SAN FRANCISCO -- Small businesses owned by minorities, women and veterans, those too-often excluded from mainstream business financing options, now have a lending alternative in San Francisco, according to the mayor's office.
San Francisco Mayor Ed Lee today announced that the city partnered with a nonprofit to provide microloans with no interest to 1,000 small business owners over the next five years. The nonprofit, Kiva, reported this could lead to the creation of 750 local jobs.
The announcement was made at Dragon Papa, a pastry shop in Chinatown that became the first business to sign up for Kiva San Francisco. It hopes to raise $10,000 to hire people to work in the shop and to purchase a delivery vehicle, according to the mayor's office.
The city's new funding program is principally supported by Capital One bank, which is matching every dollar lent to small businesses, up to $75,000.
According to a Capital One survey, minority-owned businesses in San Francisco are more than twice as likely to face challenges related to securing a line of credit.
Such individuals are offered no-interest loans up to $10,000 by Kiva, an organization based in San Francisco. These loans rely on crowdfunding from investors around the world.
Kiva links up with cities where there is a need to expand economic opportunity, such as Detroit, the first city it partnered with. In a number of ways, Kiva San Francisco will be the nonprofit's biggest endeavor in any city yet, according to the mayor's office.
The partnership with San Francisco advances the goals of the mayor's Invest in Neighborhoods initiative, mayor's office representatives said. That initiative is directed through Office of Economic and Workforce Development, which will also assist the local Kiva program.
Through Invest in Neighborhoods, the city has administered 459 small business loans totaling more than $12.3 million, apparently creating 1,061 jobs.
City leaders are hoping to improve on that.
"Small businesses are the backbone of San Francisco's economy and when we invest in their success, we are investing in vibrant merchant corridors, job creation and a stronger economy," Lee said in a statement.
"Kiva is making a smart investment in (our city)," he added.
New partnership hoped to help entrepreneurs, create jobs