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
AltCap winner launching its first Rightfully Sewn-label little black dress at TEDxKC Women
Winning $10,000 in this week’s AltCap Your Biz Competition will help Rightfully Sewn expand, Jennifer Lapka said — a move coming on the heels of the social endeavor releasing the first dress under its own label to support the Crossroads-based seamstress training program. “It’s a stylish, well-made LBD (little black dress) that women can wear…
On the TechWalk runway: This is what real KC Women in Tech look like
Tech careers are available to everyone, said Ventura Rangel. Kansas City Women in Technology, a nonprofit dedicated to growing the number of women in technology careers, played host to its second annual TechWalk fashion show, showcasing female tech professionals on the runway, said Rangel, event director for KCWiT. The goal is to inspire young girls…
Lawrence-based Ainstein predicts radar tech will push self-driving automotive advances
From Kansas, Ainstein’s radar technology can have a profound impact on industries across the globe, said Zongbo Wang. “We wanted to design radar that can be very affordable and play different roles in the industry,” said Wang, CEO of the radar tech firm. “Over the past three years, we’ve experienced a time of tremendous growth.”…
Hustle in the making: Startups scaling ‘maker’ concept with high-growth models (Photos)
Andy Talbert is in no way crafty, the Snow Pops co-founder said. “At all,” he emphasized, eliciting laughter from the crowd at Startland’s “Hustle in the Making” Innovation Exchange. The event — sponsored by Plexpod and Polsinelli — explored the evolving spectrum of startup businesses that could be considered “makers” in modern entrepreneurial culture. Kansas…