Shanu Singh Guliani

Is a MicroLoan Worth Looking into for My New Start-Up?
August 20, 2007

When you only need a little cash to grow, a microloan might be worth taking a look at. The Microloan Program was developed by the SBA to increase the availability of very small loans to small-business borrowers.

Microloans are available for-profit businesses that meet the SBA’s size and type-of business standards. This includes proprietorships, partnerships and corporations, whether they are start-up, newly-established or growing. No loans can be made to not-for-profit organizations, media-type business, landlords, co-ops, religious organizations or for illegal activities.

Microloans are best for startup companies with lower capital requirements and limited operating history and are an especially good source of funds for businesses that have never borrowed from a bank.

The range of funds that are typically available are less than $100 to a maximum of $35,000. Average loan size is $13,000. The maximum term for this type of loan is six years and interest rates vary, depending upon the intermediary lender and costs to the intermediary from the U.S. Treasury. Generally these rates will be between 8 eight percent and thirteen percent.

The Microloan Program can offer a cash and credit jump-start to small or start-up businesses. Small businesses that are interested in applying for a microloan should contact a microlender in their area. The following link contains a state-by-state list of all SBA participating Microlending Intermediaries and their areas of operation. SBA Microlending Intermediaries

Posted by Shanu Singh Guliani on August 20, 2007 | Comments (0)