According to Sarah Chenven, deputy director of Credit Builders Alliance, a non-profit social enterprise dedicated to building the capacity of a diverse and growing network of hundreds of nonprofits, says lending circles are comprised of people who unify, whether they share a commonality or not, “to leverage each other’s and their own resources to save and borrow to help them achieve individual goals.”

The concept of lending circles may be relatively new to American society, but not to the many cultures comprising the melting pot of our nation that have been pooling their resources for the greater good for years, she says.

In the United States, a growing number of non-profit organizations, such as Chenven’s, have “formalized the social lending process to help people build credit histories and improve credit scores to help them become part of the financial mainstream,” she says.

A recent article in the New York Times points to the growing acceptance of lending circles as a way for small business owners and individuals to raise capital and even improve credit scores.

According to a California lawmaker who sponsored legislation in August allowing non-profits to offer small no-interest, no-fee loans, this type of assistance “’crosses ideological lines because it’s so simple.’”

Access to credit is pivotal in breaking the cycle of poverty, California State Senator Lou Correa says in the article.

In that piece, Amy Brown, a program officer at the Ford Foundation, notes how difficult it is to be a part of the economic mainstream without credit.

According to the Times article, as many as 64 million Americans lack the paper trail needed to establish and build their credit. That reality is part of what feeds the outrageously costly payday lending and check-cashing industries.

Small business owners interested in learning more about this type of funding would be wise to check out Lending Circles, says Chenven. Not only does that web site offer a wealth of information regarding lending circles, it also allows guests to determine if there are non-profit lending circles in their area. If there aren’t, Chenven suggests entrepreneurs “approach organizations that support small businesses to see if they can bring them [lending circles] to the community.”

Another resource about lending circles is the upcoming Lending Circles Summit, set for October 26-28 in San Francisco. Chenven will be a featured speaker at the event, designed to educate attendees about the benefits of lending circles, how to establish and interact with them, and about their potential impact for raising the credit worthiness of participants.

Opportunities such as the summit are a “great opportunity [for small business owners] to meet with others going through what they are,” says Chenven.

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Tami Kamin Meyer is an Ohio attorney and writer who tweets as @girlwithapen.