Sometimes small businesses need a little help getting started.
But when you have few assets, getting a bank loan can be very difficult.
That’s where Kiva Zip — a crowd-sourced, interest-free micro-loan service — comes in.
“I tried several traditional bank loans. They turned me down,” said Carl Lewis Sr., head chef and owner of the 48th Street Grille.
Lewis came to the U.S. from Jamaica in 1980 and worked for decades as a chef.
“I came from a humble background in Jamaica. I was raised by a single parent. I was raised in a foster home because my father was not able to give me the support that I needed,” Lewis said.
But Lewis dreamed of developing his catering business into a restaurant. He got the ball rolling with a $5,500 Kiva loan, he said.
Lewis expressed his gratitude for support from The Welcoming Center for New Pennsylvanians’ Global Enterprise Hub, which served as guarantor for his Kiva Zip loan.
That success led to a loan from the Hebrew Free Loan Society of Greater Philadelphia, and then to a loan from First Trust Bank. In October, he opened his restaurant at 48th and Spruce streets.
“I want to give back to this community,” he said. “Why can’t we have a place in our community where we can sit down and have a cup of coffee or go on a special occasion and have a nice meal?”
Fourteen Philly businesses have gotten loans funded through Kiva, leading the group to hold an official city launch at Lewis’ restaurant on Tuesday.
Kiva businesses repay their loans to lenders, who can re-loan or keep the funds.
For Pete Merzbacher, 25, creator of Philly Bread, a $5,000 Kiva loan paid for machine repairs and wholesale flour purchases.
Banks had turned down his loan applications.
“They were like, ‘No way.’ It was no chance,” Merzbacher said. “You have to have a minimum three years of tax returns and cash flow reports. I’d been in business for a year and a half, so I came up way short on all their criteria.”
Now Philly Bread is sold at Greensgrow, Reading Terminal, through Philly Foodworks CSAs and at other locations.
“Unless you got gas in your tank as a small business, it’s real hard to grow,” said Premal Shah, president of Kiva. “We want to jumpstart the ‘lend local’ movement.”
Kiva Zip, the U.S. version of Kiva, uses crowd funding to make interest-free loans to entrepreneurs.
Nine of 10 small businesses that apply for a loan get funded within 45 days, with an average of 150 donors chipping in per loan, according to Kiva.
Visit zip.kiva.org to find more Philly businesses in need of loans.