The Kansas City, Mo., City Council has just approved a $1.8 million expansion of its microloan program for small businesses.
That includes special funds that’ll be set aside for artist-entrepreneurs and military veterans who want to start businesses, two groups that often have a harder time securing traditional bank loans.
“There’s a real demand for these really small loans,” said Councilman Scott Taylor, who heads the city’s Planning, Zoning and Economic Development Committee. “They really do make a difference.”
The council is taking $180,000 left over from another development project and using it to leverage a 10-to-1 match from the U.S. Small Business Administration.
Of that $1.8 million, $600,000 will be devoted to military veterans. Another $400,000 will be for microloans to artists. The remaining $800,000 will be added to the general microloan program.
Veterans need help with lending because many of them weren’t able to build up much of a credit history while serving in the military. Artists are in a similar spot because their incomes can be sporadic.
Since it was founded a few years ago, the Kansas City microloan program has loaned out $2.7 million in 235 loans. Most microloans are worth about $10,000. About 60 percent are made to women-owned businesses. More than half of the loans go to small companies operating east of Troost Avenue.
Kansas City made a big push into microloans a few years ago, after the city created its own small business committee (one of the few in the nation) and held more than 17 hearings on improving conditions for local entrepreneurs. The No. 1 issue for business owners, Taylor said, was a lack of access to capital.
While the loans aren’t big, their impact can be. Taylor pointed to Mo’s Italian Spot at 59th and Prospect. The owners had put their savings into refurbishing the storefront and preparing to open. But they still ran a little short. A microloan gave them the resources they needed until the restaurant could start generating cash.
“That’s exactly why we set up this program, especially in parts of the city where it was difficult to start a business in the past,” Taylor said.
Are you a Kansas City, Mo., business interested in microloans? Contact KCBizCare, the city’s office for small business services, and the staff there can put you into contact with the right people. Its website can be found here, or you can call (816) 513-BIZCare (2492).
