Kiva City Pittsburgh Welcomes First Borrower-turned-Trustee
Borrower turned trustee: Tara Rockacy (left), First Endorsed borrower: Lyla Nelson (right)
Local farmer Tara Rockacy of Churchview Farm is passing the buck on to other small businesses, in the best way possible.
Last week, Rockacy endorsed Lyla Nelson, a local glass-blowing artist , for a $5,000 interest-free loan to purchase equipment necessary to running her studio in Pittsburgh's West End.
Both Rockacy and Nelson had been turned down for a conventional bank loan in the past, and knew the difficulties of finding the funding to expand their businesses.
“I have a lot of friends who are starting their own businesses and projects, and what we all needed was a burst of funding for a specific project,” Rockacy said.
Rockacy is using Kiva Zip, a non-profit that facilitates crowd funded microloans at 0% interest, to help funnel much-needed capital to small businesses. There are 35 entrepreneurs in the Pittsburgh area who have already received a Kiva Zip loan, and one currently fundraising, using the help of 18 ‘trustees’ like Rockacy to access these loans.
Pittsburgh borrower currently fundraising: Micah from Shoutside Media
A trustee is an organization or an individual that acts as a character reference for a loan-seeking entrepreneur. On Kiva Zip’s unique lending platform, borrowers are deemed credit-worthy by their good character rather than their credit score. While trustees bear no financial or legal responsibility for the loan, they play a key role in ensuring that the business owner succeeds and pays back their loan by staking their reputation on the borrower’s behalf on the public website.
“It seems like it should be a paperwork heavy, intensive process, and once we started it was so easy,” said Rockacy. “Basically, it only took a few hours. The site is very user-friendly.”
In a perfect example of how Kiva Zip accesses and expands on existing community networks, Rockacy became a trustee after going through the process as a borrower herself. She is the first individual to do this in Pittsburgh. Rockacy received a Kiva Zip loan for Churchview Farms, which sits on the border of the City of Pittsburgh and the borough of Baldwin.
“I was turned down for a bank loan, since my business was only about four years old and just starting to show a profit,” Rockacy said. “I used the [Kiva Zip] loan to partially fund the barn we were building, which we use to host our farm to table dinner series, featuring different chefs and using products from the farm. It has gone a long way in making the business sustainable.”
Rockacy recently assisted Nelson in receiving her loan, but Rockacy was originally endorsed by her own trustee, Catapult PGH, who has helped 7 local businesses receive $40,000 in interest-free capital since June 2012. Catapult PGH, a coworking space in Pittsburgh’s Lawrenceville neighborhood, is one of the top 20 Kiva Zip trustees in the United States.
“I think it’s awesome that I can help out in some way,” said Elliott Williams, Founder of Catapult PGH. “These businesses need a boost to get an idea off the ground. It feels great to be a part of that.”
Once Rockacy had established a solid track record of on-time payments, she was able to help other entrepreneurs by becoming a trustee herself. Rockacy endorsed Nelson, her former co-worker and friend, who was having a hard time taking the next step in launching her glass-blowing studio.
Nelson said that saving and purchasing her glass-blowing equipment piece by piece had made her feel burned out and frustrated. After being denied a bank loan to purchase a vital piece of equipment, she was feeling discouraged, until Rockacy told her about Kiva Zip and endorsed her for a loan. Nelson’s loan funded in less than a week.
“Six days and Kiva made this all possible, after thinking that it would take another year,” Nelson said. “I’m feeling very supported by people I know, and I was so moved by the support of people who don’t even know me.”
Rockacy felt the same way about her own borrower experience: “Not only do the funds give my business a shot in the arm, it’s so encouraging to know that people are reading your profile, have never met you, but are willing to lend.”
“I’m feeling inspired again,” Nelson said.