Kiva Dayton proving to be excellent option for small businesses to raise funds
July 10, 2018
What is Kiva Dayton?
If you’re familiar with the Dayton startup scene, you’ve probably heard of Kiva Dayton. But, what exactly is Kiva? Well, straight from the website, “Kiva is like crowdfunding, but instead it’s crowdlending – after your loan is repaid, you (the lender) can use the same dollars to support another small business.”
Kiva itself is an international nonprofit originally launched in 2005 in San Francisco with its main focus being to help people out of poverty through entrepreneurship in third-world countries. It wasn’t opened to entrepreneurs in the U.S until 2011. And, it wasn’t until 2017 that Downtown Dayton Partnership’s Start Downtown initiative launched Kiva Dayton.
Kiva provides access to crowd-funded, 0% interest micro-loans ($10,000 and less). What sets Kiva apart from most small business lenders is that you are evaluated not by the flaws of your credit score, but by the strength of your character and the size of your audience. This provides capital for entrepreneurs who have a lot of support from the community but who might not have been eligible for commercial lending because of past hardships. As a lender, you can choose to contribute whatever dollar amount you feel comfortable with, and once the money is repaid, you have a choice to either revolve it (meaning lend it to another small business in need) or withdraw it.
The platform was piloted last year in Dayton and was launched officially after the first two businesses who tried for funding (Event Lites & Fronana) were successful. The latest successful fundraiser was led by Juanita Darden-Jones of Third Perk Coffeehouse.
Sounds Great! Where do I start?
You can think of Kiva like a 4-step process.
Application. Review. Fundraising. Repayment.
You can apply to be a borrower on their website. borrow.kiva.org
The application stage can take up to 30 days, though YOU are in charge of how quickly you advance to REVIEW stage. Kiva provides a great checklist to help you create your best profile to meet their quality standards.
After your loan is submitted, the Review team at Kiva HQ will take a week or less to review your profile.If your profile meets their quality standards and basic financial criteria, you will be moved on to the fundraising stage. If your profile does NOT meet their standards, your application may be rejected, or you may qualify for a smaller loan amount. You will then be asked to lend $25 to another fundraising borrower on the website.
Fundraising is split into two stages, Private and Public. Before they post your loan for the community of over 1.5 million lenders, you will have 15 days to secure 5-30 lenders from your own personal network (friends, family, etc.). It doesn’t matter how much you raise from your personal network; instead, it matters that your personal network is willing to support you.
Once you’ve successfully completed the Private round, you move on to Public fundraising where you’ll have 30 days to raise the rest of your goal.
PRO TIP: Don’t just sit back and wait for support to roll in once you reach the Public round–keep reaching out to your personal and professional network because if you don’t raise the full amount, your loan will expire. Any funds raised will go back to the lenders that supported you, and you will have no money to show for your effort!
Congratulations! You were fully funded! Once you hit your goal, you will automatically stop collecting. Your repayment schedule will be set as soon as the loan is disbursed. Depending on the size of your loan, the term will probably be 6, 12, 24, or 36 months.Once your loan is repaid in full, you can actually re-apply for a second loan – for double what you initially raised!
And that’s it! Apply. Ask for help. Repay the loan. Repeat.
For more info on Kiva Dayton, make sure to check out the website.