Small businesses are a major dynamo of innovation and growth in our economy—they make up more than 99 percent of U.S. enterprises and create two out of every three new jobs. A partnership between LISC and the crowdfunding platform Kiva is connecting small business entrepreneurs across the country with the capital and knowhow they need to succeed.
For many small business owners, finding the right partners can be challenging, and financial resources are often inaccessible. This is especially true for emerging and minority business owners in the communities where LISC works.
One way LISC is bridging this resource gap is through a national partnership with the crowdfunding platform Kiva. For the past three years, local LISC offices have used this online tool to deliver technical assistance with small business financing to emerging entrepreneurs. LISC’s work with Kiva has already resulted in 104 loans for new microbusinesses ranging from catering and clothing to fitness and farming.
The rationale for supporting crowdfunding platforms like Kiva is rooted in LISC’s commitment to empowering entrepreneurs who have been overlooked by traditional financing channels. By providing flexible loan options and business knowhow, LISC is driving capital to entrepreneurs in underserved neighborhoods and connecting them to critical technical assistance providers. Kiva also enables businesspeople to develop their own funding networks while encouraging ordinary residents to become part of those networks.
To make this happen, many LISC offices have enlisted local partners to become “Kiva Trustees.” Trustees are organizations or individuals who endorse the entrepreneur’s Kiva fundraising campaign page. They serve as both cheerleaders and coaches who help the borrowers reach their crowdfunding goal.
Moreover, LISC and its subsidiary, the New Markets Support Company, have set up a one-to-one match fund that helps business owners reach their crowdfunding goal in less time than the process normally takes. To date, LISC has invested more than $200,000 in matching dollars to local entrepreneurs, resulting in $632,000 in loan capital. Similar LISC-sponsored loan match funds to support Kiva borrowers have launched in Boston, Los Angeles and the City of Long Beach.
In Boston, for example, LISC’s partnership with Northeastern University, the Impact Lending initiative, has provided $77,350 in matching funds generating $165,500 in loan capital, and 12 trustees have supported 27 local businesses to get up and running.
Commonwealth Kitchen, a LISC Boston partner and registered Kiva Trustee, endorsed Heather Yunger’s $5,000 loan request to grow her business, Top Shelf Cookies. Taking advantage of the one-to-one LISC loan match, Yunger met her crowdfunding goal and used the financing to acquire a wholesales license, create a new logo and buy labels and packaging.
In Los Angeles, meanwhile, LISC has raised a $100,000 Kiva match fund from Pacific Premier Bank to support businesses in LA County and the City of Long Beach. Since July 2017, LISC has supported six Los Angeles small businesses gain access to $21,000 in loan capital.
Futhermore, through a partnership with the City of Long Beach Economic Development Department, LISC will be sponsoring the City of Long Beach as a designated “Kiva City". The initiative entails inviting local non-profits and BIDS to be trustees, deploying capital to local entrepreneurs, and encouraging residents to become Kiva lenders. The first borrower in the Kiva City Long Beach initiative is set to open their business this month.
In fact, LISC is helping people access flexible microfinancing through Kiva loans all over the country. Take Candice Schibli, a Virginia native who was inspired by the developing coffee scene in Washington D.C. She decided to combine her background in engineering and sustainable development with a passion for food and people, and in 2016, she launched her wholesale coffee business, Southeastern Roastery.
But Schibli encountered barriers to fundraising and capital as a black, female entrepreneur breaking into a saturated market. “I think that by not coming from a large personal finance pool has made it a bit of a slower start,” Schibli said. “But that’s when networks and programs [like Kiva] are really important.”
In April, Schibli worked closely with staff at LISC DC to apply for a $10,000 Kiva equipment loan. She met her crowdfunding goal in just 12 days, and attributes her success to her support network, including family, friends and alumni groups who contributed to her campaign. She hopes that, over time, her business will become a hub for mentorship and creativity. “Coffee is a conduit for cross cultural collaboration, communication, and positive, equitable relationship building,” said Schibli, adding that her company is committed to supporting women throughout its value chain.
For now, the Kiva loan will help Schibli purchase a larger roaster to build the capacity and efficiency of her company by filling larger orders and taking on new accounts.
LISC is committed to supporting entrepreneurs like Schibli in getting access to the technical assistance and funding resources they need to launch and grow businesses, and stoke inclusive economies in the communities where we work.
For more information on the match fund, how to register a trustee or resources related to crowdfunding, contact Kate Novotny Angeles at knovotnyangeles@lisc.org.