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
Now renting nostalgia: Hands-on classic car startup drives ‘look but don’t touch’ into the past
Ryan Wager isn’t just renting out classic cars with his new startup, he shared, he’s loaning out memories. North Kansas City-based RND — launched earlier this year — allows community members and visitors to take classic, RND-restored cars — like his own 1958 Chevy Corvette — for a spin with daily rentals. Want to take…
KC record label disrupts music industry with incubator studio concept that gives artists more freedom, ownership
Casio McCombs’ most creative ideas come to him during “dream hours” — late at night and early in the morning when a majority of people are asleep, he shared. “That’s when all these new ideas for music and how to structure the label would really hit us,” said McCombs, who co-founded the Kansas City-based record…
Their joyful art began with pom poms, but Bubble Gum Kurt’s upcycled expression won’t be boxed in
Infusing their work with plenty of color and a DIY approach, Kansas City artist Kurt Ryan weaves their identity into each craft, article of clothing, and piece of jewelry they sell. Ryan’s creates their work as Bubble Gum Kurt, and through their business venture FunStarShine, both of which evoke the colorful wares Ryan creates. “I…
Startup’s swift action against siloed systems: Finding that ‘single version of truth’ hidden in the data
This story is possible thanks to Entrepreneurial Growth Ventures (EGV), a business unit of NetWork Kansas supporting innovative, high-growth entrepreneurs in the State of Kansas. Celerity Enterprises is aiming no lower than industry modernization with its plug-and-play SaaS financial platform — designed to bring clarity to a world of industrial wholesale distribution that often is rooted…