Yesenia Monroy, left, and husband Edwin De Rosal, co-owners of Cafe 22 in… (Al Seib, Los Angeles Times )
Kiva is an international microlender known for providing loans in Third World countries to businesses that might be in a need of a cow or a new oven.
But now Kiva is moving into a new territory -- Los Angeles.
The nonprofit lender, which uses its website to get ordinary citizens to help support its loans, has started by funding 13 loans in the L.A. area.
For The Record
Los Angeles Times Friday, June 29, 2012 Home Edition Main News Part A Page 4 News Desk 1 inches; 39 words Type of Material: Correction
Microlender: An article and photo caption in the June 27 Business section about microlender Kiva beginning to make loans in the Los Angeles area misspelled the last names of Edwin Del Rosal and Ivan Del Rosal as De Rosal.
"I went to three different banks," said Yesenia Monroy, co-owner of the small Cafe 22 health-food restaurant near L.A. County/USC Medical Center. She got a $5,000 Kiva loan to pay business license fees and hire a delivery person.
The cafe was the site for a news conference to announce Kiva's Los Angeles venture. The organization's founder, Premal Shah -- formerly an executive at PayPal -- said Kiva's aim was not just to shore up local small businesses but also to contribute to the overall economic health of neighborhoods.
"We know that small businesses in the U.S. are the backbone of the economy," Shah said. "Two out of three jobs are created by small businesses every year."
The recipients of the L.A. loans were chosen by the Valley Economic Development Center in Van Nuys. Kiva funded the loans upfront, and as of Tuesday began "back filling" the funding by collecting donations for the projects on its site.
The donors get their money returned when the loans are fully paid back.
Other initial loans in the local Kiva program include:
* Kate Paul got $10,000 to pay rent and expand her Foodink catering business.
* HD-LV Apparel Resources, which paints designs on jeans, jackets and other clothing items, got $6,000 to expand beyond its two kiosks.
* Artist Lix Mario received $5,000 for materials to create six bronze sculptures.
* Vicenta Lozano got $10,000 for equipment for her Paleteria Bety business, which has 30 pushcarts selling ice cream and Mexican-style popsicles.
* Thomas Foulkrod received $5,000 to promote his private investigation business.
Kiva, which started in 2005 and is headquartered in San Francisco, makes the vast majority of its loans outside the U.S. Its domestic Kiva City program began last year when it started funding businesses in Detroit, followed by New Orleans.
The domestic program was sparked in 2008 by a visit to the Kiva office by Maria Shriver, then California's first lady.
"She asked, 'What about helping women right here in California?' " Shah said.
Detroit and New Orleans have had acute economic troubles over the last few years. But Shah believed that Los Angeles neighborhoods could also use the group's services.
"It's arguable whether Detroit or New Orleans is worse off than some places in Los Angeles," he said.
The businesses that get the loans will be charged 8.5% to 10% interest. Payback schedules vary. For example, HD-LV Apparel has agreed to pay back its $6,000 loan over 38 months.
The donors who helped back the loans don't get any of the interest money, which goes to the Valley Economic Development Center to help fund the program. Kiva also does not get any of the interest. Its operation is funded by corporate and individual gifts.
If the recipient of a loan defaults, the individual donors don't get any unpaid money back. But in many cases they commit only small sums to the crowd funding. In fact, Kiva recommends that individuals put in only $25 per project.
The Cafe 22 loan came at a crucial time for the restaurant, which specializes in fresh juices, soyrizo breakfast burritos and brown rice bowls with steamed vegetables and lean meat.
"They're a little plain," co-owner Edwin De Rosal said, "but that's the healthy part of it."
He and Monroy, who are married, took over the restaurant in September.
"We signed a lease without any money," he said. "So we took a risk."
With the help of an initial loan from the Valley group, they survived the first several months. And the cafe's fare proved popular enough that they got requests for delivery. But that would take bringing in a new employee.
"That means adding more to the payroll without income to back that up," De Rosal said.
With the Kiva loan, which was disbursed two weeks ago, the couple believed that they could take the risk. Next week they plan to begin advertising delivery service on their website, and the new employee is already in training.
The Kiva money is "a key to expand," De Rosal said, "to get our business out of this little bucket that we are in."