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Entrepreneur Tools Spotlight: Kiva US

December 5, 2016

So, you need a few thousand dollars for a new set of Cambros. Where are you going to get your hands on that sweet sweet cash?

How do you feel about zero interest loans?

I know, I know. It sounds too good to be true, the kind of offer that emanates from the same corner of the internet as offers for discount male enhancement and one weird trick for weight loss.

But in the case of Kiva loans, for once, it’s safe to click. Kiva, an organization best known for providing micro-loans to entrepreneurs in developing nations, began offering zero interest loans for U.S.-based businesses in 2013. Since then, thousands of U.S. businesses have taken advantage.

How it Works

Unlike a traditional bank loan, your application won’t live or die based on income statements or credit reports. First, you’ll need to fill out a quick application to asses whether you’re qualified. Next, you’ll need to show you’re committed to the Kiva community with a $25 investment in another entrepreneur. After that, you’ll invite friends and family to invest in your loan. The number of folks you’ll need to invite depends on a few factors, but primarily on the size of your loan. Larger loan = inviting more friends and family.

You can seek anywhere from $500 – $10,000. And again, all of this is at zero interest.

The current prime interest rate is around 3.5%. But if you go to a bank, you’re probably going to land closer to 7 – 10%. And you’re not going to be able to go in without some firm numbers to back up your business.

Credit card? Likely looking at an APR anywhere from 9 – 14%. All of this is to say that all of these numbers are higher than zero percent.

Kiva is able to maintain these rates because they operate as a nonprofit – an entity whose sole mission is to help entrepreneurs thrive.

If it sounds like we are unabashed supporters of Kiva – well, that’s because we are. It’s not easy finding reliable sources of capital for small business owners, especially if you’re just starting out and you don’t have a year’s worth of profit and loss statements to back up your claims.

Indie Food Hub has twice completed the Kiva loan process (our delivery service, Vittlebus, pictured here, a direct beneficiary), and there are few better options out there for small businesses seeking small dollar value capital. Oh, and Indie Food Hub is a Kiva trustee, so we can vouch for you. That means we can endorse your fundraising effort and give you a bit of a boost. We’re always happy to boost your effort on our social media channels, too.

So there it is. Zero interest loans. No strings attached. Check it out.

Article Type: Industry Insights