New Loan Program Focuses on Entrepreneurs

An international crowd-funding project is coming home to help American entrepreneurs who lack access to capital. The service could help fill a niche for rural entrepreneurs.


Justin Renfro, a program manager at Kiva Zip, says, “We’re not looking at your credit score or cash flow or business plan.  We’re saying you have to prove that you have people within your own community who are willing to lend you $5 each, and if you can prove that you have that community and support network around you, then we’re going to show you to the world.”

Salt and Savour, his sauerkraut business in Dunsmuir, California, said that while he considered crowdfunding, it didn’t make sense for him as a brand-new business owner.  “Part of the problem is that you pay those back with product or t-shirts or things,” he explains, “I don’t have all kinds of promo pieces like t-shirts. This seemed like the easiest and quickest and most promising way to secure the funds I needed.”

Kiva Zip connects new-business owners to a global community of lenders. While projects on sites like Kickstarter are primarily funded by people within an entrepreneur’s own network, Justin Renfro estimates that only 20% of lenders in a typical Kiva Zip loan come from people known to the borrower. 

Salt and Savour’s David Edmonson noted that while living in a rural place sometimes means a lack of local funding sources, he’s found that living in a small, tight-knit community helped him raise funds with Kiva Zip’s model. “One of the really neat things about being in a rural area is that people are really supportive,” he said. “We have a really challenged economic base.  The job market is pretty bad and our unemployment rate is higher than anywhere else in California, so when you have a business start-up, people really get behind it.”

Once lenders get behind a particular project, they are likely to reinvest their money in new projects once they are repaid.  This “revolving door” of investments is what Justin Renfro says makes Kiva Zip so unique. “We have hundreds of millions of dollars in a revolving loan fund that’s being lent out, repaid, and re-lent out.  So with the same $25 dollars, I can support one farmer, and then when he repays me, I can support an artisan somewhere else, and on and on.” 

Since his project concluded and he was able to buy new fermentation tanks for his sauerkraut business, Edmonson has entered Kiva’s lending community and made a few loans of his own. These projects have begun repaying their loans, and as the funds build up, Edmonson plans to reinvest. “I really like what the Kiva Zip loan program has done for me,” he says, “so I like the idea of continuing to support other small businesses in the same manner.”