South Side entrepreneurs benefit from crowd funded loans
As new entrepreneurs establish businesses in the South Side, Kiva Zip has been helping them access crowd funded loans at 0 percent interest.
James Deighan, a lifelong Pittsburgher, founded Orro Fundraising with his business partner Milton Barr. For two years, their electronics refurbishing and recycling company has been operating in the South Side.
Orro Fundraising also provides a social benefit, with a portion of the proceeds from each recycling event benefiting a local non-profit, school, or cause. Placing a high value on social connections and community support, Mr. Deighan immediately saw the need and potential for a business like Orro Fundraising, and likewise noticed the value in Kiva Zip, the non-profit that helps connect entrepreneurs with 0 percent interest microloans.
“[Kiva Zip] fits a role that needs to be filled,” he said, “I’ve already recommended it to other small businesses.”
Kiva Zip, a San Francisco-based non-profit, facilitates microloans to new and existing business owners through their website. The capital is crowd funded, which means that a $5,000 loan is funded by individual lenders around the country and around the world. Each lender can contribute $5 or more towards the total amount, and will be paid back by the borrower over the course of one to two years at 0 percent interest.
Mr. Deighan plans on using the $5,000 loan, once it fully funds, to expand Orro Fundraising’s marketing budget. The company has leveraged their network as well as the global base of lenders that contribute through Kiva Zip. More than 180 lenders from over 15 countries have currently lent to their loan, which is about 70 percent funded so far.
“The idea is to invest in human capital, and to invest in your community,” said Emily Keebler, Kiva City Pittsburgh lead.
Kiva Zip offers a new way of approaching microfinance by basing a borrower’s creditworthiness on their character, rather than their credit score. Borrowers’ characters are vouched for by local organizations and individuals, like Urban Innovation 21 and the Pittsburgh Metropolitan Area Hispanic Chamber of Commerce, who also provide business support.
Another South Side business recently benefited from Kiva Zip: La Palapa, Mexican Gourmet Kitchen.
Jesus Martinez and Luis Navarette, co-owners of La Palapa, posted a Kiva Zip loan last March. It quickly funded, and was used to purchase kitchen equipment and make improvements to the restaurant. After operating out of space at the Pittsburgh Public Market, Mr. Martinez and Mr. Navarette decided to open a second location as a full restaurant, and opened the doors at 1925 E Carson Street in October 2013.
“Here we get a lot of visibility and that was what we needed. The South Side has a good community, and a convenient location,” said Martinez.
To date, 36 businesses in the Pittsburgh region have used Kiva Zip. Three of those are currently fundraising on the website, including Orro Fundraising and Allentown-based Shoutside Media, owned and operated by Micah Rosa. View these loans, and other local borrowers, at http://www.kiva.org/Pittsburgh.
To learn more about Kiva Zip and how to participate, please contact Emily Keebler, Kiva City Pittsburgh Lead, at firstname.lastname@example.org.