Overview

Why are you interested in becoming a Trustee?

Becoming a Kiva Trustee would augment the important work LURN is doing in low-income communities of color in Los Angeles, providing unprecedented low-interest loans and coaching to entrepreneurs who need it most. Overall, LURN recognizes that small businesses are a fundamental part of the economic eco-system of a neighborhood. A critical need of low-income small businesses is access to capital, effective business coaching, technical assistance and marketing tools that can help them grow their businesses, build wealth and take care of their families. One of LURN’s micro-finance programs is the Semi’a Fund, a low-interest micro-loan program that provides capital and individualized business coaching services to low-income entrepreneurs who sell healthy food in their communities. The fund was inspired by the organization’s advocacy work alongside street vendors, in formalizing a city-wide permit system for them to legally operate their micro-businesses in the City of LA. These small local businesses, such as street vendors and home-based businesses, often revitalize and activate otherwise unsafe and unused city sidewalks and bring healthy food options to food desert communities. The Semi’a Fund offer loans ranging from $5,000 to $20,000 to borrowers who are committed to selling healthy food in target neighborhoods. Incentivizing borrowers, loans have an interest rate of 8% but begin dropping over time down to 5% when borrowers consistently submit their loan payments on time. LURN also provides weekly business coaching and technical assistance, while helping to facilitate more access to healthy food in the communities that need them. To date, the Semi’a Fund has provided over $120,000 to healthy food micro-entrepreneurs, like street vendors and home based businesses, who are often turned away from traditional lenders and are otherwise susceptible to predatory lending operations. In addition to providing capital to those “at the bottom of the pyramid” the program includes weekly check-ins, technical assistance, marketing and branding assistance, business coaching strategy sessions and more. Capital made accessible, paired with the individualized business coaching has ensured a 100% repayment rate thus far and we continue to have a growing list of prospective clients as the fund expands. Becoming a Kiva Trustee would provide an opportunity for anyone to support our efforts in revitalizing communities that are full of potential but are often overlooked, avoided and seen as “too risky.” LURN also recognizes that the public health crisis in low-income communities is perpetuated in the food system and a service gap in financial support to low-income entrepreneurs. In communities like South LA and Boyle Heights, where access to nutritious food is lacking and chronic disease is prevalent, 30% of children are obese compared to less than 12% in more affluent areas. Operating at the intersection of health and economics, we believe that working with low-income entrepreneurs to offer healthier food options to underserved populations is moving the needle toward reducing chronic illnesses and advancing prevention efforts while supporting good, local jobs.

What is the mission of your organization?

Leadership for Urban Renewal Network (LURN) is a nonprofit, community development organization based in the neighborhood of Boyle Heights in Los Angeles. Founded in 2008, LURN’s mission is to bring people together to design, build, and promote sustainable communities that allow people to live their greatest potential. LURN works towards this mission in 3 ways: advocating for thoughtful urban policy, designing and implementing economic development projects that support small businesses, and providing research and program design services to organizations on projects that align with our mission.

Borrower Due Diligence

How will you decide who to endorse as a borrower? What due diligence will you conduct?

Loan applicants must be existing legal businesses with a proper local business license, proper insurance and required permits per state and federal requirements. If an entrepreneur does not have the formal business license, they must commit to formalizing one if a loan is issued. The applicant’s debt service ratio, experience, and credit history are reviewed, as well as the applicant’s community work and involvement. While analyzing the applicant’s cash flow and debt service, LURN also takes into account the applicant’s work experience, business and personal expenses and often conducts site visits to their place of business. Additionally, if the business has less than a year of operation they must be prepared to have a business plan. LURN also is advised by a Loan Review Committee (LRC) made up of staff and board members with significant financial and business experience. LRC meetings will be scheduled by LURN staff once a loan has been underwritten and is ready for review and approval. LRC members are responsible for reviewing each loan information or add conditions to the loan requests prior to final loan approval. Ultimately, the LRC is responsible for approving or rejecting all initial loan application following LURN staff review and approval. If the LRC approves the underwriting request, loan documents may be prepared for closing. Approval is achieved through simple majority vote within the loan committee. Future LRC recruits can include volunteers from local financial institutions or other interested parties who demonstrate the professional capacity to review and evaluate commercial loans. If the LRC makes significant changes in the approval of a loan, it must be resubmitted to LURN staff for a second review and final approval prior to funding.