How to Get a Kiva Loan: A Step by Step Guide

One of the biggest obstacles for aspiring business owners and entrepreneurs is getting the funds needed to start or found their business. While there are many options for getting business financing, an attractive method to establish your small business is to get funding through Kiva.org.

Small Business Funding Through Kiva

Kiva is an international nonprofit based in San Francisco with a mission to connect people through lending for economic empowerment. It celebrates and support people looking to create a better future for themselves, their families and their communities.

With over a million active lenders, corporate sponsors and local governments, Kiva provides loans primarily through voluntary lenders, optional donations and support from grants and sponsors.

The more than a decade-old online lending platform connecting online lenders to entrepreneurs says 100 percent of every dollar people lend on Kiva goes to funding loans.

Kiva Small Business Loan Features

Some attractive aspects of a Kiva loan includes more flexible terms, low costs to borrowers and emphasis on supporting community-wide projects that can shape the future for a family or an entire community.

Other features of a Kiva loan that business owners and entrepreneurs should take note of include:

• Zero percent interest. The Kiva community provides access to zero percent interest loans, and no fees.
• Character over credit history. Rather than assessing your financial statements and credit history, Kiva uses your character and trust network as a measure of creditworthiness.
• Loans emphasizing connection. Kiva creates the opportunity for lenders to lend to friends in their community or people across the globe as a way to create connection and relationships.

So, how do you apply for a Kiva loan?

How to Apply for a Kiva Loan

Simply fill out a prerequisite online questionnaire that helps lenders learn more about your business and Kiva determine the loan amount you qualify for. Then, complete your loan application in three easy steps:

Step 1: Join the Community and Participate

First, you will be encouraged to join the Kiva community by making a loan to another small business owner. You can lend $25 or more to a borrower to help them reach their goal.

Step 2: Prove Your Credit-Worthiness

Secondly, you will be asked to invite your family and friends to lend a portion of your loan request to prove your credit-worthiness. Loan requests go up to $10,000.

Step 3: Launch Your Loan Fundraising

Once you have the support of your friends and family, your loan request will be posted live on the Kiva website and begin publicly fundraising the amount from Kiva’s network of over a million lenders.

When your fundraising achieves its goal, use your loan to grow your business. Repay the loan as agreed upon to allow your lenders to loan other business owners as well.

U.S. Small Businesses also Benefit from Kiva Loans

Contrary to popular belief, Kiva is also open to businesses in the U.S., not just developing countries. In the U.S., Kiva crowdfunds loans for borrowers who are either financially excluded or creating social impact in their communities, such as students, farmers and builders. The kinds of U.S small businesses owners and entrepreneurs already benefiting from Kiva loans include artisans and restaurant owners.

“[Getting a loan on Kiva] was a simple and straightforward process,” writes Sally and Nadia of Night Owl Market, Cincinnati, OH in a testimonial on the Kiva website. “It wasn’t just a bank. We were able to put faces to those supporting us.”

Images: Kiva

This article, "How to Get a Kiva Loan: A Step by Step Guide" was first published on Small Business Trends