Kiva.org Helps Small Business Owners in San Francisco

  • Newly launched Kiva San Francisco connects local small business owners with 0% interest crowdfunded loans to help them start, sustain and grow their enterprises.
  • This is good news for minority-owned businesses in San Francisco since they are more than twice as likely to face challenges related to securing a line of credit, according to Capital One’s Spark Business Barometer survey.
  • To become a lender or a borrower visit Kiva.org/SF.

San Francisco-based Kiva.org—best known for crowdfunding 1.7 million entrepreneurs globally—has gone local with the launch of “Kiva San Francisco.” In partnership with Capital One, this initiative will bring 0% interest crowdfunded loans to hundreds of San Francisco small business owners who are socially impactful and financially excluded from mainstream lending options.

“San Francisco’s small businesses are the heart of our city. They bring color and vibrancy to our neighborhoods, create quality jobs, and enrich the cultural fabric of our city,” said Premal Shah, President of Kiva.org. “They have the passion and the plan, but often they lack just a small amount of capital to start or expand. Through this initiative, we can all be a part of their success and keep the heart in San Francisco.”

“At Capital One, we are committed to providing small businesses with the education, resources and technology needed to start, market and grow their enterprises, and we’re excited to expand our partnership with Kiva to launch Kiva San Francisco,” said Keri Gohman, head of small business banking at Capital One. “The Kiva model makes an important connection between local businesses and the people they serve, and together we’ll be working to help fuel innovation and growth in the Bay Area and beyond.”

Kiva San Francisco represents a dramatic expansion of Kiva’s work in the Bay Area. Kiva has already connected thousands of small dollar lenders to nearly 400 entrepreneurs, including businesses owned by immigrants, neighborhood shops working to stay in their community, and businesses founded to hire at-risk youth or to support local food ecosystems.

According to Capital One’s most recent Spark Business Barometer survey, minority-owned businesses in San Francisco are more than twice as likely to face challenges related to securing a line of credit. Kiva San Francisco is designed to give those business owners who may not qualify for traditional loans access to the capital they need.

How Crowdfunding Works
Visitors to Kiva.org/SF can choose the entrepreneur they want to help crowdfund with a loan of $25 or more. Capital One will match every dollar lent to small businesses via Kiva San Francisco, up to $75,000. Loans requests average $5,000 and are offered at 0% interest and no fees. As the entrepreneur repays, lenders can relend to another person on Kiva.org/SF or withdraw their money and put it back in their pocket.

Crowdfunding fills a critical lending gap faced by entrepreneurs whose businesses are too young, too small or too innovative to receive traditional small business loans. Nationally, small businesses create two-thirds of all new jobs and if just one in three small businesses could hire one more person, the U.S. would be at full employment, according to the Association for Enterprise Opportunity.

Through Kiva, a borrower’s credit-worthiness is based on their ability to recruit friends and family to fund a small portion of their loan, demonstrating that they’ve earned trust among the people that know them best. This “social underwriting” creates a system that differs from conventional small business lenders in several ways. For example, Kiva doesn’t require a minimum FICO score, collateral, or a minimum operations period for the business—which is unique compared to most non-profit U.S. microlenders typically. More than 90 percent of loan requests on Kiva are fully funded.

Part of Capital One’s Efforts to Help People and Communities Succeed
Since 2013, Capital One has fueled an estimated $1.16MM in no-interest loan support to more than 700 Kiva funded borrowers, with at least 50,000 loans being matched through the program. Capital One’s support of Kiva is part of Future Edge, a $150 million initiative focused on helping people prepare for the jobs of today and tomorrow; helping entrepreneurs harness technology to grow and prosper; and to empowering individuals with education, products and tools to invest for the future.