By: Caitlin,

community sourced capital

Dwolla MassPay allows you to pay out up to 5,000 accounts with the upload of a single CSV file.  The easy-to-use tool is helping businesses across the U.S.simplify how they process disbursements, and to paint a fuller picture of how MassPay can be put to work we chatted with Community Sourced Capital (CSC).

CSC is a lending platform helping small businesses access capital in the form of zero-interest loans crowdsourced from members of their own community—it’s a loan without the strings attached. By making it simple for citizens to invest in their own community, the Seattle-based startup is building a collaborative network to help small businesses and local economies thrive.

The Back-Story:

community sourced capital team

The idea to build a community-funded loan program arose from a collegiate macroeconomics course, in which the CSC founders, all college classmates, came to a harsh realization—there isn’t a lot of love in finance. It was then that they decided to pursue their passion for helping others with their passion for smart finance.

“We know that small businesses are the key generators of jobs in our economy and character in our communities. Helping them is critical to the resiliency of both local communities and the national economy.”

Rachel Maxwell, CEO

While many doubted the feasibility of zero-interest loans at first, the CSC team has silenced many of their skeptics by letting their hard work speak for itself.  Both community members and businesses experience a bit of magic when they work together to fund a new loan—the business connects in a very meaningful way to their community and the community members feel great having supported a local business.

The problem CSC Solves for:

fund community sourced capital

According to The State of Small Business Lending Report, about 80 percent of small business owners who apply for a bank loan get rejected. Since 2008, there has been a 20 percent decline in small-business lending across the board. While many online lenders have emerged to serve businesses, they often charge interest rates upwards of 30 or even 50 percent.

In short, the current lending system is not designed to help communities thrive.

How CSC uses Dwolla:

CSC saw a problem, and they solved it by building their own innovative solution (similar to how Dwolla first started). One piece of their “lending platform puzzle” was to find the most effective way to pay back their small businesses—enter Dwolla MassPay.

“We went looking for a payment partner that could help us move money around the internet in a safe and cost-effective way. Dwolla stood out above all the other options. Truthfully, we fell in love with the mission the founders of Dwolla had. It just felt like a natural platform to be part of.”

Rachel Maxwell, CEO

Dwolla makes it easy and affordable for CSC to send payments to their lenders, while small businesses can use Dwolla to send loan repayments, saving them thousands.

“We really appreciate the savings of time and hassle Dwolla offers compared to creating, printing, packaging and mailing out checks. Our businesses pay back monthly, and sometimes the values can be small – think $3.26. Writing a check for this amount to send to someone is not practical so leveraging Dwolla for these transactions is really helpful – especially since the transaction is free under $10.”

Rachel Maxwell, CEO

CSC is working to solve the financial hurdles that SMBs encounter when starting and growing a business. Like CSC, Dwolla is working to solve for SMBs, but we’re maneuvering around different hurdles. For payouts or payments, Dwolla has solutions for businesses to be more effective in both cost and time. For CSC, a partnership with Dwolla made sense, the solution was a fit and the guiding principles aligned.

If you’re like CSC and want to partner with Dwolla, reach out to—we’ll be happy to provide any information you need.

Financial institutions play an important role in the Dwolla network.

Dwolla, Inc. is an agent of Veridian Credit Union and Compass Bank and all funds associated with your account in the Dwolla network are held in pooled accounts at Veridian Credit Union and Compass Bank. These funds are not eligible for individual insurance, including FDIC insurance and may not be eligible for share insurance by the National Credit Union Share Insurance Fund. Dwolla, Inc. is the operator of a software platform that communicates user instructions for funds transfers to Veridian Credit Union and Compass Bank.