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Local businesses pursue online loan program

POLK COUNTY -- Small business owners presented with a zero percent interest loan might be inclined to go running for the hills -- or the police.

July 09, 2013

POLK COUNTY -- Small business owners presented with a zero percent interest loan might be inclined to go running for the hills -- or the police.

But one group is providing small businesses with the opportunity to get such loans straight from their clients.

Kiva Zip is a new microlending, crowdfunding website that provides businesses the chance to fund projects and expand their business without having to suffer through high interest rates.

Two Polk County businesses -- Ladies of Liberty in Independence and Melting Pot Candy in Dallas -- are taking part in the growing trend of crowdsourced funding.

The website allows businesses to receive loans directly from the public -- $5, $10 or $50 at a time.

Diane Bishop, owner of Ladies of Liberty, found out about the program after taking a class with MERIT (MicroEnterprise Resources, Initiatives and Training) earlier this year.

"Forrest Peck and Marie Trucco came to me and said here's this great opportunity for a loan, are you interested?" Bishop said. "I said, `what's the catch?'"

Businesses go through a stringent process of getting the loans. Each business must be sponsored by an approved trustee that verifies the business can and will repay the loan.

Forrest Peck

Forrest Peck

MERIT acted as the trustee for Ladies of Liberty and Melting Pot.

Once they are listed on the website, businesses have 90 days to collect the entirety of the loan. If the entire amount of the loan is not acquired, it goes back to the lenders.

Businesses have two years to repay the loan to the lenders once they've reached their goal.

The website was formerly open only to businesses in Third World countries but launched a new division this spring for businesses in the U.S.

"We identified about 150 businesses that we knew needed capital that we thought would be a good fit," Peck, MERIT program director, said. "This works for people who may not qualify for traditional lending and access to capital. Since it's businesses we're working with, that endorsement comes from the relationship."

For more information or to lend, visit zip.kiva.org.

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