New York City is trying to get more small loans in the hands of women looking to expand their own businesses.
Through its WE Fund: Crowd partnership with Kiva, a crowdfunding web site focused on women entrepreneurs worldwide, the city said it’s helped funnel more than $280,000 in zero-interest loans to 40 women in New York since it launched in November, with the loans being a combination of city funds and thousands of outside contributors.
The mayor’s office said the average WE Fund loan is about $5,500 and that 80 percent of the loans have gone to minority entrepreneurs and 35 percent to immigrant entrepreneurs.
“This is about increasing the earning power of women and making sure that women are leading the next generation of home-grown companies,” Mayor Bill de Blasio said.
Deputy Mayor Alicia Glen said the program started after the mayor’s office “heard women entrepreneurs say loud and clear that they needed more access to capital to get their businesses off the ground.”
The effort looks to be working. Alexis Krase was able to raise $10,000 in little more than two weeks for her Brooklyn store offering plus-sized women’s apparel, Plus Bklyn, after a friend told her about the WE Fund loan program. While the larger portion of the money came from the city, a majority of it was crowdfunded from 124 lenders that contributed less than $100 each. With the money, Krase was able to meet with a local patternmaker last weekend and expects to have an in-house line at Plus Bklyn in a few months.
The friend who initially told her about WE Fund, Rachel Beide, also received $10,000 through the program, with 99 micro-lenders and a larger portion of support from the city going to fund the opening of a third location for her decade-old business Massage Williamsburg. Beide says on her crowdfunding page that her biggest obstacle as a small business “is access to funding at non-predatory lending rates.”
Personal loans from banks have interest rates that range from 6 to about 36 percent, according to stats from NerdWallet, often making it impossible or too risky for a small business owner or someone hoping to start one to access funding.
With the We Fund, New York and Kiva are planning to make a total of 500 loans over three years.
“It doesn’t take much capital for women entrepreneurs to build thriving businesses that support our city’s local economy, communities, and families,” Gregg Bishop, commissioner of the city’s Department of Small Business Services, said: “And it hasn’t taken much time for the city to change the lives of 40 entrepreneurs through WE Fund: Crowd. At this rate, we are well on our way to achieve our goal of reaching 500 businesses over three years and building a more inclusive city.”
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