Since the beginning of the year, seven local businesses have worked with Flint & Genesee Economic Alliance’s Small Business Desk to take advantage of a funding resource called Kiva. Currently, two of those businesses are in the process using the crowdfunding platform – which allows entrepreneurs to raise a zero-percent interest loan – to help take their businesses to the next level.
Jacob and Ashleigh Saldaña have just under three weeks left to meet their $11,500 goal, which will help the husband-and-wife duo purchase equipment and launch an internship program at Sal’s Gym. And Ally Garrett is planning to expand her cosmetic business, NaturALLYBeat LLC (pictured), once she reaches her $2,000 goal.
To learn more about the Kiva platform, Inside Business recently sat down with Tracy Joseph, business support manager at the Economic Alliance, a division of Flint & Genesee Group, and Shaina Tinsey, assistant program officer at LISC Flint.
Flint & Genesee Group is a Kiva trustee for both Sal’s Gym and NaturALLYBeat’s campaigns. What does that mean?
Tracy: It means we vet them before they apply and support them throughout the process. Once they receive the loan, we help them stay on track to ensure they meet their repayment deadlines.
You’ve helped several businesses go through the Kiva program. What kind of impact do these loans have?
Tracy: One piece of equipment could change everything for a business. A new trailer could help a landscape business take on larger projects. More cleaning supplies could help a cleaning business take on more clients.
How does LISC fit into this?
Shaina: LISC National has a partnership with the Kiva program in which our local offices partner with trusted trustees in the neighborhood. These are organizations who know small businesses and have relationships with small businesses. So, when a trustee endorses a business, LISC will contribute matching funds, which basically accelerates how fast the campaign will fully fund.
What are common misconceptions you see around this program?
Tracy: On the borrower end, they question its legitimacy. There’s no closing costs. No origination fees. No attorney fees. And the loan is sometimes funded by people they don’t even know. They think it’s too good to be true. But it is true – it’s an amazing program.
Shaina: On the lender sider, I think there’s a perception that this is similar to GoFundMe in that this would be a donation. However, this is a loan. When the borrower makes repayments, you receive those payments back into your account. At that point, you can collect your money or redeploy it into future campaigns of other small businesses.
What else should potential lenders know?
Shaina: The minimum loan amount is $25. If there’s a local business that you believe in and want to support, $25 is a relatively low risk amount to contribute. I would recommend creating an account and just looking around to see what’s out there. Also, join the Flint Vehicle City Kiva team because when you’re connected to that team, you’ll get notified about new campaigns that are looking for local support.