Before you decide if seeking a loan through Kiva you may have some questions – and you should! Seeking a loan is serious business, but we're here to help in this process, and if it is right for you, to support your business as a Kiva Trustee!
What sets Kiva apart from other micro-lenders?
Kiva is an international nonprofit organization founded in 2005 with a mission to connect people through microlending by allowing its members to support small businesses and entrepreneurs with loans instead of donations. Because Kiva comes with a community of users who regularly invests in small businesses through the site, most Kiva loans are funded by 80 percent of the Kiva community and only 20 percent friends and family. Unlike other funding platforms, this means that there is less of a burden on the Kiva borrower to rally support in their personal circles, making it more viable for people who may not have a wide network of supporters who can give. As a Kiva U.S. partner and Trustee, Springboard can invite U.S. artist entrepreneurs to apply for loans and endorse those artists on the Kiva site. With Springboard’s endorsement, U.S. artists can access greater funds and receive automatic loan matching making it even easier to reach their fundraising goals. Through accessible, impactful and cooperative lending, we aim to support artists striving to create a sustainable future for themselves, their communities and the world.
Why should I apply for a Kiva loan endorsed by Springboard?
We know that finding the right loan to fund your business can be a challenging process, especially for artist entrepreneurs. That’s why Springboard has partnered with microlending firm Kiva to provide great options for U.S. artists to access the capital they need to invest in and expand their creative businesses. Kiva is not a bank or microfinance institution, which means that most of the loans fundraised on their website are not provided by Kiva directly, but through a global network of individual lenders and partner organizations like Springboard. Through a Springboard endorsed loan artists can have access to up to $25k in capital and automatic fund matching as well as Springboard’s suite of business planning support, although the majority of loans are in the $5,000-$10,000 range. For more information or to apply through Springboard, please see the main Springboard Kiva page.
What does it mean to get endorsed by Springboard?
Springboard endorsed Kiva loans are designed to supports artist entrepreneurs in the U.S. with interest-free loans which are crowdfunded by lenders across the globe and are paid back over the course of a couple of months to a few years. Along with the endorsement, Springboard provides matching funds to help artists reach their fundraising goals on Kiva’s platform and a wide network of business support to help artists build and expand their businesses.
How does Springboard’s loan matching work?
Thanks to our partnership with Kiva, we are able endorse loans for U.S. artist entrepreneurs and offer 1-to-1 loan matching. This means that if you receive $25 towards your total fundraising goal, Springboard will also lend $25 to you as well -- essentially doubling the contribution made to your loan. Matching will occur so long as matching funds are available that meet the criteria of that loan and the matched amount does not exceed the total loan amount.
Ok, I am interested in a Kiva loan endorsed through Springboard. What steps do I need to take?
Before applying for the loan we recommend first that you read through Kiva’s eligibility guide to see if you qualify for a loan and what items you will need during the application process. Next, visit Springboard’s business skills page to access our toolkits and business support which will help increase your eligibility for endorsement. The most eligible candidates are artists who have clear business goals and a stable plan for repayment. After completing your application, a member of the Kiva U.S. team will reach out to you to better understand the business and ask any follow up questions. After reviewing the completed application, Kiva will determine if you qualify for the full loan request. If you have any questions during the application process, please email firstname.lastname@example.org.
Do I pay any interest on my Kiva loan?
No, Kiva never charges interest on loans. 100% of the funds lent on Kiva go towards funding loans.
How many times can I apply for a Kiva loan through Springboard?
U.S. borrowers can apply for Kiva loans through Springboard as often as needed so long as any past loan balances are paid off in full.
What is social underwriting and how does Kiva assess my creditworthiness?
Rather than assessing credit history and financial statements, Kiva relies on trust networks as a measure of creditworthiness. For that reason, applicants are required to secure initial lenders from within their own network prior to fundraising on Kiva (and sometimes that can be a Trustee such as Springboard). The benefits of social underwriting are it helps build credit, offers a variety of lending options, is more accessible to more people and addresses income and wealth inequalities plaguing underbanked and underserved communities. To learn more and apply for a Kiva loan endorsed through Springboard, please see the main Springboard Kiva page.
What is the due diligence process on Kiva loans?
Kiva U.S. staff take several steps to vet and verify the borrower’s identity. Borrowers are also endorsed by a Trustee organization, like Springboard, or members of their community in a process we call social underwriting. A borrower must either have the endorsement of a Kiva Trustee, an organization or individual that works to connect borrowers with Kiva, or successfully invite members of their own social networks to support their loan before the loan is able to fundraise publicly on Kiva. Because their own connections, friends and family are putting their own dollars in, we believe social underwriting increases borrowers’ commitment to repaying their loans. More information is available on Kiva’s due diligence page.
What happens to Springboard's endorsement if my loan doesn’t fully fund on Kiva?
Usually, loans on Kiva have 30 days to successfully fundraise. If a loan doesn’t fully fund (or reach 100%) when it’s posted on Kiva, borrowers won't receive their loans and the fundraised money, including any matched funds from Springboard, will be returned to the lender's Kiva account. We know it can be hard to see artists miss their funding goals, which is why we at Springboard offer our endorsement to borrowers as well as 1-to-1 loan matching in order to create more positive impact.
How does the money for the loan get disbursed to me?
Once the loan is fully crowdfunded on Kiva, funds are transmitted to the borrower via PayPal.
How do my repayments get back to lenders?
Borrowers use PayPal to transmit repayments and Kiva deposits those repaid funds into individual and Trustee Kiva lender accounts. As lenders are repaid they can withdraw their money, donate it to Kiva, or relend it to another borrower.
How does Kiva manage borrower delinquency?
Loans are marked as delinquent when a borrower has paid back less money than owed to date, as indicated on their repayment schedule. In traditional finance, borrowers can be subjected to high interest rates, late fees and inflexible collection methods. Kiva takes a more compassionate and understanding approach with direct loans. When loans become delinquent, Kiva follows up with the borrower and Springboard to create an open channel of communication with the goal of understanding the cause of late repayment. We can work to create new repayment schedules they can follow towards eventual repayment of their loan, and also encourage borrowers to update their lenders. We set the expectation that the borrower must repay in full, even if their business fails.
What happens if I can’t repay the loan?
If a borrower is behind on paying back a loan, Kiva may try to reschedule repayments on the delinquent loan in order to make it possible for the borrower to eventually repay. This is common practice in microlending. But sometimes, even with these efforts to be flexible, borrowers simply can’t repay and loans end in default. When a Kiva loan defaults, we notify all contributing lenders by email and these lenders can consider the remaining amount outstanding as a loss. Borrowers can’t apply for another loan on Kiva unless they’ve repaid previous loans.
Why was I not approved for a loan?
While Kiva is not able to disclose specific information on the internal review process, please be assured that each application is reviewed closely based on the loan requirements for artists applying though Springboard. If you have further questions about the application process, please feel free to review application guidelines here: http://www.kivaushub.org/your-application
Does Kiva report on my credit score?
For business owners who started applications after December 2015, Kiva is reporting on their business credit score. This means that when you submit an on-time payment on your Kiva loan, Kiva reports positively on your score, and if a payment is late they report negatively on your score. While business credit is different than personal credit, personal lenders may still look at their business credit report before deciding whether to give them a personal loan. Through Springboard’s partnership with Kiva, we hope that more of our endorsees can access larger forms of capital from other lenders, and at a lower interest rate, in the future.