- What is crowdfunded microlending?
Crowdfunded microlending combines both online crowdfunding and microfinance. Traditional microfinance organizations provide financial help in the form of small loans (often in the $5,000 - $10,000 range) to small businesses and entrepreneurs who lack access to banking and loans. In this case, an online platform allows all of us to contribute to a local businesses by providing small non-interest loan (often in the $50 range) to a small business seeking crowdfunded microloans. Find out more about how our partner Community Sourced Capital provides crowdfunded capital to small businesses.
- Oregon’s Kitchen Table seems focused on public issues and public projects – how is crowdfunded microlending for individuals and their small businesses a form of civic engagement?
It is our goal at Oregon’s Kitchen Table to provide a variety of ways for Oregonians to engage with one another and their communities. In partnership with Oregon Business Council’s Poverty Reduction Task Force, we are working to support Oregonian-to-Oregonian micro-lending. Reducing Oregon’s poverty rate from its current level (16.7 percent) to less than 10 percent is one of the top goals of Oregon Business Council and its allies. Small business in Oregon represent more than 90 percent of all employers and employ over half of the private-sector labor force. By supporting small businesses, we can all pitch in to make our state more prosperous.
- Aren’t there already programs out there that provide loans to small businesses – banks, the US Small Business Administration, and community-based organizations like Mercy Corps NW?
- Yes! Some of these organizations provide much larger loans and some provide smaller loans (the micro-finance model), but many of them don’t provide opportunities for friends and neighbors to contribute to small businesses. At Oregon’s Kitchen Table, we partner with organizations that work directly with small business owner(s) to qualify them for a microloan (and work with them to ensure the loan is paid back) and then provide an online platform to allow any Oregonian to invest in their fellow Oregonians. We hope that microlending can serve as a foundation to help small Oregon businesses gain access to capital as they grow - whether its accessing larger loans from banks or from government agencies like Business Oregon or the SBA.
- Why are you partnering with Community Sourced Capital? What about other microlending partners?
Community Sourced Capital is a certified B-corporation based in the Pacific Northwest (one of their offices is in Portland, Oregon). In talking with many other microlending or microfinancing entities, we were often pointed to Community Sourced Capital as a strong, regional partner with a proven track record that provides an online platform. We’re continuing to seek out partnerships with other organizations who will be a good fit for this approach to crowdfunded microlending. Let us know if you have any ideas!
- How can I start a microlending campaign for my business or a business I know?
Currently, Oregon’s Kitchen Table’s microlending portal acts as a gateway for Oregonians to find small businesses in Oregon to invest in. We feature the current crowd funded micro lending campaigns through Community Sourced Capital. If you’re a small Oregon business or entrepreneur, we recommend you contact Community Sourced Capital directly to find out about whether crowdfunded microlending is right for you. We are happy to help put you in contact with CSC as well!
- Do you have any criteria for what kinds of campaigns you post?
Currently, we highlight Oregon small businesses and entrepreneurs who have gone through a vetting process with Community Sourced Capital. CSC reviews a company's campaign to check for financial integrity and community connection. This includes seeing a demonstrated history of sales, and checking for any significant amounts of debt which could compromise the ability to repay a loan. The ultimate approval for these loans comes from community members like you who decide whether or not to contribute money to a campaign. This is a demonstration of social capital -- whether or not a community trusts a particular small business with their money.
- How do people find out about the microlending opportunities on Oregon’s Kitchen Table?
Currently, Oregon’s Kitchen Table has over 13,000 members from across the state who have taken their seat at the table. And the number continues to grow - join now if you haven't already. We share opportunities for engagement - whether it’s a consultation on an important decision in the state or your community, a civic crowdfunding campaign, or new crowdfunded microlending campaigns - with the folks who have joined Oregon’s Kitchen Table.
- What do I get in exchange for my investment?
These are zero-interest loans. According to Community Sourced Capital, “Interest-bearing investments are expensive and hard to sell. It rarely makes sense for small loans. Squares were designed so that everyone could participate in community finance -- zero-interest lending makes that possible today. Squares are an affordable way for small businesses to access small amounts of capital. These are the sizes of loans that are nearly impossible to get from traditional sources like banks.”
- What are squares and squareholders exactly?
Community Sourced Capital uses these terms for the loans and the folks who provide small pieces of each loan. The term “Squares” are used for $50 pieces of a loan to a business in your community. Buy 4 Squares, lend $200. Squares are in-between donating and investing. Although Squares do not return interest to lenders, they can still be repaid in full. Squareholders are what Community Source Capital calls, “the providers of capital to small businesses they know and love.” So if you buy a Square and lend it to a small business through microlending, you’re a Squareholder.
- How is the money collected and distributed? How do I know I’ll get my money back?
The money for microlending on Oreogn’s Kitchen Table is collected and distributed by Community Sourced Capital. Although these are zero-interest loans, our intention is that they are repaid in full. Every time a business makes a repayment on their loan, that repayment is divided and paid into every participating lender’s online account. Squareholders receive a notice of repayments at the beginning of every month alongside a short update from the business. Squareholders can withdraw the balance of their account at any time or use their balance to buy Squares for another business listed by Community Sourced Capital.