Long Beach partners with nonprofits for small business crowdfunding campaignRelease Date: 2018-06-01
As Long Beach continues to become a magnet for businesses big and small, the city recently partnered with nonprofits to help entrepreneurs obtain zero-interest loans to start or grow their businesses through internet crowdfunding campaigns.
The initiative, known as Kiva Long Beach, allows local small business owners to borrow micro-loans as small as $25, giving those lacking sufficient collateral or who can’t afford to repay high-interest commercial loans offered by traditional lenders more financial options.
The move is an effort by the City to make small business entrepreneurship more inclusive, particularly for women and minority-owned businesses, said Eric Romero, an Economic Development Project Manager for the City.
“In order to have a strong and resilient and vibrant economy, we all need to make sure people have access [to affordable loans],” Romero said.
Working with San Francisco-based Kiva Microfunds, a nonprofit that allows people to lend money to business owners over the internet in over 80 countries, borrowers can apply for loans that are then posted to the Kiva website for potential lenders to view.
Lenders can be organizations or individuals and each loan is matched dollar-for-dollar by the Los Angeles Local Support Initiatives Corporation, provided the borrower is vouched for by one of nine local groups established as Kiva trustees.
Trustee groups include the Downtown Long Beach Alliance, the ABC Black Foundation and the Institute for Innovation and Entrepreneurship at Cal State Long Beach.
The goal is to reach local underserved entrepreneurs and business owners who can’t be serviced by normal banking institutions or who don’t qualify for traditional loans, said Miranda Rodriguez, an LA LISC program officer.
“We’re really trying to combat the predatory lending market in trying to provide a safe accessible product,” Rodriguez said. “It ‘becoming more common for people to get loans that maybe they don’t necessarily understand all the full terms.”
Women and minorities often encounter barriers when trying to start or grow small businesses because of the lack of capital. Kiva Long Beach was borne out of a City Council request last year to look for ways to reverse the trend.
“Success in a community comes from all groups of people of different backgrounds,” said Marcelle Epley, president and CEO of the Long Beach Community Foundation. “A lot of our culture and art, out heritage and history comes from different people living and working and thriving in our city, so it only makes sense that this continues.”
The $5,000 Tromaine Ellis recently raised on Kiva Long Beach will go toward the purchase and upgrade of equipment for his photography business, The LBC Photographer.
He was recommended for a loan by the World Famous VIP Business and Media Incubator, an off-shoot of VIP Records. Ellis, 46, will begin running his business from the incubator, which is expected to open in June.
His loans came local sources and as far away as the United Kingdom, Minnesota, Texas and Washington.
A questionable credit history would have made it almost impossible for him to obtain a loan from a regular financial lender, he said.
“I would have never got a loan just being a regular guy,” Ellis said. “I don’t have an office and I don’t work out of home.”
When his repayment period begins, Ellis will pay back everyone who lent him the money.
Original Article: Press Telegram