By Michael Bushnell
Northeast News
November 25, 2015

KANSAS CITY, Missouri — Small businesses in Kansas City’s Historic Northeast neighborhoods now have a new tool to help them grow, courtesy of the Northeast Chamber of Commerce and a partnership with Greater Kansas City Local Initiatives Support Corporation [LISC].

Qualifying small businesses can get a zero percent loan, up to $5,000, through Kiva-Zip, an online crowd funding platform geared specifically for small businesses.

“This is really designed to fill the gap between an SBA loan that normally starts at $50,000 and what an area small business actually needs,” chamber president Bobbi Baker-Hughes said. “This is a product specifically geared toward the mom and pop small businesses that are the backbone of our community.”

Kiva-Zip uses social underwriting to increase a small business’ access to capital. The process, according to LISC, is simple. Each borrower is required to reach out to at least 20 “lenders” in their own personal network before the loan is posted live on the greater Kiva-Zip lending community. Lenders can commit as little as $25 to a specific loan. Once a loan is posted live, it’s viewable by the entire Kiva-Zip lending community and available for funding by lenders worldwide. Terms for repayment of the loans can range up to 24 months. Presently, small farming operations are the primary users of the Kiva-Zip program, but local officials believe the program has great potential in Kansas City’s urban core.

According to Ed Linnebur, program officer of Greater Kansas City LISC, the idea is for small entrepreneurs to be able to access capital without the paperwork required for an SBA loan.

“The Kiva-Zip loan program is designed to give small business access to zero percent loans through what we call community capital,” Linnebur said. “Since the loans are based more on a small business’ relationship rating than a traditional credit rating, it really allows the community to invest in the small businesses in their neighborhood that they believe in.”

TheNortheast Newshas agreed to be a pilot project loan for the Kiva-Zip program. Follow us on Facebook for up-to-date information and to learn the outcome.