Wisconsin entrepreneurs are unlocking success by turning to Kiva.org for crowd-funded micro-loans that enable them to raise the capital they need to grow and thrive.

That good news doesn’t always end there for businesses seeking the zero-interest loans to make improvements, purchase supplies, or expand markets.

Businesses in communities that are part of the Wisconsin Main Street or Connect Communities programs, and which are at least 50% owned by women, minorities, or military veterans, are eligible to have their Kiva loans matched by up to $5,000 through a WEDC program run in cooperation with Kiva aimed at building entrepreneurship.

Loan amounts are determined following a review process, but can accommodate projects of up to $15,000 on a zero-interest basis.

These relatively small loans can make a powerful difference for small businesses getting their footing.

WEDC supports a one-to-one match for the first $5,000 qualifying businesses raise on the platform, accelerating their fundraising campaigns and reducing the number of lenders they need to secure on the platform.

Janela Smith’s business, Sheabrojae’s Natural Expressions in downtown Racine, has received two Kiva loans.

“I’d encourage anyone starting a business to get involved with Kiva,” said Janela Smith, owner of Sheabrojae’s Natural Expressions in downtown Racine, whose business has received two Kiva loans.  “Kiva loans can help you with supplies, your marketing, your logo, the little things you need to polish your business, especially if you’re in a downtown area.”

Kiva, a San Francisco-based nonprofit begun as a way to build a more financially inclusive world, serves borrowers in more than 70 nations on five continents. An alternative to crowdfunding models that require businesses to generate donor rewards or take a fee from each contribution, Kiva offers a straightforward lending transaction that allows lenders to support local businesses they care about.

Here’s how it works: After a borrower applies for a loan and their qualifications are endorsed by a Kiva-approved trustee (often a microfinance institution or a nonprofit), the project is posted on Kiva’s website. Lenders can browse the website and choose projects to support with contributions that start at $5. When a borrower repays a specific lender, that contribution can go to fund another project, and the cycle continues.

WEDC has a revolving loan pool of close to $100,000. As the loans are repaid through Kiva, that money again becomes available for other qualifying projects. Loan requests under WEDC’s program are endorsed by the Wisconsin Women’s Business Initiative Corporation.

“Our goal with the program is to provide much-needed financial support to help our small businesses access capital to start and grow their business to meet the needs of customers,” said Errin Welty, WEDC’s senior downtown development director.

The WEDC program has helped borrowers leverage $462,500 in Kiva funding. A total of 90 borrowers have been endorsed and 53 have been funded. (Those 90 include some who ultimately decided not to participate and others whose loans are still in process.)

Smith started her business, which offers handmade creams, lotions, and jewelry, as a way to fight severe depression following the death of her mother. Her passion for business helped her free herself of that depression.

“I’m a fighter by nature and I didn’t think depression was my destiny,” she said. “I turned a negative into a positive with something that I love, and Kiva has helped me expand my business.”

Smith received a $3,000 loan in 2017 and a $10,000 loan this year. She used loan proceeds to purchase packaging materials and essential oils, to fund marketing activities, to pay vendors, and to establish a “Mix, Whip and Mingle” event in which families come to her business to create their own creams, lotions, and body washes, choosing their own fragrances and butters.

“With the Kiva loan, you feel much better about saying ‘I’ve got this. I can make this thing work,’ instead of trying to figure out how you’re going to make ends meet,” Smith said.

Art on the Town in downtown Beaver Dam was able to improve the building interior, buy materials, and purchase pottery wheels with the help of a Kiva loan.

In downtown Beaver Dam, Kris Schumacher-Rasmussen also put Kiva micro-loans to work at Art on the Town, which offers classes, paint-your-own pottery, drop-in artmaking experiences, exhibition space, and the use of its studio and materials for people looking to make art.

The business grew from a mobile and pop-up operation when she and her husband leased a downtown storefront in 2019. Their first Kiva loan was for $10,000 that same year and, with money from community fundraisers, they were able to improve the building’s interior, buy materials, and purchase pottery wheels.

“The zero-percent Kiva loans were amazing. The conventional loans we looked at would have made it difficult just starting out,” Schumacher-Rasmussen said. “I had no idea WEDC was going to jump on board. That was exciting.”

The couple purchased the building in June 2022. A second Kiva loan for $15,000 will help fund more pottery wheels, upgrades to the building’s back yard, signage, and renovation of the building’s second floor, providing new electrical components and a gallery with rentable space for private events.

“The whole idea is to create more community for individuals, families, kids, adults—just to come out and have a nice place where they can be together and do creative things together,” she said.

A second Kiva loan will help Art on the Town to create a gallery with rentable space for private events.

Kiva can also help stimulate local investor involvement that snowballs over time. “Using the Kiva platform not only provides low-barrier-to-entry loans for these small borrowers but also creates local investor pools around the state that can use repaid dollars to invest in additional local projects in the future,” Welty said.

For example, in Stevens Point, a lending team has just been formed on the Kiva platform—called Central Wisconsin Micro-Lenders—that notifies prospective lenders about area projects seeking loans. Seven members have signed up so far.

“Every week, I check in on all the loans being made in Wisconsin, to share opportunities that exist throughout central Wisconsin,” said Chris Klesmith, one of the group’s organizers and the economic development specialist for the City of Stevens Point. “We’re hoping to increase awareness of the tool and connect more investors to local entrepreneurs. Hopefully, we can also open people’s minds about what it means to be an investor.”

Four businesses in downtown Stevens Point have received Kiva loans since 2022, leveraging a combined $35,000 for projects ranging from expanding and hiring staff to buying equipment and retrofitting storefronts with shelving and furniture.

In a time of rising interest rates, Klesmith said small businesses need ways to cut costs, and Kiva fits that profile.

“It seemed like a program that we could deliver to business owners who needed gap financing but couldn’t afford the interest rate on commercial loans from traditional lenders,” he said. “We don’t want to replace traditional loans, but we want businesses to add this to their menu of financing options.”

Janela Smith said the zero-interest loans remove anxiety over making conventional loan payments and allow business owners to focus on their passions.

“It makes it a lot easier to be efficient in your business,” she said. “Kiva is a good place to get started. Don’t give up on your dreams. Don’t give up on what you love. Those bricks that are thrown at you—just take those bricks and stand on them, build on them, and keep moving.”