Editor’s note: The Ewing Marion Kauffman Foundation is a financial supporter of Startland News.
A significant new grant from the Ewing Marion Kauffman Foundation is expected to help AltCap support the capitalization and administration of a fund that increases access to capital for entrepreneurs in distressed areas of Kansas City and for those whose credit applications have been rejected by conventional lenders.
This grant will seed a $5 million revolving loan fund to provide qualifying Kansas City businesses, alternative financing options that help to overcome the obstacles and hurdles many entrepreneurs face when seeking traditional asset-based financing, according to AltCap, a local community development financial institution (CDFI).
An estimated 7.5 percent of small businesses in Kansas City meet the standards for a microloan of $50,000 or less, which accounts for just a fraction of estimated 178,000 small ‘main street’ companies in need of capital access.
“We are excited to support AltCap’s work to help increase the rate of new and successful businesses here in Kansas City,” said Philip Gaskin, vice president of entrepreneurship for the Kauffman Foundation, a private, nonpartisan foundation created by late entrepreneur and philanthropist Ewing Marion Kauffman. “This grant is aligned with Kauffman’s commitment to eliminating a significant barrier to the pursuit of inclusive prosperity through small business growth – the pervasive lack of access to capital.”
AltCap has more than 15 years of lending history to communities and small businesses overlooked and underserved by mainstream finance.
In 2020, the organization was selected as a recipient of Kauffman funding to seed the KC Region Small Business Relief + Recovery Loan Fund. That fund successfully deployed more than $5 million to 178 small businesses throughout 79 zip codes. As of today, that fund has had zero defaults.
“AltCap is an ally to underestimated entrepreneurs and Kauffman’s support allows us the flexibility to design and implement new alternative financing tools,” said Ruben Alonso III, CEO of AltCap. “Kauffman’s investment in AltCap provides a runway for our continued development and growth and will enable us to find additional ways to make capital more accessible to entrepreneurs while also helping us achieve impact at scale.”
The remaining $300,000 of the $5.3 million grant will be used to develop AltCap’s organizational capacity and ensure strong internal controls, efficient underwriting, and appropriate technology infrastructure.
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.