By Paul Thompson

Northeast News

April 27, 2016

KANSAS CITY, Missouri – Have a business plan that you know your friends will love? There is now a way to put your idea to the test, thanks to a partnership between the Local Initiatives Support Corporation (LISC) and online crowdfunding platform Kiva Zip.

The organizations will offer 0% interest small business loans of up to $5,000 (or $10,000 for agricultural businesses) for qualified borrowers who can collect 20% of the loan amount from their own social networks. Once that threshold is reached Kiva Zip will open up the doors to its broader community of lenders, while LISC has agreed to match the loan amount dollar-for-dollar to reach $5,000.

Ed Linnebur of LISC was at the Northeast Chamber of Commerce luncheon at Eleos Coffee House on Tuesday, April 26, in order to explain the socially-backed alternative financing option.

“It is a $5,000 loan; you do repay it,” said Linnebur. “They’re going to look at the character of who you are and what you do well. That’s going to drive whether or not you get this loan.”

Linnebur told the story of The Tamale Kitchen, a Northeast business founded by Becky Gripp that successfully applied for a 0% small business loan through Kiva Zip.

“They went after a $5,000 loan, and got the loan funded in, I think it was like five days,” said Linnebur. “She put it on the world wide web, and within a couple of days she had the money.”

Microlenders like Justine PETERSEN, AltCap, Next Step KC, and the Central Bank of KC also presented at the chamber luncheon, hoping to educate business owners and entrepreneurs about alternative funding options available right in their back yards.

AltCap representative Carmen Lopez discussed three loan programs offered by the organization: a Facade Improvement loan, an ArtCap microloan intended specifically for artists, and a Diversified Contractor’s loan for those who have contracts with the City of Kansas City.

Lopez informed attendees that the Facade Improvement loan could be combined with other financing such as the Store Improvement Program spearheaded by the Independence Avenue Community Improvement District, which helps businesses along the Avenue invest in their buildings.

“The maximum amount for that would be $50,000. We do have a fixed rate of 5%,” said Lopez. “This could truly complement a rebate program such as the Independence Avenue CID.”

Lopez added that AltCap seeks to be as malleable as possible when working with area small businesses.

“It is a five-year term, but we are very flexible in that,” said Lopez. “If, for example, someone takes out a $50,000 loan for this five-year term; if the $954 payment is too high, we would work with you all to make sure that the payment is lower.”

Becky Gripp also presented to attendees, in her role as Program Director of community-based non-profit Next Step KC. Gripp discussed the organization’s Small Dollar Loan Program, which offers $300 or $500 loans, payable over six or nine months, for individuals referred from partner organizations. Those referral partners include faith-based organizations, non-profits, and service groups throughout the metropolitan area. Next Step KC focuses on individuals who need to build credit or create relationships with financial institutions. Gripp noted that 12-15% of individuals in Kansas City do not have bank accounts.

“We have a huge group folks who do not have a financial institution relationship,” said Gripp. “We also have folks who have no credit or have poor credit who need to get back into the mainstream so they’re not taking advantage of predatory lending.”

Small business owners and entrepreneurs who want to learn more about starting a business or about the financing options available to them were encouraged by the presenters to visit kcsourcelink.com or moneysmartkc.org for more information.