For some small business owners, a small loan may be what they need to help their business pivot in our rapidly changing economy. Kiva, an online small business lending platform offering 0% financing with no fees, is expanding its program in an effort to help more businesses affected by coronavirus.
Kiva announced that effective immediately, U.S. applicants for a Kiva loan will have access to the following:
- Expanded eligibility: More businesses in the US will be eligible for a Kiva loan.
- Larger loans: The maximum loan on the Kiva platform will increase from $10,000 to $15,000.
- Grace period: New borrowers may access a grace period of up to 6 months for greater financial flexibility.
How It Works
Kiva is a non-profit organization aimed at helping small businesses increase access to capital. As a “microlending” platform it makes small loans: previously up to $10,000 but now up to $15,000 for US businesses. It does so with the help of philanthropically minded individuals who want to support small businesses by becoming lenders. These individuals choose which loans to back and typically fund a small portion of a loan request. Smaller loans require fewer backers.
We’ve written before about how Kiva loans can help small businesses get the funding they need to take their business to the next level, with stories about an entrepreneur who used a Kiva loan to grow his food business and another who created a mobile fashion truck.
Kiva says it doesn’t judge borrowers just by their credit history. You will need to provide information about your monthly debts, though, and you cannot currently be in bankruptcy.
To complete your loan request you’ll need to share a personal story that explains why you are passionate about your business, as well as describe how you will use the funds. If approved, you’ll need to find people in your network (friends, family, fans of your business) to initially fund a small portion of your loan. (According to Kiva, borrowers must invite between 5 and 35 lenders from within their network depending on the loan size and other factors.) Kiva says this step helps provide accountability and demonstrates social capital.
If you are successful in the private fundraising process, your loan request will be opened up to the platform where there are 1.6 million lenders who may decide to lend to your business.
Kiva notes that its “U.S. Operations team has the ability to determine (the) final loan amount, and consider both the risk and the social impact of the loans we offer and the businesses we support.”
You can apply for a Kiva loan at Kiva.org/borrow.
More Small Loan Options
If you determine a Kiva loan isn’t the right option for you, or if you need money even more quickly, you may want to look into other business loan options such as:
0% credit card
A number of major credit card issuers offer 0% credit card offers, either for purchases or for balance transfers. These offers typically last between one year and eighteen months, though at least one issuer is currently offering 0% for the first twenty billing cycles. On a balance transfer, most issuers charge a fee of 3-5% of the transferred amount.
A Business Term Loan or Line of Credit
An online term loan or line of credit application can often be submitted quickly with a decision made within 24 hours. If approved, funding will be deposited into your business bank account within days.
Qualification requirements are changing quickly these days, so feel free to reach out to one of Nav’s credit and lending specialists today. We will gladly answer questions and do our best to help you find the right solution to help you weather the storm.
A Small Business Grant
Nav offers a quarterly $10,000 small business grant to the most deserving business that applies. The application is easy; we’re looking to help a business solve a specific business challenge.
Facebook’s has announced a $100 million small business grant program, though details are not currently available yet.
Please keep in mind this information is changing rapidly and is based on our current understanding of the programs. It can and likely will change. Although we will be monitoring and updating this as new information becomes available, please do not rely solely on this for your financial decisions. We encourage you to consult with your lawyers, CPAs and Financial Advisors. To review your real-time funding options with one of Nav’s lending experts, please contact us.
This article was originally written on March 19, 2020 and updated on June 30, 2020.