Microloans (original) (raw)
Smaller-size loans of up to $50,000 provided through SBA funding intermediaries.
Content
What is a microloan?
The microloan program provides loans up to 50,000tohelpsmallbusinessesandcertainnot−for−profitchildcarecentersstartupandexpand.Theaveragemicroloanisabout50,000 to help small businesses and certain not-for-profit childcare centers start up and expand. The average microloan is about 50,000tohelpsmallbusinessesandcertainnot−for−profitchildcarecentersstartupandexpand.Theaveragemicroloanisabout13,000.
SBA provides funds to specially designated intermediary lenders, which are nonprofit community-based organizations with experience in lending as well as management and technical assistance. These intermediaries administer the Microloan program for eligible borrowers.
Am I eligible?
Each intermediary lender has its own lending and credit requirements. Generally, intermediaries require some type of collateral as well as the personal guarantee of the business owner.
How do I use a microloan?
Microloans can be used for a variety of purposes that help small businesses expand. Use them when you need less than $50,000 to rebuild, re-open, repair, enhance, or improve your small business.
Examples include:
- Working capital
- Inventory
- Supplies
- Furniture
- Fixtures
- Machinery
- Equipment
Proceeds from an SBA microloan cannot be used to pay existing debts or to purchase real estate.
What do I need to apply?
Microloans are available through certain nonprofit, community-based organizations that are experienced in lending and business management assistance. Individual requirements will vary.
To apply for a microloan, work with an SBA-approved intermediary in your area. SBA-approved lenders make all credit decisions and set all terms for your microloan.
Contact an intermediary
Find authorized intermediary lenders participating in SBA’s microloan program.
How do I pay back my microloan?
Loan repayment terms vary according to several factors:
| Repayment terms | Amount, planned use, lender requirements, needs of the small business owner Maximum repayment term allowed for an SBA microloan is seven years |
|---|---|
| Interest rates | Interest rates vary depending on the intermediary lender Generally, between 8%-13% |
Existing borrowers
For help with your account balance, due date, or any other questions regarding the specifics of your loan, please contact your lender directly, or contact the SBA loan servicing center listed on your account statement.