The first place I recommend companies go to for business loans
What Is Kiva?
Kiva started as a global source for micro-loans to women in developing countries. It’s since expanded, but the premise remains the same—empower small business owners to succeed. In the US, small companies can raise up to $25,000 in loans at 0% interest. (0%=free money). You can’t beat that!
How to Get Started with Kiva
Loans are funded and completed by backers who resonate with a particular business. (Yes, this means its a crowd-sourced loan.) First you need to set-up your profile and tell your compelling story. What’s your backstory? Why do you need this money? What will you do with it? How will it benefit people? Be specific.
Then ask a trustee (like me) to endorse you. Follow this link to get started.
You’ll start your campaign by asking your friends or family member to back your campaign for $25 or more, which you will repay. For loans up to $10,000 Kiva will require you to recruit the first 20 to 30 lenders for your campaign. If you set a higher goal of up to $25,000 you’ll have to recruit 65 backers for your loan.
Once you’ve reached that threshold Kiva will publish your campaign on the site and you can start promoting it via social media and other outlets. The more support you build, the higher your campaign will be featured on the site and the faster it will get funded.
The companies I’ve backed have literally received loans from people all over the world.
Kiva also has grant support from other financial institutions and often offers significant matching funds to help you fund your loan. For example, you could benefit from a 1:1 matching grant which would mean $2 increase in your loan with each $1 you raise.
A Great Example:
In fall 2016, my client Bibber and Bell wine shop raised $10,000 on Kiva so they could expand inventory in advance of the holiday season. Not surprisingly, this is the high season for wine and liquor purchasing; owners Damian and Robyn knew that any wines they were able to purchase in September would sell quickly, allowing them the cash and profits to continue increasing their wine purchases through the end of the year. 16 months later and Bibber and Bell have repaid almost half of their original loan.
"After a difficult year, the Kiva loan really breathed new life into our wine store. We are a neighborhood shop with most of our business coming from regulars that stop in a few times a week. The fact that this loan came from their participation made it really satisfying to be able to give them a bigger selection the next week after the loan was funded. It was a tangible improvement that all of us, employees and customers, felt proud to be a part of and it has made our community that much more tight knit. "
-Damien Graef, Bibber & Bell
Why I recommend Kiva:
Banks and other business lenders often will not make loans to businesses that are less than two years old. And if they will, the rates and terms are often very high. Plus, lenders will look closely at the credit history of the business owners, and often require a personal guarantee for the business loans. This can be an extra road block for small companies or business owners without a stellar personal credit history. Kiva looks at your willingness and ability to recruit people you know to lend money to you as proof of your creditworthiness - and it works! Overall Kiva has a 97% repayment rate for its small business loans.
For businesses that are short on cash a Kiva loan is often the fastest and cheapest way to raise the needed funds. Plus, while paying back your loan on Kiva you’ll actually be building a stronger credit history for your business -- which means better terms when you do apply to more traditional lenders.
Visit Kiva.org to learn more.