Milwaukeeans looking to start a business now have another funding source.
For years, a company called Kiva helped finance startups in developing countries. These days, Kiva is also providing micro loans in the U.S., and on Tuesday, Milwaukee will become its latest city.
Melissa Tashjian started her company Compost Crusader last April.
“I pick up all types of food waste from different types of businesses - including cooked meat, dairy, breads, pastas, soiled paper napkins, paper plates. I divert it from the landfills so I take it to a composting farm in Caledonia called the farms compost,” Tashijian says.
Tashijian has around 15 customers but needed more money to expand. Kiva came to her rescue with a $5,000 interest free loan.
“I knew that at some point the current truck that I have wasn’t going to be large enough. And so being able to get the Kiva loan put me in a position for when larger truck kind of presented itself, I was in a position to act really quickly. And actually about two weeks ago I purchased a 25 yard garbage truck, rear loading compactor,” Tashijian says.
Kiva is a crowdfunding company that allows people to invest small amounts of money in businesses they deem worthy. Its loans are for no more than $10,000.
Wendy Baumann is president of the Wisconsin Women’s Business Initiative Corporationm, or WWBIC. It provides small business loans and help to entrepreneurs. WWBIC is partnering with Kiva.
“Many of these individuals that we’re referring to Kiva are the individuals that at this time we cannot actually provide a loan. We actually have to say at this point, we’re not comfortable extending a small loan, but let’s see if maybe we can get a Kiva loan,” Baumann says.
Baumann admits the loans can be risky, but she says it’s sometimes people are worth the risk.
“This is providing a chance, and it is shared risk because the lenders in this case could lend as small as $5. And if these businesses are gung ho, they have these ideas and they’re not going to let go of them and they want to advance, they’re going to probably try this funding source. And if that goes well, hopefully, they look at coming back to WWBIC to then expand their business.
According to Baumann, 85 percent of the businesses in Wisconsin are micro, which means they employ fewer than 12 people. Kiva Milwaukee has already helped fund six businesses with about six more in the pipeline. While Kiva is already helping businesses here find funding, Tuesday will mark its official arrival.