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Kiva Zip, Accion or Opportunity Fund: Which Microlender Is Right for Your Small Business?

Jan. 26, 2015
Small Business
Kiva Zip, Accion or Opportunity Fund: Which Microlender Is Right for Your Small Business?
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Is your small business unable to qualify for a traditional bank loan? If so, a microfinance company — also known as a microlender — could be the solution to your problem.

These nonprofit organizations put the “small” in “small business loan.” They typically provide loans of less than $30,000 to companies that can’t obtain traditional sources of funding, whether it’s due to poor credit, lack of collateral or a limited business history.

Three popular microlenders are Kiva Zip, Accion and Opportunity Fund. Small-business owners should carefully consider each lender’s differences before applying.

Kiva Zip

Kiva Zip is a crowdsourced microlender that provides loans to socially impactful entrepreneurs in the U.S. and Kenya. It has raised $5.2 million in microloans in the U.S. with a repayment rate of 88.1%, according to the company.

Loan terms

Loan terms range from 24 to 60 months, and first-time borrowers can raise up to $5,000. The maximum loan amount for all borrowers is $20,000, according to Kiva Zip’s website.

Since Kiva Zip lenders don’t earn any money on the loans, borrowers benefit from 0% interest. Borrowing qualifications are also less strict, as Kiva Zip doesn’t require a credit score or collateral to back the loan. Instead, the lender looks at your character, reputation, relationships and network to determine your ability to borrow, in what they call a system of “social underwriting.”


There are still a few qualifications borrowers need to meet. For one, they can’t be in foreclosure, bankruptcy or under any liens, and their businesses can’t be engaged in multi-level marketing, direct sales, financial investing or illegal activities like gambling. You must be over the age of 18 and present a viable business plan, and the loan must prove to have a positive social impact.

To get a loan, U.S. borrowers need to be endorsed by a Trustee and recruit lenders from their own social network to fund their loan before they can take advantage of Kiva Zip’s crowd of lenders. Trustees can be any individual or organization that can vouch for you on a personal or professional level, but cannot be family members or employees. Inviting lenders from your own social network should increase the chances of loan repayment, as the lenders keep you accountable, according to Kiva Zip.


Since Kiva Zip offers interest-free loans, it gets a ton of borrower applications; so going from the application process to actual funding could take several months. And if your loan is not fully funded within 45 days of public fundraising, it expires, you get none of the money and you must wait six months before restarting the application process.


Founded in 1961, Accion is a nonprofit microfinance organization that’s dedicated to maximizing both financial and social impact in the world. The company says it had 6.6 million active borrowers in 2013 who impacted the lives of 33 million.

Loan terms

Accion offers a variety of loans, depending on your business. For example, loans range from $500 to $10,000 for daycare; from $2,500 to $25,000 for food and beverage businesses; and up to $10,000 for startups.

Small business loans range in size from $2,500 to $50,000, with fixed-interest rates starting at 10.99%. Loan terms range from six months to five years, and include no prepayment penalty, so you can repay the loan early to save on interest costs.


To qualify, borrowers must meet the following criteria:

  •  Have a credit score of 525 or higher.
  • Demonstrate sufficient cash flow to support loan repayment.
  • Be no more than 30 days late on any bills.
  • Not have any mortgage rate adjustments due during the term of the loan.
  • No bankruptcy in the past 12 months, no late rent or mortgage payments over the past 12 months and no foreclosures over the past 24 months.
  • If your business has less than six months of sales, it must be located at home or in an incubator and must have less than $500 in past-due debt. In addition, you must present your most recent paystubs and provide a business plan with a 12-month cash flow projection.


Accion charges closing costs between 3% and 5% of the loan balance and applies a $135 processing fee. Access to funding usually takes one month, according to Fundastic.

Opportunity Fund

Opportunity Fund is California’s largest nonprofit microfinance lender, financing over 3,000 loans totaling $81 million, according to its website.

Loan terms

The company offers business loans from $2,600 to $100,000, at fixed interest rates between 8.5% and 18%, with terms ranging from one to five years — but only for California businesses.

The company offers four different types of loans:

  • EasyPay loans, which aim to be an affordable alternative to merchant cash advances, with interest rates between 8.5% and 15%.
  • Small business loans, which range from $10,000 to $100,000 at interest rates between 8.5% and 12%.
  • Opportunity loans are smaller loans that range from $2,600 to $10,000 and are suited for inventory, equipment and vehicle purchases. Rates are 8.5% to 15%, with up to two-year repayment terms and no early repayment penalty.
  • Equipment and vehicle financing, like loans for food trucks, taxis, limos, fleet vehicles and vans.


To prequalify for a loan, you must have a business in California, have been in business for at least one year and have no bankruptcies, open tax liens or past-due child support payments in the past 12 months. Ineligible businesses for Opportunity Fund loans include gas stations, bars and clubs, liquor stores, finance or lending businesses, real estate investment companies and entertainment and export businesses.


As mentioned, you must own a business located in California and have been in business for at least one year to qualify for a loan. Also, closing costs are up to 5% of the loan amount.

Which microlender is best for you?


  Kiva Zip Accion Opportunity Fund
Microloan size $5,000 to $20,000 $500 to $50,000 $2,600 to $100,000
Loan term 24 to 60 months 6 to 60 months 12 to 60 months
Loan Type Term loan Term loan Term loan, cash advance
Interest rates 0% 10.99% and up 8.5% to 15%
Time to funding Several months One month 6 days
  • Recruit from own network
  • Can’t be in foreclosure or bankruptcy
  • Must have positive social impact
  • Credit score of 525+
  • Sufficient business cash flow
  • No bankruptcies in past 12 months
  • No late payments on rent or mortgage over past 12 months
  • Business must be located in California
  • No current delinquencies
Closing costs 0% 3% to 5% Up to 5%

Kiva is a good choice for a socially impactful small business that’s looking to raise a small amount of money ($10,000 or less), and can wait for the funding to arrive. After all, a 0% interest loan is a pretty sweet deal that likely can’t be found anywhere else. However, there are several potential drawbacks to be considered, including a slow funding process, zero funding if you don’t meet 100% of your goal, and a six-month waiting period before restarting the application process for another loan.

Accion offers reasonable rates, even though closing costs can be high and you’ll also pay an application fee of up to $135. Compared with traditional bank loans, however, the funding process is quicker and rates are only slightly higher. The one downside is the stringent loan requirement. If you were late on your mortgage or rent payments over the past year, or if you’re not up-to-date on all of your bills, you likely won’t qualify for a loan. In addition, borrowers can’t have a mortgage adjusts during the term of the loan, so those with an adjustable rate mortgage likely won’t be able to qualify.

The Opportunity Fund provides a solid alternative to traditional bank loans. And the company’s EasyPay cash advance loan is likely far better than the typical merchant cash advance. The company offers an 8.5% to 15% fixed interest rate, lower than the upwards of 70% charged by merchant cash advance lenders. But only California residents are eligible, and the loans come with high closing costs of up to 5%.

For more information about how to start and run a business, visit NerdWallet’s Small Business Guide. For free, personalized answers to questions about starting and financing your business, visit the Small Business section of NerdWallet’s Ask an Advisor page.

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