Acrecent Financial Corp. is marking 20 years of supporting small and midsize enterprises (SMEs) in Puerto Rico. From reconstruction of post-hurricane hotels to injecting millions of dollars in underserved sectors through international alliances, James Connor, Acrecent’s CEO, said that for the first 15-years, the non-bank lender focused on “filling the gap of access to capital and credit for companies that are underserved or that banks won’t lend to because of the risks involved.”
“We want to celebrate our 20 years of doing business by doing more of what we do,” Connor said in an interview with News is my Business. “More than a celebration and patting ourselves on the back, we want to say to the small and medium businesses: If you find yourselves in a situation where something isn’t working in terms of access to capital, you have an alternative with us.”
Acrecent is a commercial finance company dedicated to providing capital to SMEs. It customizes loan and lease facilities, offering structuring flexibility to meet customer needs and support business growth.
For the first 15 years after founding the company, we had been dedicated to filling that access gap to capital and credit. From Hurricane Maria to today, we complemented our offerings by raising impact funds. We established a platform that is parallel to the business of access to credit to raise investor capital in Puerto Rico and outside of Puerto Rico to complement the capital that we already had in the impact sector, which has been growing quickly over the past 10 to 15 years.James Connor, Acrecent’s CEO
The first fund was raised in 2018, nearly a year after Hurricane Maria, and Acrecent now has four funds, two of which are from institutional investors.
“We have institutions from Sweden, London, New York and one from Washington, D.C,” Connor pointed out. “They all made their first investment in Puerto Rico through our impact funds. They are very happy and have made a difference, helping hospitals avoid bankruptcy, and some close to declaring bankruptcy. They have helped in housing development investments and reopening hotels that had been closed.”
Connor said he is convinced that Acrecent has given Puerto Rico visibility it lacked before starting these initiatives. He said the company is about to raise a fifth fund dedicated to “our mission of impact investment to address that gap that SMEs face, especially those in tough situations or that have gone through difficult situations but the banks and cooperatives are still not ready to work with.”
The CEO added that Acrecent is now a Sygnus company, and “Sygnus is the company’s main investor.”
“In 2014, we brought Franklin Templeton Investments, which is a very recognized company, and one of its funds invested almost $10 million in our company,” Connor said. “Through one of the risk capital funds, after seven years, they ask to be replaced, because that is the private equity business model. And then, at that moment, we went to the market looking for additional investors to replace them and expand capital, and that is when Sygnus joined us. They are based in Kingston, Jamaica.”
Now, after 20 years of operation, Acrecent is emphasizing the Sygnus brand, which is an alternative investment platform that also manages investment funds, and “through those funds, they bought the investment made by Franklin Templeton.”
Among Acrecent’s notable achievements is securing the financing for the former Hermanos Meléndez Hospital, which serves “over one million patients,” Connor noted.
“They reached out to us because, at the time, they told us they had not been able to receive financing to try and get someone to buy the hospital, and we achieved nailing down the financing they needed, which was nearly $35 million,” he said. “That was the first time we brought in these impact investors, institutional investors from New York and Washington D.C. and local investors, and we achieved that financing and did our job.”
The hospital is now known as Bayamón Medical Center.
“That, in my opinion, is the most relevant financing impact we have made,” Connor said.
Additionally, Acrecent helped in reopening the El Conquistador Hotel, which had closed in the aftermath of Hurricane Maria, by providing $30 million in financing.
“We got several investments and achieved for the reopening to happen, and today it is operating and we are very proud of that,” Connor said.
As for future plans, Connor said the company is focused on defining the terms for its fifth fund.
“It’s the natural progression of Acrecent’s business,” Connor added.