Kiva Dayton Seed Fund launches to help local entrepreneurs

A new seed fund launched in Dayton is aimed at boosting the growing number of startups in the region. Together with the NCIC Capital Fund, the Downtown Dayton Partnership (DDP) is launching the Kiva Dayton Seed Fund to help jumpstart the use of crowdfunding tool Kiva as a lending source for local small businesses and startups.

Dayton’s urban core has seen a dramatic increase in the number of entrepreneurs and small businesses it counts among its workforce. Through the Start Downtown initiative launched in 2016, the DDP and several community partners have been developing new programs and resources aimed at nurturing growth for this segment, whether by means of creating new opportunities for entrepreneurs, fostering meaningful connections, or reducing or eliminating potential barriers.

Access to capital is often a large obstacle for small businesses to overcome. Traditional lending sources aren’t always the best fit for small businesses as startup companies may not have a revenue track record, or are unable to meet the loan down payment requirements. One of the Start Downtown programs launched a Kiva network in Dayton earlier this year. This crowd-sourced loan program opened up new funding channels for small businesses. In this new phase, more funding will help spark greater capacity for the Kiva Dayton network.

The new Kiva Dayton Seed Fund will help jump-start the crowd-funding campaigns of Kiva Dayton borrowers by committing the first 20 percent of the total loan intended to be raised through Kiva. This seed funding will provide important momentum to each crowd-funding campaign, which will give the entrepreneur a much better chance of reaching his or her fundraising goal. Like any Kiva loan, the seed funds will revolve as the loan is repaid.

“Small business is the backbone of the Dayton economy,” said Frank Winslow at NCIC, which is an affiliate of the Dayton Development Coalition. “But for many entrepreneurs, access to capital is a major barrier. We see this fund as an outlet that will help small businesses establish financial credibility to climb the capital ladder, which is critical if we want them to grow.”

Access to capital was a top concern addressed at early Start Downtown meetings. “For us to have a thriving small business and startup ecosystem, we can’t just focus on technology-based or high-growth startups,” said DDP Vice President of Economic Development, Scott Murphy. “There are plenty of service-based companies, retail businesses, and more that provide important contributions to our economy. These businesses need to have funding outlets as well.”

Anyone who would like to contribute toward Kiva loans for participating Dayton-area businesses can create an account and contribute as little as $25 towards a campaign. Entities that would like to contribute to the seed fund should contact Murphy at murphy@downtowndayton.org. Small businesses wishing to apply for Kiva funds can contact Murphy or any of the Kiva Dayton Network partners, which include the Downtown Dayton PartnershipNucleus, the Minority Business Assistance Center (MBAC)Ohio SBDC NetworkThe Entrepreneurs CenterDayton Tech GuideNCIC Capital FundDayton Development Coalition, and Dayton SCORE.

Keep up with Kiva, pop-up coworking events, and more Start Downtown programs, and receive other downtown business and economic development updates by subscribing to the DDP’s email newsletters. Email murphy@downtowndayton.org to sign up.

 KIVA DAYTON QUICK FACTS

What is Kiva?

Kiva is like crowd-funding, but instead it’s crowd-lending – after your loan is repaid, you can use the same dollars to support another small business. Loans are 0% interest and are repaid by the small business over a period of 6-36 months depending on the loan size. Businesses that apply for lending through Kiva have 30 days to reach their fundraising goal. If they don’t reach their goal, they don’t receive funding.

What Businesses are a Fit for Kiva?
Kiva borrowers are typically businesses that are unable to access capital through traditional lending outlets – either because they don’t have a revenue track record, or because they are unable to meet the loan down payment requirements. Kiva isn’t easy money though – you need to have a good plan and be willing to hustle to meet your fundraising goal. For entrepreneurs just getting started, Kiva is a great option to build financial credibility.

How Do I Become a Kiva Dayton Lender?

These are community members who provide mico-loans to Kiva Dayton borrowers. Each loan can be as small as $25. After the money is repaid by the entrepreneur, the lender can revolve the money to another borrower, or withdraw it from Kiva. Kiva Dayton currently has more than 40 people on its lending team.

Who Are Kiva Dayton Advisors and Trustees?

As part of their business support and counseling services, these project partners provide a pipeline of prepared and vetted small business candidates that will use Kiva to borrow funds to grow their small business

Who Are Kiva Dayton Promotion Partners?

These partners help promote the Kiva Dayton candidates during their public crowd-funding period. Promotion partners also raise awareness of Kiva Dayton and help encourage more community members to create Kiva accounts to lend to Dayton small businesses.

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