Editor’s note: The following is part of Startland News’ ongoing coverage of the impact of Coronavirus (COVID-19) on Kansas City’s entrepreneur community, as well as how innovation is helping to drive a new normal in the ecosystem. Click here to follow related stories as they develop.
Just weeks after applications opened, a relief fund intended for Kansas City’s hardest-hit small businesses already has deployed more than $1 million in microloans to entrepreneurs — many of whom slipped through the cracks of other aid programs.
“Forty-two loans with an average amount of $25,000 have been made to ‘nonessential’ small businesses — with less than $2.5 million in revenue and with 20 or fewer employees — that are operationally strong but have been unable to access capital through traditional channels like banks and federal disaster relief efforts,” according to AltCap, which is tasked with administering the KC COVID-19 Small Business Relief Loan Fund.
Click here to read more about the $5 million relief effort’s launch and rollout.
“This fund represents the best of our community — the Kansas City spirit, real partnerships, working hard for something bigger than yourself, and love and appreciation for our small businesses,” said Ruben Alonso, president of AltCap.
To determine the first round of recipients for the fund, AltCap prioritized sectors like retail, food service, personal services, arts, and hospitality, that were deemed nonessential during the early days of the COVID-19 shutdown, but “are vital to the overall health of our communities and economy.”
In contrast, only 9 percent of federal Paycheck Protection Program (PPP) loans in the first round were made to businesses in the Accommodation and Food Services sector, AltCap said, emphasizing the need for alternative support efforts.
“AltCap has provided a sense of relief and ease in this time of need, especially for small businesses,” said Carlos Rivera Jr., owner of Leavenworth-based Str8 Edge Barber Shop and a microloan recipient. “Str8 Edge Barber Shop went from a productive business to zero revenue in a moment’s notice. AltCap presented an avenue for my barbershop to not only break-even but created an opportunity to rebound from COVID-19.”
Of the $1 million already deployed through the KC COVID-19 Small Business Relief Loan Fund:
- $333,602 has gone to minority-owned businesses
- $487,400 has gone to women-owned businesses
- $255,302 has gone to businesses located in economically distressed census tracts
AltCap plans to approve another $1.5 million for small businesses within the next two weeks while it continues to raise loan capital, the organization said Wednesday.
Keep reading below the video.
Fundraising efforts were bolstered significantly by recent contributions from new funding partners including the Marion and Henry Bloch Family Foundation, Wells Fargo, Academy Bank, First National Bank, Heartley Foundation, and KCRise Fund. The new commitments amount to $1 million toward the fund’s $5 million goal.
“AltCap has quietly and competently been serving Kansas City through economic cycles of all types,” said Darcy Howe, founder and managing director of the KCRise Fund, noting AltCap’s 12 years of experience deploying high-impact, community-focused capital in the Kansas City region.
“Now is the time to help grow their lending capacity so that they can assist the avalanche of Main Street businesses who suddenly need our help to survive,” Howe continued. “We are one of the most generous and neighborly communities in America. By helping small businesses in KC live to see another day, our region can come out of this faster than any other city in the U.S.”
Click here to donate to the relief fund.
AltCap is also seeking low-rate, long-term loans and other equity investments to help further capitalize the $5 million fund.
This story is possible thanks to support from the Ewing Marion Kauffman Foundation, a private, nonpartisan foundation that works together with communities in education and entrepreneurship to create uncommon solutions and empower people to shape their futures and be successful.