Latest / Let's Talk Small Biz Finance with CIC Tucson / Crowdfunding Your Business Growth with Kiva | A Conversation with Reteisha Byrd and Danny Knee
Transcript
- speaker-0: Hi everyone, I'm Danny Knee. I'm the executive director of Community Investment Corporation and we are fired up about the upcoming Ten West Impact Festival and I am very honored to be joined by Ratesha Bird from Kiva. She is the entrepreneurial ecosystem associate for them and she is going to be coming to Tucson to hang out with us as we launch our Kiva Hub. So Ratesha, thanks so much for joining us. speaker-1: Thank you, Danny. I'm super excited to have this conversation with you today and to also be in person in Tucson in about a week and a half. speaker-0: ⁓ We honestly we can't wait. So we're going to do a little rapid fire here Q &A ⁓ you a few questions looking for like 15 second answers. We won't time you or anything, but ⁓ ⁓ as a for that. ⁓ So for people who don't know what Kiva is, can you just quickly ⁓ describe Kiva in best elevator pitch that you can? speaker-1: Yeah, so Kiva is a crowd lending platform that allows individuals like you and I to support small business owners who are crowdfunding on the platform. So what that means is, let's say you have a small business owner, they need a small business loan. They go to Kiva, they apply for a loan, they get approved for the loan. And then from there, they start the crowdfunding process, which means that first they invite their family, friends, community members, customers, whoever they want to invite to lend to them. And after they get through that phase, they then become available for anyone across the world to lend to them. So at Kiva, we say that we're a crowdfunding platform we allow for entrepreneurs to bring in their own community, but then they also get to take advantage of the worldwide lending community as well. speaker-0: That's awesome. So I am a Kiva lender myself, so familiar with it. And CIC, we're really excited. Growth Partners Arizona, we helped start the Kiva Hub with them. Growth Partners ran it for a number of years and now they're handing over the reins to CIC. We're very excited about that. So for borrowers, who should apply for a Kiva loan? speaker-1: So any small business owner that will be impacted by a small business loan. So those small business owners, they can be just starting out. So in that startup phase, they can also be existing businesses that are looking to grow and expand their businesses. If they're looking to hire employees, pay those utility expenses for their bills, run social media ads, buy new equipment, any small business owner that is looking for a 0 % interest, no fee loan, may I add? ⁓ then they are a great candidate for a Kiva loan. speaker-0: 0 % interest. That's like better than my brother would loan to me. So that's pretty awesome. It's great to have affordable capital. It's something that CIC is really about. So glad to partner with you guys. How much funding can entrepreneurs raise with a Kiva loan? speaker-1: Yeah, so for our first time Kiva borrowers, we do allow them to crowd fund between 1000 and $15,000 because a lot of times we know that for most small business owners, they just need a little bit to get started or to grow and scale their businesses. And I did say first time Kiva borrowers, we allow for repeat Kiva borrowers. And what that means is if they get a Kiva loan, pay it back fully, they can come back and be eligible for an additional Kiva loan. And so far I have heard of a five time repeat Kiva borrower, which is pretty impressive. speaker-0: That's awesome. So do you need perfect credit? I think these are the things borrowers are asking like, know, I've maybe gone to banks and haven't ⁓ qualified those types of things. ⁓ do you need perfect credit? What do you need to qualify for a key loan? speaker-1: You do not need perfect credit at Kiva. At Kiva, we have what we call a social underwriting process. What that means is while we do look at your credit report, and it is a soft pull, I want to point that out. It's a soft pull that we pull on your credit report. You don't have to have perfect credit. We want to be able to analyze your application in its entirety to understand your overall financial standing. With that information, we determine the amount that you will qualify for. And the reason we do that is so that we don't overburden borrowers with additional debt. So if they already have outstanding debt, you know, it could be credit card debt or car loan payment, whatever that looks like for them. We don't want to give them more debt than what they can handle. We don't want to create that hardship for our borrowers. So you don't need perfect credit to apply for a Kiva loan at all. speaker-0: That's awesome. I know, you know, CIC, part of the work that we do is to de-emphasize collateral and credit. also, collateral, do you need to have collateral for a key? speaker-1: No, you don't need to have collateral. You don't need to have audited business financials or anything like that. We do in the application, we let you know what's required of you, especially if you want to qualify for those larger loan amounts. But there's no collateral that we ask for. There is fees or anything like that associated with our loans either. speaker-0: All right, so let's switch to the other side. I'm a Kiva lender and this is part of we're trying to do at Ten West is also bring in the investment side. How do people invest in their local small businesses? I always make the joke like, yeah, I can go buy coffee if you sell coffee, but there are other ways to support ⁓ and being a lender is ⁓ one those ways to do that. So how much does it take to become a lender on Kiva? speaker-1: So to become a lender on Kiva, the minimum amount that you can lend to anyone is $25. Obviously from there, you can lend as much as you would like. I will say that PayPal is a long-time partner of Kiva. So all the lending happens through PayPal. So you will need to have a PayPal account. You just connect it to your bank account. You go onto our platform, you find a business owner that you want to lend to, and then you make whatever contribution that you want to make to them. And I do want to point out again, it's a loan. the money that you lend to those small business owners, will be repaid back to you over the loan terms of that small business owners loan. speaker-0: All right. so do lenders earn interest? We talked about this a ago, but just to reiterate, do lenders earn interest? ⁓ speaker-1: That's a great question. So at Kiva, we don't charge the small business owner any interest for their loans. We also do not pay out any interest to the lenders as well. So no interest that's being charged of the small business owner. There's no interest being paid out ⁓ the lenders either. speaker-0: Okay, that's great. So why do people then lend on Kiva? I mean, you there are different sort of mindsets around investment and those types of things and even philanthropy, that stuff, if they're not earning interest. So why do people lend on Kiva? speaker-1: Yeah, that's one of my favorite questions. So people come to Kiva to lend because they're again, they're not looking to make any interest on the money that they're lending. What they're looking to do is to create a local. impact in their local community. And so what that means is if you have a small business owner in Tucson that is crowdfunding on our platform, it could be that coffee shop that you just mentioned. So while you patronize that small business owner, that coffee shop, you could also come onto our platform and lend to them as well. Because if you're committed to having that local business in your community, they're providing jobs. They're supporting the local economy and you can come onto the platform, lend to them too, because obviously they need some additional funding to continue their business operations. So it's a win-win. It's a win for the small business owners. Also a win for you as a local patron to the business as well. speaker-0: Yeah, and I'm not sure that everybody totally understands exactly how much of a benefit this is from our own portfolio, the micro lending that we do. We see a 35 % increase in employment ⁓ after ⁓ get a small $10,000 loan with us. And so again, this is one of the reasons we're so excited to partnering with Kiva because this will basically have more resources to go to more ⁓ local Super psyched about it. So one thing I would love for you to describe to us, if you can, again, we're doing quick hits here. So 30 seconds, can you describe the borrower journey ⁓ for speaker-1: Yeah, so the process works like this. The small business owner, they start their application. It can take about 30 minutes to start the Kiva application and complete it fully. You want to make sure you have those documents ready. From that part, once the business owner submits the application, Cassie on your team, because you all are our local partner, she's gonna take the first review of the application. If she has any questions about the application, she's gonna reach out to the borrower. Once she's had that communication with the borrower, everything looks good, then it comes over to our internal Kiva team. They're gonna review the application. From there, they're determining. if the loan is approved and if so, how much and what the loan terms are. So once the business owner has been approved for a Kiva loan, they accept the terms, then they move forward to the two phases of crowdfunding. So the first phase, as I mentioned before, is asking your community, your family, your friends, customers, whoever you wanna ask. to lend to you. And then once they've hit that number of people that they need in that initial phase of crowdfunding, they then move on to our QA.org platform. That's where anyone across the world can lend to their profile. And that's where a lot of the magic happens and they typically fundraise a lot faster. Once they fully fund it on our platform, the funds will be dispersed to them in about seven business days. And then one month after the funds have been dispersed, the business owner has to start paying back their loan over the course of the loan terms. speaker-0: That is awesome. So I have asked you questions and I only feel like it's fair that if you want to ask us questions, what's good for the goose is good for the gander. So any questions that you have for me or for CIC. speaker-1: Yeah, so I have two questions for you. My first question is, why did your organization decide to become Kiva Hub? speaker-0: Well, I think from the lending that we have done, a lot of micro lending here, we saw what Kiva was doing. You guys are like who we want to be when we grow up, if we can be that. ⁓ But you do such a good job. think it's such a good complement to what our portfolio and the type of lending that we already Again, I said previously, I think we can help more. ⁓ People, we can also get more people involved. So we can help more entrepreneurs and we can get more entrepreneurs involved. We believe in changing the decision makers on who decides who gets a loan. And by doing that, we think we're going to help some underserved, more underserved ⁓ entrepreneurs, people who may not qualify for bank loans. So I think there's a lot to be said of adding the horsepower of Kiva. to the work that we're doing locally. You guys make it really easy. Again, I'm a lender, so I know how easy it is. I love, I'm gonna say, I love that you can search by ⁓ locality. I'm a localist. I like to support local business. It's not that businesses doing stuff everywhere else are doing great stuff, but they're multiplier effects, things that are great. ⁓ the fact that I can go and search Tucson, Arizona and see what businesses are looking for funding. is one of the reasons we're really excited. speaker-1: Nice, thank you. And my last question to you is with this partnership, what impact do you hope to see for entrepreneurs in Tucson? I know you kind of hit on this a little bit, but what additional impacts do you hope to see for those small business owners in Tucson? speaker-0: I think there are a couple things. One includes just the support, the idea that I think entrepreneurship can feel like a lonely journey. And so the idea that there are people locally that want to support our entrepreneurs, it's one of the things that I'm excited about. We are gonna start something called the Kiva Club. And that's basically a way for people to meet some of the entrepreneurs we have, ⁓ know, who are gonna go up on the platform. ⁓ to get involved, this idea that local people can really get involved in the local ecosystem in a way that they may not have thought about it before. Again, yes, it's great if you can go and purchase something from local businesses. You'll find out when you come to Tucson. We're a great little community. And I always say it's because of our creatives ⁓ and because of our local businesses. That gives us the vibe, the Tucson vibe. that you'll see here. so having a way for people to participate and in support entrepreneurs and show them that they are supported. I'm hoping that that is the impact that comes from our partnership. Yeah. ⁓ Well, so much for taking the time. ⁓ You we are super excited for your visit. ⁓ When get out here, we'll try to show you some of the great places to eat. We have some amazing places to eat. speaker-1: Thanks. speaker-0: here, but we're really excited. And I know that you are actually doing a session on Thursday. So I hope people look up Thursday the 26th. We are also CIC is doing a session, a two hour session with our partners, the Jane project. And that is on Wednesday the 25th. So I hope people will come in and check you out and check us out to see what's going on. speaker-1: Yeah, I'm super excited to be there in Tucson in about a week and a half. Super excited to meet all the entrepreneurs, small business owners. I would love for them to join this session that I'm going to be hosting. It's going to be fun, interactive, and it's going to be a way for them to get their questions answered too. So thank you all for having me, Dani. speaker-0: That's awesome. Thanks for joining us today. We really appreciate it. speaker-1: Thank you.