Kiva Review

Term Loan 

Getting a loan through Kiva isn’t like working with other lenders. The application largely relies on social capital rather than a financial credit score, and you need minimal business history in order to qualify. Loan amounts are smaller but can be a great starting point for new businesses with limited access to capital.

Evaluation

Kiva offers a unique loan program for business owners in the U.S. You can crowdfund a small loan from both strangers and people you know. When it comes time to repay the loan, you’ll enjoy more affordable payments because there is no interest tacked onto the loan. However, it does take some time to apply and raise funds through the Kiva platform. Consequently, it’s not ideal for time-sensitive funding needs, but these microloans can help business owners execute growth plans that are a few months away.

Slow Funding Time

Kiva has a unique application and approval process, which ultimately results in a slower funding time compared to other options. Expect the entire process to last about two months from start to finish. Here’s what’s happening each step of the way.

The initial pre-qualification application takes 30 minutes to an hour to complete. From there, you’ll get a call from a Kiva team member who may have some additional questions about your business. Expect this call to take place within two weeks of filling out your application. 

Next, you’ll get a loan amount offer and will have 15 days to invite family and friends to contribute to your loan. Kiva calls this “social underwriting” and it’s used instead of a credit check. In other words, if there are people in your life who trust you enough to pay them back, Kiva feels comfortable opening your application to the broader community.  

After that, your loan will be listed on the Kiva website to fundraise from their base of 1.6 million individual lenders for up to 30 days. While these extra steps provide financing opportunities that may not otherwise exist for some small business owners, Kiva loans definitely don’t provide a fast path to funding.

Microloan Amounts

Kiva loans are definitely considered microloans, with the maximum amount at just $15,000. For more established companies, this may not seem like a lot. But for new and/or small businesses, $15,000 could make a huge difference in investing in supplies, inventory, equipment, or even part-time help. 

Business owners who want to launch or scale their offer can use the funds in any number of ways to take their company to the next level, especially if you’re itching to get out of the “side hustle” phase.

Completely Fee-Free

This is an area where Kiva really stands out from other small business loan options. Borrowers in the U.S. pay no interest on their loans and no other fees. Your monthly payment amount is solely based on your principal balance, split evenly across your repayment period (up to 36 months). Kiva will determine how much you can reasonably afford to pay back, which dictates your loan amount. 

The individuals who make loans through Kiva often tack on extra cash as a donation to help fund the non-profit’s administrative costs. Kiva also receives grants and other raised funds to cover operating expenses.

Alternative Requirements to Qualify

You won’t find the standard business loan requirements with Kiva, like time in business, annual revenue, and credit score. Instead, you’ll need to meet the following eligibility requirements, which are a little bit different than usual:

• You’re at least 18 years old
• You and your business are both in the U.S.
• Loan funds may only be used for the business
• Your business doesn’t operate in the following areas: multi-level marketing, direct sales, illegal activities, or financial investing (like stock trading)
• Financial requirements: no current foreclosures, bankruptcies, or liens
• Social capital: must have at least a few friends or family contribute to your loan fund

Monthly Repayment

Kiva loans come with a fixed monthly payment plan so that it’s easy to budget your pay-off strategy. There’s no grace period and payments start one month after your loan funds are disbursed. You can make manual payments each month or set up automatic payments; either way, all payments must be made via PayPal.

Monthly payments are typically better suited for small businesses compared to weekly or daily payments required by some lender. Especially if you’re a small business, you may not yet have consistent cash flow to be able to support more frequent payments. A monthly schedule gives you more time to grow your revenue and make your payments to Kiva. 

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*The information contained in this page is Lendio’s opinion based on Lendio’s research, methodology, evaluation, and other factors. The information provided is accurate at the time of the initial publishing of the page (September 27, 2022). While Lendio strives to maintain this information to ensure that it is up to date, this information may be different than what you see in other contexts, including when visiting the financial information, a different service provider, or a specific product’s site. All information provided in this page is presented to you without warranty. When evaluating offers, please review the financial institution’s terms and conditions, relevant policies, contractual agreements and other applicable information. Please note that the ranges provided here are not pre-qualified offers and may be greater or less than the ranges provided based on information contained in your business financing application. Lendio may receive compensation from the financial institutions evaluated on this page in the event that you receive business financing through that financial institution.