Farmers & Merchants Bank Announces $50,000 Grant To Support Long Beach Small Businesses Overlooked By Traditional Financing Channels
December 27, 2019
LONG BEACH, CA (December 26, 2019) - Farmers & Merchants Bank (F&M Bank), one of the strongest commercial and retail banks in California, announced a $50,000 grant to support underserved entrepreneurs in Long Beach. The $50,000 grant to Local Initiatives Support Corporation of Los Angeles (LISC LA) will support the LISC LA’s Kiva Accelerator Fund, a revolving small business micro-loan fund.
LISC LA is one of 34 local offices of the Local Initiatives Support Corporation, a national non-profit Community Development Financial Institution (CDFI) that forges resilient and inclusive communities of opportunity across America. For over 30 years, LISC LA has worked with local partners and residents to invest nearly $850 million in small businesses, housing, health, education, public safety, and employment.
To expand opportunity for underserved entrepreneurs who do not yet meet LISC’s lending requirements or those of a bank, LISC established a partnership with Kiva, the online crowdfunding platform that allows borrowers to access 0% interest small business loans up to $10,000. The program is intended to reach low-income entrepreneurs and small business owners who do not have access to traditional capital. Kiva’s model is unique because it uses social underwriting--a borrower’s character, relationships, and reputation--instead of their credit scores or assets to access business capital. Since launching in summer 2017, LISC LA has capitalized a $250,000 Kiva Accelerator Fund. This revolving Kiva Accelerator fund provides a match for eligible campaigns that allows business owners to reach their loan goal faster.
Through the Kiva City Long Beach initiative, a public-private partnership between the City of Long Beach Economic Development Department, LISC LA, and trusted community-based organizations that have signed up to serve as local Trustees, all borrowers in the City of Long Beach who are endorsed by a Trustee are eligible for a dollar for dollar loan match provided by LISC LA. A Kiva Trustee endorses a borrower, increasing the micro-enterprise's credibility on the Kiva crowd network, leading to higher funding probability. They often also act as a local Kiva ambassador and provide the borrower with technical assistance and support throughout the loan process. To date, this program has supported 30 small businesses in Long Beach access $220,500 in capital.
All borrowers must invite a minimum number of lenders from their own networks before going public on Kiva’s website. Generally, the 0% interest, no fee loan terms are up to 2 years for $5,000 loans and up to 3 years for $10,000 loans. Loans are disbursed and repaid through PayPal with monthly repayments to crowdsourcing lenders like LISC throughout the loan period. Kiva Loans can be used for purchasing equipment or inventory, expanding product lines, hiring additional staff, marketing, advertising, improving or creating websites, or paying for legal fees.
Officers at F&M Bank became aware of the opportunity to support the program by being part of the Long Beach “EveryoneIn” initiative, which has been a nearly two year work-in-progress.
Kiva Long Beach provides much-needed access to capital for small and diverse businesses in many of the low-to-moderate income neighborhoods in the communities we serve, said Phil Bond, F&M Bank Executive Vice President, Chief Credit Officer. Bond continued,
We look forward to working with this partnership to ensure that small businesses have the opportunity to thrive.
Thank you to our friends at LISC LA for making this wonderful program available to the Long Beach community, said Cheryl Ryman, F&M Bank Vice President, Community Reinvestment Act Officer.
F&M Bank is grateful for the opportunity to assist local business owners in reaching their loan goals, just as we have been since 1907.
For more information on F&M Bank business banking, please visit www.fmb.com/business.
About Farmers & Merchants Bank
Founded in Long Beach in 1907 by C.J. Walker, Farmers & Merchants Bank provides white-glove service to clients at 25 branches across Orange County, Long Beach, the South Bay and Santa Barbara, as well as through robust Online and Mobile Banking platforms. The Bank offers commercial and small business banking, business loan programs, home loans, and a robust offering consumer retail banking products, including checking, savings and youth accounts. Farmers & Merchants Bank is a California state-chartered bank with deposits insured by the Federal Deposit Insurance Corporation (Member FDIC) and an Equal Housing Lender. For more information about F&M, please visit the website, www.fmb.com.