot yet be released, the arrangement stands to benefit all parties involved.
Graduating entrepreneurs in Mexico face a dilemma in seeking capital for their start-up businesses. Banks in Mexico require guarantees in excess of three times the capital required making it almost impossible to secure small business loans. While the Center for Business Incubation & Development assists graduating students in the preparation of business & marketing plans, as well many other administrative functions, they simply cannot provide the guarantees and/or capital for all of their students needs, which typically range from $5,000 to $20,000 per business.
AV1 Group is looking to step in and help get these businesses off the ground. One AV1 Group executive stated: “While meeting with the University I was able to view a number of projects currently seeking capital and I was very impressed. I think we will be able to get in here at a critical point and turn a large number of these entrepreneurial visions into realities.”
While AV1 Group would not charge as much interest for these loans as the more traditional microfinance clients, management feels it is a great opportunity to expand the AV1 Group holdings umbrella by securing an interest in these companies. As collateral for potential loans, graduating students would pledge an equity position in their company, a portion of which they would have an option to purchase back at a future point in time. “We are looking to foster creative entrepreneurial ideas and provide not only capital but guidance and support as well. We are also looking to grow with the companies and be their number one resource for any future capital needs as well.”
“We understand the risks involved in financing start-up companies, and we have a fiduciary duty to our shareholders to make smart investments. While a significant portion of our business will still involve traditional microlending, we feel this move is in line with our overall mission as a growing holdings company. The opportunities in Mexico are immense and if we can involve ourselves at critical stages in the business life cycle we truly feel that we will not only increase our portfolio of investments by securing equity positions in emerging companies and technologies but maximize our shareholder value as well. We have an exciting year ahead and we are looking forward to releasing specifics as soon as the terms are finalized.”
New York, NY