Kauffman Foundation to Invest $1.2 Million in Microfinance Pilot Program

Kansas City, Mo., Nov. 14, 2017 (GLOBE NEWSWIRE) — The Ewing Marion Kauffman Foundation announced today a $1.2 million investment in a new microfinance pilot program, the KC Microfinance Portfolio, which will provide access to capital for underserved entrepreneurs and help sustain microlenders. The pilot program is being spearheaded by the Kauffman Foundation and four microfinance lenders who specialize in small business lending – AltCap, Women’s Business Center, KC Hispanic Economic Development Corporation and Justine PETERSEN. All four microlenders will receive grants of $300,000 from the investment.

The KC Microfinance Portfolio pilot program will change the way these nonprofit microlenders capitalize their loan pool funds for lending. Working with local and regional banks, the program offers capitalization opportunities for the nonprofit microlenders and Community Reinvestment Act credit opportunities for local banks. 

“This pilot program has been years in the making, with exploratory work now complete, and we are thrilled to bring it to life in KC,” said Nathan Kurtz, senior program officer in entrepreneurship for the Ewing Marion Kauffman Foundation. “It is part of our zero barriers initiative to help reduce obstacles that have traditionally kept people out of entrepreneurship. Our hope is that if the pilot program can work here in Kansas City, it can work anywhere.”

Through research, the Kauffman Foundation learned that many entrepreneurs struggled to gain access to capital to maintain their small businesses. In an effort to expand its mission to help individuals attain economic independence and entrepreneurial success, The KC Microfinance Portfolio was born. It was inspired by a similar initiative out of Chicago led by business expert and Revolve Principal Jonathan Brereton, now a consultant for the Kauffman Foundation’s program.

“In Chicago we learned the key to improving sustainability among microlenders is developing the ability to sell microloans to local banks,” said Jonathan Brereton. “This allows microlenders to reduce their operating costs and helps banks to fulfill their Community Reinvestment Act requirements.”

The KC Microfinance Portfolio loans will be distributed early to mid spring 2018, and sold into banks in summer 2018. Initially these loans will provide funds to 20-30 businesses, but have the potential to help a much larger pool of local entrepreneurs.

“The scalability of the investment is most fascinating,” said Brereton. “While the Kauffman Foundation is making an initial grant, that investment truly sustainable if you think about the capital available to entrepreneurs turning over year after year. Through this program, KC microlenders can help underserved entrepreneurs for years to come.”

About the Kauffman Foundation

The Ewing Marion Kauffman Foundation is a private, nonpartisan foundation that works in entrepreneurship and education to create uncommon solutions and connect people to the tools they need to shape their futures and be successful. The Kauffman Foundation works and is based in Kansas City, Missouri, and uses its $2 billion in assets to collaboratively help people be uncommon. For more information, visit www.Kauffman.org and connect with us at www.twitter.com/kauffmanfdn and www.facebook.com/kauffmanfdn.

About AltCap

Established in 2005, AltCap is a mission-driven, certified CDFI and SBA lender that provides debt capital through a wide range of innovative financing products that support critical investments in communities and to small businesses overlooked and not adequately served by traditional financial institutions.  Whether it is through the New Markets Tax Credit (NMTC) Program, microloans, or any of the other alternative capital sources we offer, AltCap is committed to delivering critical financing to support job creating small business investments and catalytic, community driven real estate development projects in our service area. 

About Women’s Business Center

The Women’s Business Center was established in 2000 as a program of the Enterprise Center of Johnson County. Partially funded by the SBA, its mission is to develop and mentor primarily women-led businesses. WBC services include entrepreneurial education classes; seminars and workshops on a variety of business topics such as certification, sales and marketing; offering one-on-one technical assistance to businesses; funding to unbankable clients through the WE-Lend microloan; and funding high-growth businesses through the Women’s Capital Connection, a female angel investor group. The WE-Lend microloan provides loans ranging from $2,500 to $25,000 to startups and growing businesses throughout the Kansas City metro.

About HEDC Impacto Fund Inc.

As a CDC, The Hispanic Economic Development Corporation (HEDC), is a private 501(c)(3) nonprofit in Kansas City, Missouri and serving Kansas. Established in 1993 HEDC’s mission is to create and implement economic development initiatives which improve the lives of Latinos within the Kansas City Metro area. This mission is accomplished through programming that focuses on strengthening existing Latino and underserved small businesses and cultivating the entrepreneurial spirit of these underserved start-ups. By providing bilingual comprehensive business acceleration services needed to operate, sustain, and grow the economic opportunity for the low-income business, in high poverty service areas in the Greater Metropolitan Kansas City Area. In 2009 HEDC responded to the demand for affordable capital for small business and launched the Impacto Fund Inc. as a microloan fund providing loans from $200-$50,000 to startups and growing business in the underserved communities. 

About Justine PETERSEN

Founded in 1997, Justine PETERSEN furthers the legacy of social worker Justine M. Petersen, a pioneer in asset-development for low and moderate income families.  As the nation’s leading microlender for the U.S. Small Business Administration, Justine PETERSEN assists historically underserved small businesses at every stage of development with access to safe and affordable capital.  Justine PETERSEN and its subsidiary CDFI (community development financial institution) offer homeownership preparation and retention services, financial education and a suite of credit building products and services.  Justine PETERSEN serves the state of Missouri, eastern Kansas and downstate Illinois.

About Revolve

Revolve was founded to provide solutions to the toughest challenges of community development lenders.  Revolve envisions an ecosystem of lenders able to rapidly growth through innovative, turn key tools that make liquidity, self-sufficiency, and mission impact revolve faster with each loan disbursed.  For more information visit revolvecap.com.

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