Kauffman awards $5.3M to DreamSpring to expand microlending to underserved entrepreneurs in KC
March 3, 2023 | Startland News Staff
A newly announced $5.3 million grant is expected to vastly expand access to small business credit among historically underserved entrepreneurs in Kansas City, said Philip Gaskin, detailing the latest in a series of funding awards this week from the Ewing Marion Kauffman Foundation.
DreamSpring, a nationally recognized nonprofit Community Development Financial Institution (CDFI), is set to receive $5 million in capital that, over the next five years, will be continuously recycled as loans to small businesses within the Kansas City metropolitan area’s low-income and distressed census tracts.
Click here to read more about DreamSpring’s work in Kansas City, which began with its online platform in 2009. The CDFI is now now hiring community lending officers in Kansas City to reach more entrepreneurs.
“Through DreamSpring’s lending to historically marginalized entrepreneurs, Kansas City is better able to meet the anticipated needs of small businesses and aspiring entrepreneurs,” said Gaskin, vice president of entrepreneurship for the Kauffman Foundation. “This additional funding will support more than 8,000 small businesses in our community through alternative funding solutions. We’re excited to be able to utilize the expertise of a national microlender right here in Kansas City.”
The capitalization award is coupled with $300,000 in additional funding to support activities associated with deploying the funds. This includes the creation of DreamSpring lending and community engagement roles in Kansas City to provide entrepreneurs and partner organizations with personalized, on-the-ground service and support.
Editor’s note: The Ewing Marion Kauffman Foundation is a financial supporter of Startland News.
DreamSpring is one of the top five microlenders in the U.S. by total loan amount disbursed, according to the Aspen Institute FIELD program’s 2017 U.S. Microenterprise Census, with an average $13,500 individual loan size in a typical year.
The grant funding is part of the Kauffman Foundation’s Direct Capitalization Loan Fund, which seeks to expand the loan pools available to small businesses and facilitate better access to capital in disinvested communities. Today, existing capital pools support only a fraction of the capital needs of small businesses in Kansas City — especially those led by historically marginalized entrepreneurs, according to the Kauffman Foundation.
Edmond Johnson, DreamSpring
“As the owner of one of the only Black-led manufacturing businesses in the country, I know firsthand the challenges BIPOC micro- and small business entrepreneurs face in getting access to capital,” said Edmond Johnson, president of Denver-based Premier Manufacturing, chair emeritus of the board of directors of the Kansas City Federal Reserve Bank, and chair of the DreamSpring board of directors.
“During my time as the chairman of the Kansas City Federal Reserve Board, economic disparities became a focus of the Federal Reserve to attempt to mitigate,” he continued. “I am overjoyed that DreamSpring, a transformative microlender, and the Ewing Marion Kauffman Foundation, an entrepreneurship impact leader, have engaged in this meaningful partnership to create a deep impact for underserved small business owners in our community.”
Kauffman estimates that Kansas City business owners in 2021 had only 7 percent, or less than $10 million, of a needed loan capacity of $134 million from loans totaling $50,000 or less. With the new Kauffman Foundation funds, DreamSpring estimates that it will extend $140 million in microloan capital to 8,103 small business owners, reducing financial barriers and amplifying economic opportunity in Kansas City and the Heartland.
“Expanded access to capital creates a more equitable economy,” said Anne Haines, president and CEO of DreamSpring. “Our partnership with the Ewing Marion Kauffman Foundation will reduce the capacity gap and bring in leveraged capital to create jobs and have transformative impacts on entrepreneurs, their families, and entire communities within metropolitan Kansas City.”
Featured Business
2023 Startups to Watch
stats here
Related Posts on Startland News
Silicon Valley vet Jason Anderson makes a game out of data collection
As a 4-year-old, Jason Anderson was captivated by the Atari classic Pong. He gawked at the game for hours after his dad brought one home in 1978. Four years later, he was so inspired by Pong that he decided to create his own game — a text adventure on the family’s Timex Sinclair 1000. Anderson…
Compute Midwest named top national tech conference
Consistently attracting futurists and tech leaders from around the U.S., Compute Midwest recently was named a national tech conference that shouldn’t be overlooked. Inc. Magazine included the annual, Kansas City-based conference on its “Top Tech Conferences You Can’t Miss This Fall” list, noting the event’s traditionally strong lineup of speakers. Presented by the Disruption institute,…
Dozens of skyrocketing KC firms break into the Inc. 5000
Kansas City held its own on Inc. Magazine’s annual ranking of the nation’s fastest-growing, private companies. The Wednesday unveiling of the Inc. 5000 featured 44 metro firms — including several area tech firms, like k12itc and Rhythm Engineering. K12itc, which in January made Startland’s 2016 top 10 startups to watch, delivers cloud-based IT services to…
Backstitch wants to fix a billion-dollar communication dilemma
With the cost of poor business communication climbing as high as $37 billion a year, Backstitch founders Jordan and Stefanie Warzecha saw an opportunity to clear the air. The married couple — who say communication has never been a problem for them — founded their corporate communications platform in 2012. Backstitch aims to mitigate the…