Causa Local, the local representative of the Kiva crowd-lending platforming, unveiled a new financial product offering loans of up to $15,000 at 0% interest for small and medium businesses and enterprising artists.
The amount represents a $5,000 increase in funding available to applicants, in comparison to the $10,000 cap the program offered when it was launched locally last year.
The boost comes at a time when local businesses are feeling the crunch of a full shutdown mandated this week by Gov. Wanda Vázquez, to try to contain the spread of the COVID-19 virus on the island. Most businesses are shuttered until at least Mar. 30.
“We don’t want this emergency to put an end to someone’s entrepreneurial or business idea,” said Ana Maria Cintrón, founder of the nonprofit Causa Local.
The terms of the new product call starting to repay for the loan six months after receiving the money and always at a 0% interest. The repayment life of the loan is 36 months, which starts counting after the six-month grace period, Cintrón said.
“If you already have a loan with us, you have to request a new loan or pay off the one you have and reapply,” she said.
“Don’t let panic shut down your business,” she said, adding that more information is available via email.
The online application process may take about a month between the one- to two-week review process and paperwork by a Kiva team in San Francisco, she said.
Very basic financial information is requested, and a profile is completed where the entrepreneur tells the public who they are, and where they come from, among other information.
A photograph of the entrepreneur is included in the application, along with a description of the business, how it started or if it’s about to start, and how the applicant will use the loan money.
“It can be used to launch an idea, as operating capital, for payroll…to keep the business going,” Cintrón said.
The nonprofit Kiva program supports entrepreneurs who would not qualify for conventional loans. To assess the candidate’s repayment ability, the organization reviews the person’s character and reputation in their community.
Criteria such as credit score or collateral are not taken into account, she explained.
The repayment is done via PayPal, which is offering the transfer service free of charge, she said.