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Guide to Kiva: crowdsourced microlending for small-business owners

By crowdsourcing money for loans from donors, Kiva makes lending available to those with poor credit


Entrepreneurs and small-business owners who’ve had difficulty qualifying for traditional financing might have better luck with Kiva, an online lending platform that offers crowdfunded loans of up to $15,000 to U.S.-based businesses.

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With nonessential retailers forced to close and most Americans under stay-at-home orders, it’s no secret that small businesses in the U.S. are struggling amid the coronavirus pandemic.

Even worse, there’s a good chance that many of those stores and restaurants won’t be able to reopen once the crisis has passed.

From the Small Business Administration’s Economic Injury Disaster Loan program to private grants, businesses in financial distress are exploring all possible avenues to pay rent, make payroll and just stay afloat until the economy returns to some semblance of normalcy. The problem is that high demand, limited availability and other issues are causing delays in getting money into the hands of businesses that need it most.

Though not suitable for everyone, an online lending platform known as Kiva U.S. may help some small-business owners fill in the gaps as they await assistance from the government and other potential funding sources. Here’s what you need to know about Kiva.

See related: Funding a small business with a low credit score, no ITIN or EIN

What is Kiva?

Kiva is a crowdsourced microlending platform that connects U.S. businesses with potential funders around the globe. Designed for small-business owners and entrepreneurs who are often excluded from other financing opportunities, Kiva doesn’t evaluate loan applications based on credit scores or other traditional criteria. It instead uses a process known as social underwriting, relying on a business owner’s “trust networks” – the support of their friends and family – to help determine their creditworthiness and character as a borrower, as well as their overall chances of success.

See related: Women in business: Making it as a female entrepreneur

With loan amounts up to $15,000 and flexible repayment options, a variety of business owners, from farmers and jewelry makers to caterers and marketing professionals, turn to Kiva for short-term financing needs. Best of all, most direct loans obtained through Kiva charge 0% interest — and no, that’s not a typo. (If you’re based internationally, it’s likely that your loan will be administered through one of Kiva’s Field Partners, in which case you would pay interest. For the purposes of this guide, however, we’re focusing on Kiva U.S.’s direct loans.)

Though you might be hesitant to hit up people you know for money, loan amounts can be as low as $25, thus the “microlending” aspect of the Kiva platform.

How Kiva works

Kiva’s application and underwriting process is a lot different from the traditional bank experience. While the eligibility requirements for a Kiva loan are mostly flexible, you need to meet the following criteria to apply:

  • You have to be at least 18 years old.
  • You and your business must be based in the U.S., and your business cannot involve direct sales or multilevel marketing, illegal activity (such as gambling) or financial investing.
  • You can’t be in foreclosure or bankruptcy, and you can’t be under any other liens.
  • You have to be willing and able to demonstrate “social capital” by getting loans from a specific number of friends and family members (more on that later).

Application period

To begin, you need to create an account on the Kiva borrower portal, after which Kiva sends a verification code to your email. Once you’ve verified your account, you’re automatically redirected to your homepage, where you’ll click on “start/continue application.”

According to Kiva’s FAQs, the application should take between 30 minutes and one hour to complete. To streamline the process, gather the following information about yourself and your business upfront:

You’ll have to create a loan profile during your application, which will be posted to Kiva’s website if and when you reach the public financing phase of the underwriting process. Your loan profile should include a photo, and Kiva provides some helpful tips for the kind of image that can help your profile stand out to potential lenders:

You’ll also need to provide a personal story to help Kiva and potential lenders get to know you, plus a description of your business and its future goals, the purpose of the loan and links to your business’s website and social media accounts, if you have them.

Once you complete your application, a Kiva employee will contact you within about two weeks to ask you some follow-up questions and learn more about your business. After that, Kiva determines what loan amount you qualify for (if any) and moves you to the next step: the private fundraising period, which is the first stage of Kiva’s unique social-underwriting process.

Private fundraising

The private fundraising period lasts 15 days, during which you gather the financial support of friends and family to “prove your character” to Kiva. You’ll be assigned a target for how many lenders you need to recruit from your personal network, based on the size of your loan and other factors. Minimum loan amounts are just $25.

Kiva offers several fundraising templates you can use to market your business to potential supporters via email and social media, as well as a sample calendar to help you create goals and stay on track.

For example:

Public fundraising

If you meet your private fundraising goal, your loan automatically progresses to the public fundraising period. That means your loan profile is posted publicly to Kiva’s website, where it’s visible to roughly 1.7 million potential lenders who have previously made loans to Kiva borrowers. This phase lasts for 30 days, during which you can (and should) continue to fundraise through your personal network to increase your chances of success.

Once your loan is fully funded – which can happen at any point during the 30-day public fundraising period – the money is sent to your PayPal account within five to seven business days. The repayment period begins one month after your loan is disbursed, with payment amounts tailored to your comfort level. You can choose to make lower monthly payments over a longer period of time, or you might opt for a shorter term to repay your loan quicker. Whichever you decide, remember: Kiva never charges you interest or fees.

In addition, you can make extra payments at any time with no prepayment penalties. (Note that all payments are made via PayPal.) Payments are sent directly to Kiva, which then distributes the funds to the lenders who backed you.

Pros and cons of borrowing with Kiva

As most small-business owners can attest, it’s hard – if not downright impossible – to find a business loan that doesn’t charge interest or fees, and Kiva offers a ton of flexibility with regard to the type of business you own and how you use your loan proceeds. However, that doesn’t mean Kiva is right for all businesses, given the loan limits, lengthy approval process and all-or-nothing funding model. Here are some of the pros and cons of taking out a business loan with Kiva.


  • Kiva doesn’t require a credit score or collateral as part of its underwriting and approval process.
  • Your business doesn’t have to be in a particular industry or operational for a certain length of time in order to apply for a loan.
  • As a nonprofit organization, Kiva charges no interest or fees on most of its direct loans.
  • Loan proceeds can be used for a variety of business purposes, including marketing, inventory, payroll and more.
  • Kiva offers flexible repayment plans between six months and three years, and you get to choose a term that works best for you.
  • There are no prepayment penalties for paying off your loan early.
  • The private fundraising period of Kiva’s underwriting process means you have a better shot of getting your loan fully funded if you have a strong support network.
  • When you reach the public fundraising phase, your loan profile is posted to Kiva’s website, where it’ll be visible to a huge pool of about 1.7 million potential lenders.
  • Successful borrowers can apply for another Kiva loan once their current loan is repaid in full.


  • Businesses that are in the early stages may not qualify for larger loan amounts, which are reserved for more established businesses that have steady revenue and a strong online presence.
  • With a maximum loan of $15,000, you might not be able to borrow enough to meet your business needs.
  • Kiva’s underwriting and approval process means your loan won’t be funded for at least two months after you apply.
  • If you don’t get enough support during the private fundraising period, your loan profile won’t be posted on Kiva’s website and you won’t move on in the underwriting process.
  • If your loan isn’t fully funded by the end of the public financing phase, you won’t receive any of the funds, and you’ll have to wait another six months before you can apply again.
  • Direct loans are available only in the U.S.
  • Loan payments can be made only through PayPal, so you’ll have to create an account if you don’t have one already.

Tips for maximizing Kiva

If you decide to apply for a Kiva business loan, keep the following tips in mind to make your profile attractive to potential funders and increase your chances of getting your loan fully funded.

Create a strong loan profile

Your loan profile is what lenders see when they click on your request on the Kiva website, so it’s hugely important in showcasing your story. Pick the right photo to help your profile stand out and let your passion for your business shine through in your writing. (Go here to see Kiva’s other tips for creating a strong profile.)

Enlist your support network early on

You have just 15 days to meet your private fundraising goal, so it’s helpful to be proactive and contact friends and family early in the process (perhaps even before you submit an application) to gauge what kind of financial support you can expect. Emphasize that it’s a loan, not a donation, so they’ll get their money back as you make payments to Kiva.

Be responsive to potential lenders

Once your loan profile is posted to Kiva’s public website, you may receive messages from interested lenders via the conversations tab in your account. Lenders (and Kiva itself) prioritize applicants who are communicative, so check your conversations regularly and respond to inquiries quickly.

Get endorsed by a Kiva trustee

Though you’re not required to get the endorsement of a trustee, having one vouch for your character and your business strengthens your application and can help you succeed in the review process. (Learn more about the role of a trustee, and email to find out how to pursue a trustee endorsement.)

Have a plan to repay your loan

Though approval isn’t guaranteed, it helps to have a plan for paying back your Kiva loan before it’s even fully funded. If you fall behind on payments or default on your loan, it can impact your business credit, and you won’t be eligible for another loan with Kiva. (If you run into trouble making payments, contact Kiva immediately and let your lenders know.)

See related: How to build business credit

Final thoughts

Small-business owners often find it difficult to obtain traditional financing, especially in the early stages of creating a company. Applying for a business loan with Kiva lets you leverage the organization’s vast lending network, as well as benefit from ongoing support and advice throughout the underwriting process. If you choose to pursue a Kiva loan, be prepared to do a good amount of outreach on your own behalf – the more support you can muster from your personal network, the better.

See related: How to recover from a business credit score drop

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The editorial content on this page is based solely on the objective assessment of our writers and is not driven by advertising dollars. It has not been provided or commissioned by the credit card issuers. However, we may receive compensation when you click on links to products from our partners.

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