For small businesses like Oakdale-based Carrie Ann's Bridal looking for funding to expand and grow, social underwriting may be the most effective way to secure financing.
While banks run background checks, credit reports and analysis before writing a loan, Kiva
Zip requires endorsements based on relationships, said Emily Keebler, Kiva City Pittsburgh lead. Now, Allegheny County is becoming part of the social underwriting movement with the ability to help endorse local businesses for Kiva loans.
Kiva, an international micro-loan nonprofit founded by Pittsburgh native Jessica Jackley
Flannery, began working to alleviate poverty across the globe in 2005. In 2011, Kiva began supporting small domestic businesses with Kiva Zip. Since Kiva City Pittsburgh launched in March 2014, the number of Kiva-sponsored Pittsburgh businesses has grown to more than 60.
Borrowing businesses must show that they are reputable with an endorsement from a Kiva Zip Trustee in order to participate in the program. These small businesses endorsed by Kiva Zip Trustees gain access to 0 percent interest -- AKA “zip” -- loans of up to $5,000 for first-time borrowers.
Allegheny County has formed a partnership with the nonprofit to help small businesses gain access to capital and improve the local economy. Via this relationship, Allegheny County Economic Development, the county’s lead economic and residential development agency, is able to recommend entrepreneurs for Kiva’s innovative crowdfunding platform.
Kiva Zip Trustees are individuals, organizations and governmental agencies that vouch for entrepreneurs they know and trust in their community. Allegheny is the third county in the nation to become a Trustee and is home to 1.2 million residents, making it Kiva Zip’s second-largest Trustee.
“Kiva Zip's vision is one of a community of individuals coming together to lend their support to small business owners and entrepreneurs,” said Kiva Zip Director Jonny Price. “This vision is shared by Allegheny County and we are delighted to welcome them into Kiva Zip’s growing network of Trustees.”
Kiva Zip uses social underwriting to screen loan applicants. Keebler explained that social underwriting means that the business has a Trustee willing to speak to an entrepreneur’s good character and reliability. She said the organization understands that many have had bad credit in the past; so, instead, Kiva looks to a person’s network. Once endorsed, entrepreneurs can post their loan request on kivazip.org
and begin crowdfunding their loan with the help of friends, community members and Kiva’s growing global community of 1.3 million lenders.
“Our economy continues to do well because we work together and support each other in this community,” said County Executive Rich Fitzgerald. “Kiva Zip’s vision allows us to build on that history and to further expand the ways that we can support small businesses in Allegheny County. Kiva Zip, literally, allows everyone to play a part in a business’ success.”
One of the county’s interests is to help businesses in areas of the county that don’t have a strong business development corporation or chamber of commerce, Keebler said. She explained that many established business districts serve as Trustees for entrepreneurs, but there are areas of the county that do not have these organizations for support.
“We’re just so excited to have [Allegheny County] on board to fill in those gaps and give additional legitimacy to our program,” she said.
Allegheny County Economic Development identified an ambitious female business owner for its first endorsement. Since she was a young girl, Carrie Ann has been passionate about fashion, but she has also suffered from polycystic ovarian syndrome, causing her to feel uncomfortable in her own skin. As an adult, she strives to raise awareness of PCOS and make all women feel beautiful, two goals she aims to combine via her Oakdale business, Carrie Ann’s Bridal
“We're a one-stop bridal shop that believes all women are beautiful and should embrace their uniqueness,” said Carrie Ann, as she is known on her crowdfunding page
. “We want to make our customers' bridal, prom or other big day fabulous, fun and stress free."
Keebler added that Carrie Ann’s business falls outside of an established business development district and there was no obvious Trustee for her until the county stepped in to support the shop.
Carrie Ann hopes to raise $5,000 via Kiva Zip to improve the e-commerce portion of her website in order to increase online sales and to purchase equipment and supplies to bring her custom designs in-house. Lenders can visit www.kiva.org/Pittsburgh
to browse entrepreneurs’ profiles and stories, including Carrie Ann’s, and make a loan as small as $5 to the person of their choice.
for more information on the Kiva City Pittsburgh initiative, including a list of all 39 Trustees in the Pittsburgh area.
Source: Emily Keebler, Kiva City Pittsburgh