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
HechoKC cast in hand-made image of Chicano artist’s culture, family, community
Witnessing — and participating in — Kansas City’s renaissance has been amazing, said Luis Garcia, the longtime artist behind HechoKC. The Crossroads used to be a ghost town, said Garcia, who has been part of the KC scene since his years at the Kansas City Art Institute. He developed SPYN Studio, a branding and design…
Quartet of startups hop into the Digital Sandbox KC
Four early-stage businesses recently entered the Digital Sandbox KC program. The new startups demonstrate the ingenuity Digital Sandbox aims to attract for its grant-funding efforts, said Jeff Shackelford, director of Digital Sandbox KC. “From helping students prepare for college to analyzing voting records to predict legislative outcomes, the startups in the Sandbox are a great…
Newest Techstars KC class tackling payday loans, food safety, bots for business
Techstars Kansas City has revealed its 2018 cohort of startups. The 10 companies will make a big impact not only on Kansas City but the global economy, said Lesa Mitchell, managing director of Techstars KC. “Although our companies come from many industries, they share in common that they are all solving problems to make the…
YEP KC teen serves hope through enterprising volleyball benefit for men’s shelter
When 17-year-old Catherine Franano learned the mattresses at Kansas City Rescue Mission were old and too worn for comfortable use, the Pembroke High School senior leapt into action, she said. “Some of these people … like they’ve just had so many awful things happen to them, but not having anywhere to sleep?” Catherine said. “How…