Jennifer London: What’s the connection between the owner of a party store in San Fernando, a designer in Venice who creates one-of-a-kind caps, and a downtown loft dweller who sells vintage furniture and accessories? The answer is as close as Kiva.org, the website of the internationally-acclaimed do-good nonprofit which funds microloans in needy countries. Kiva, which means unity in Swahili, started in 2005. A group of ordinary people loaned about $3,000 to small entrepreneurs to East Africa. Today, it’s distributed more than $300 million throughout the world. So what are Maria, the party store owner, Kareem, the hat guy, and Jaqueline, the vintage store furniture dealer – what are these three doing on Kiva’s website? It’s because Kiva is now giving loans to needy American business right here in Los Angeles.
So what are Maria, the party store owner; Kareem, the hat guy; and Jacqueline, the vintage furniture dealer, what are these three doing on Kiva's website? It's because Kiva is now giving loans to needy American businesses right here in Los Angeles.
Roberto Barragan: Money is available to grow your business. Money is available to hire people.
Jennifer London: Roberto Barragan runs the Valley Economic Development Center, which is specialized in mini-loans for almost twenty years. He lobbied Kiva to a partner with V.E.D.C. to start giving out loans in L.A.
Roberto Barragan: Small business has always been part of every recovery this nation has experienced. However during this current recovery, it's been extremely difficult for small businesses to maintain that leading edge, because of lack of capital.
Jennifer London: It's a problem Maria Ramirez knows well. Maria couldn't qualify for a regular bank loan for an all too regular reason.
Maria Ramirez: I was never able to get a loan with the banks, because my credit is unhealthy..
Jennifer London: Maria had a money making idea: to buy a bunch of tables and chairs to rent out for parties, but where could she get a $2,000 dollar loan with reasonable interest?
Roberto Barragan: If your credit is not bad, and we can show that you can pay back the loan over one year to three years, then we're able to approve it.
Jennifer London: Since she could rent out the tables and chairs over and over again, it was a safe bet that they'd pay for themselves in no time. Since Maria got the loan, her tables and chairs have been rented every weekend.
The amount of the loans varies. They can be as little as $500 or as much as $10,000. Don't confuse microloans with charity. Think of it like the old Chinese proverb, 'give a man a fish, feed him for a day.’ That’s a charity. ‘Teach a man to fish, feed him for a lifetime.' That’s a microloan.
Kareem Janey: They're really exciting. Really fun. Celebrities like them, and they're really popular right now in L.A.
Jennifer London: Kareem Janey used to stand on the Venice boardwalk outside this trendy hat boutique, hustling his customized caps one-by-one, but now he's inside the store getting top dollar for his expanded inventory, thanks to a $6,000 Kiva loan.
Kareem Janey: Banks are kinda black and white. 'What's your credit score? See ya later,' and Kiva, I think, works with companies and has an interest in seeing you succeed.
Jennifer London: Although he still creates the designs, Kareem can now afford to buy more caps and pay others to paint them.
Kareen Janey: You guys are from Europe?
Tourist: Yeah, the Netherlands.
Kareem Janey: Nice. You have to take something like this home. It's so unique, and it represents L.A. culture. You'll get all the chicks, when you go back. Guaranteed!
Jennifer London: He also used the Kiva money for a catalog and to update his website.
Kareem Janey: I've actually worn caps to events, and somebody wanted to buy it off my head. Actually, there was a bidding war going on for the cap that I was wearing, and it went to the highest bidder.
Jacqueline Sharp: If we could get more small loans to more small businesses and entrepreneurs, I think we could put ourselves back to work.
Jennifer London: Jacqueline Sharp's Forte at Fort is finding unusual vintage pieces, making them over again, and making them into something even more unusual, like this old magician's cabinet.
Jacqueline Sharp: We put steel inlay on the outside, so you can use magnets. The inside is perfect for storage, shelves, drawers.
Jennifer London: How much was the loan, and what did you do with the money?
Jacqueline Sharp: The loan was for $5,000, and with that, I was able to buy a welder. The welder was $1,000 and then to bring someone on part-time, so I've been able to pay an employee. Where I was at, I felt stuck. I was doing everything myself. So to be able to get the loan, and be able to bring someone on part-time, it's made all the difference.
Roberto Barragan: People are not waiting for the next big company to come to L.A. to get hired. People are saying, ‘You know what? I can't wait anymore. Maybe my unemployment is gonna run out. I need to do something for myself and for my family, and I have an idea.’
Jennifer London: I’m Jennifer London, for “SoCal Connected.”
- Kiva: Kiva.org
- SoCal Connected: Microloans Fulfilling Business Owners' Dreams in L.A.
- Food: New USDA Microloan Program Offers Funding for Small Farmers
Every once in a while, small business owners need a helping hand to get their business up and running. That's where Kiva comes in.
Kiva is an internationally-acclaimed nonprofit organization dedicated to connecting struggling entrepreneurs with microloans to help grow and maintain their small businesses.
Since 2005, Kiva has helped distribute millions of dollars in needy countries with the assistance of key lenders and microfinance institutions. In 2012, it expanded its global mission by connecting potential lenders with entrepreneurs in Los Angeles.
Maria Ramirez, a small business owner of a party store in San Fernando, recalls being forced to borrow money from shady owners at a high interest. To add to the stress, Ramirez couldn't qualify for a regular bank loan because her credit was unhealthy. Kiva has helped Ramirez and countless other L.A. entrepreneurs rebuild and maintain their small businesses with microloans starting as little as $500 to $10,000.
In this 2012 "SoCal Connected" story, Jennifer London speaks with entrepreneurs and microloan experts to find out more about the struggles and triumphs of maintaining and growing a small business.