Chattanooga kicked off the 2018 Startup Week Monday by launching a local version of an interest-free, kickstarter-style lending program that has already aided more than 3 million borrowers around the world.
Backed by the city of Chattanooga and four local foundations — Lyndhurst, Footprint, Benwood and the Community Foundation — the Company Lab (CO.LAB) is opening a local office of the Kiva loan program. Since its start in 2005 in San Francisco, Kiva has helped lenders provide as little as $25 to business projects they like to help fund loans of up to $10,000 to help entrepreneurs get their businesses started.
"This gives us another chance as a community to give support, encouragement and dollars to entrepreneurs who are just getting started," CO.LAB Director Marcus Shaw said Monday night during the group's "Will This Float" pitch by the first half dozen Kiva loan applicants in Chattanooga. "This gives us a tremendous opportunity to engage many more people in investing in great startup ideas."
Those who are qualified and raise initial funding to be on the Kiva platform will be able to pitch their ideas and loan requests to lenders all over the world who can review business and nonprofit startup ideas on the Kiva website.
"With as little as $25, you can help people around the world create opportunity for themselves, their families and their communities," Kiva claims in its pitch to borrowers.
The local Kiva initiative is an outgrowth of the recommendations from a Minority Business Task Force which sought to diversify and expand the startup business initiatives in Chattanooga.
"This is another important way in which this "city of creators" is growing," Chattanooga Mayor Andy Berke said in a message to those gathered for the launch of the local Kiva initiative.
At Berke's urging, the city budgeted $43,000 this year to establish a position at CO.LAB to help review, refine and promote business ideas for the Kiva platform.
Katie Hendrix, the program manager for Kiva in Chattanooga, said Kiva is designed "to eradicate financial exclusion" and broaden access to capital for people in all classes, industries and locations. Local Kiva organizers hope to attract many local lenders willing to put $25, $50 or $100 into a loan for promising businesses. When such loans are repaid, they hope lenders will recycle those funds into other promising ideas.
Over the past 13 years around the globe, Kiva has attracted 1.8 million lenders who have lent more than $1 billion to aid more than 3 million borrowers in 81 countries. By requiring those on the platform to raise some of the money from their own support network and to be endorsed by local Kiva groups like CO.LAB in Chattanooga, Kiva boasts a 96.9 percent repayment of the no-interest loans.
On Monday night, six Kiva borrowers pitched their plans to prospective Kiva lenders during the "Will This Float?" competition. The ideas ranged from a chocolate truffle company founded by a Ghana native to a cleaning service started by a South American emigrant.
The winner of this year's "Will This Float" contest was GMST Transportation, a non-emergency transportation company focused on providing van trips for veterans, low-income and disabled persons for medical and other visits. The firm was started by Reginald and Cheryl Yearby and is seeking a $2,000 loan to help maintain and operate its four vans.
Contact Dave Flessner at email@example.com or at 757-6340