Direct Capitalization Loan Fund grant will allow DreamSpring to make $140 million in capital available to Kansas City’s small business owners
Kansas City, MO, and Albuquerque, NM (March 2, 2023) — The Ewing Marion Kauffman Foundation has awarded a $5.3 million grant to DreamSpring, a nationally recognized nonprofit Community Development Financial Institution (CDFI), to vastly expand access to small business credit among historically underserved entrepreneurs in Kansas City.
DreamSpring will 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.
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.
“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 Philip Gaskin, vice president of Entrepreneurship, 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.”
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.
“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. 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,” said Edmond Johnson, Chair Emeritus of the Board of Directors of the Kansas City Federal Reserve Bank and Chair of the DreamSpring Board of Directors. “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%, 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, DreamSpring President/CEO. “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.”
For more information about DreamSpring, to apply for a loan, or to learn more about the financial products available to entrepreneurs, contact DreamSpring at DreamSpring.org or 1-800-508-7624.
DreamSpring is a nonprofit community lender dedicated to eliminating systemic wealth inequities and accelerating the economic inclusion and strength of underserved communities. Founded in 1994, the organization provides rapid access to capital and customized wrap-around support to the most vulnerable small business owners in 27 states, focusing on communities including people of color, women, low- to moderate-income earners, people with disabilities, and start-ups. To date, DreamSpring has issued more than 46,350 loans totaling over $538 million to small businesses that support an estimated 80,200 jobs. Learn more at DreamSpring.org.
About the Ewing Marion Kauffman Foundation
The Ewing Marion Kauffman Foundation is a private, nonpartisan foundation that provides access to opportunities that help people achieve financial stability, upward mobility, and economic prosperity – regardless of race, gender, or geography. The Kansas City, Mo.-based foundation uses its grantmaking, research, programs, and initiatives to support the start and growth of new businesses, a more prepared workforce, and stronger communities. For more information, visit www.kauffman.org and connect with us at www.twitter.com/kauffmanfdn and www.facebook.com/kauffmanfdn.