The Fresno Metro Black Chamber of Commerce and City of Fresno are teaming up with microlending platform Kiva to launch a crowd-funded loan program for local, disadvantaged businesses.

Many small business owners have struggled to receive a loan due to equity barriers, but the Fresno Metro Black Chamber of Commerce is offering the Central Valley a donation-based loan program as a solution.

The loans are funded through Kiva, a San Francisco-based nonprofit through which people or community banks can crowdfund microloans. Fresno will represent Kiva’s fourth hub. The lending program is the first of its kind in the Central Valley.  

The loan is funded through Kiva once the borrower applies and the loan goes through underwriting and approval. The loans have 0% interest and no fees. They range from $1,000 to $15,000. Loan amounts are determined by debt ratio, financials and the profile the applicant submits. There are other factors that can come into play, but are done on a case by case basis.

The loans have a 60-day turnaround time. 

“We know that financing is a problem for our small businesses,” said Economic Development Director for the City of Fresno Lupe Perez.

The City of Fresno is helping with the program. Matthew Grundy, deputy mayor for the City of Fresno, said that the program is one result of Covid-19 business strains, but through it, Fresno is addressing decades of unequal business development. The program is specifically aimed at women and people of color who own small businesses.

Rick Keyes, capital access manager for the Black Chamber, said that traditional lenders typically avoid microlending because it isn’t cost effective. But these microloans were built to not get money back, but to help the community.

There are also benefits for business owners of color who face roadblocks receiving traditional loans. 

Dr. Linda Scott, president of Generational Changes — a Fresno-based treatment and therapeutic counseling provider — said there are purposeful roadblocks to getting loans, which she has personally experienced. Leveraging funding has been difficult for some business owners, even when their portfolio looks good. 

“You have to think out of the box when you come into a time where you’re running into barriers and roadblocks,” Scott said.

She stressed the importance of a “rainy day fund,” a piece of advice from her late father. She says it was the best business advice she’s ever received. 

Grundy said the City of Fresno is involved as a trustee to evaluate and endorse the businesses involved in the microloan program. 

Grundy encourages local banks to get involved by considering putting in matching dollars. A bank could put in $1,500 and Kiva will match it, which Grundy says is a great way to support local businesses. 

“We are steering a local government that is owned by all of its people,” Grundy said.