With Amidst Magazine, Kiva Iowa’s loan program finances its first entrepreneur
In September, Jessica Pfohl Paisley of Dubuque became the first entrepreneur to be fully funded with a loan from Kiva Iowa. (NewBoCo)
By early summer, Dubuque’s Jessica Pfohl Paisley was ready to launch her latest entrepreneurial adventure, Amidst Magazine, a print and digital publication that Midwestern creative professionals could connect with.
There was just one problem. She needed $ 10,000 to cover the cost of printing the first issue.
It is not unusual. Access to seed capital is one of the biggest obstacles to the success of Iowa start-ups.
Without access to this early financing, many entrepreneurs in Iowa have to close their doors before their businesses even have a chance to start.
“Our team spoke to hundreds of entrepreneurs and entrepreneurship support organizations across Iowa,” said Aaron Horn, Executive Director of NewBoCo,
“We have discovered that there is a hidden step on the capital ladder that these companies are struggling to access before they are eligible for SBA loans, banks or private investors.”
Aaron Horn, NewBoCo
For this reason, in 2021 NewBoCo partnered with Kiva to launch Kiva Iowa – and Paisley became its first borrower.
“Becoming a borrower on Kiva was very easy,” said Paisley. “I’m not going to say it was easy, but it was simple. Mainly because someone is walking you through the process.
Based in San Francisco, Kiva is a global not-for-profit microcredit platform. It offers interest free loans ranging from $ 1,000 to $ 15,000.
Lenders can support a Kiva microcredit with an investment of as little as $ 25.
As a statewide Kiva hub, NewBoCo facilitates the lending and due diligence process for Iowa-based borrowers on the Kiva platform and connects borrowers to other resources to develop their activities.
NewBoCo was able to pilot this program in 2021 thanks to grant funding from the Entrepreneurial Investment Award program of the Iowa Economic Development Authority.
“This region needs more capital to create new opportunities for entrepreneurs, especially those who are financially excluded or historically deprived of access to traditional means of capital,” said Kaitlin Byers, head of access to capital. from Kiva Iowa.
“This is why, as a former entrepreneur myself, I was drawn to a new role at NewBoCo as the Access to Capital Manager at Kiva Iowa. “
How it works?
Rather than asking for collateral or performing a traditional credit check, Kiva uses a “social underwriting” process to assess creditworthiness.
To be approved for fundraising, borrowers must provide high quality financial and business information, personal history, and professional photos.
Kiva reviewers then look at social factors, such as whether a borrower has been approved by a local trustee, before approving a loan for fundraising.
Once approved, the loan is posted on Kiva’s website for a 15-day private fundraising period. During this time, the borrower must recruit a given number of lenders from his personal network to start his fundraising.
After reaching the required number of initial lenders, the loan moves into a 30-day public fundraising period, during which it is publicly visible to the global Kiva lender community.
This process makes Kiva an accessible option for entrepreneurs, especially women, people of color, and those with low to moderate incomes.
To level the playing field for entrepreneurs, Kiva requires that 80% of borrowers on its platform fall into these categories. NewBoCo expects nearly 100% of the borrowers it supports to fall into these categories.
Paisley connected to Kiva Iowa at EntreFEST – NewBoCo’s conference for Midwestern entrepreneurs and innovators.
Byers worked to get Paisley approved on the Kiva platform and provided guidance throughout the fundraising process.
“When there was a day or two left (in my fundraising period), someone finished the final $ 700,” Paisley said. “It was absolutely amazing.”
With a fully funded loan, Paisley had access to the funds she needed to print the first issue of Amidst magazine in September. This has been a success and Amidst staff are planning the spring edition and are working to develop their digital edition and online community for creatives.
The first issue of “Amidst Magazine”, published in Dubuque in September. (NewBoCo)
Just the beginning
Paisley isn’t the only Iowa entrepreneur using Kiva Iowa.
As of October, two borrowers from Iowa were fully funded and many more are starting their fundraising process.
These entrepreneurs come from all over the state, and their businesses represent everything from making model trains to beauty salons to farms.
Byers sees this as the start of the program’s journey. She is committed to cultivating Kiva Iowa statewide.
“Small businesses are the backbone of our communities,” she said.
“Our partnership with Kiva further confirms our commitment to supporting the dreams of entrepreneurs across the state of Iowa.”
Already a successful borrower on the platform, Paisley said she now wants to give back by becoming a Kiva Iowa lender.
“I’m scouring the platform for different loans to support myself,” Paisley said.
“It’s such an amazing and rewarding thing to do. You can actually see firsthand the impact you are having.
To learn more about Kiva Iowa, visit newbo.co/kiva.