The MicroLoan Program provides very small loans
to start-up, newly established, or growing small business concerns.
Under this program, SBA makes funds available to nonprofit community
based lenders (intermediaries) which, in turn, make loans to eligible
borrowers in amounts up to a maximum of $35,000. The average loan
size is about $10,500. Applications are submitted to the local
intermediary and all credit decisions are made on the local level.
TERMS, INTEREST RATES AND FEES:
The maximum term allowed for a microloan is six years. However,
loan terms vary according to the size of the loan, the planned
use of funds, the requirements of the intermediary lender, and
the needs of the small business borrower. Interest rates vary,
depending upon the intermediary lender and costs to the intermediary
from the U.S. Treasury.
COLLATERAL
Each intermediary lender has its own lending and credit requirements.
However, business owners contemplating application for a microloan
should be aware that intermediaries will generally require some
type of collateral, and the personal guarantee of the business
owner.
TECHNICAL ASSISTANCE
Each intermediary is required to provide business based training
and technical assistance to its microborrowers. Individuals and
small businesses applying for microloan financing may be required
to fulfill training and/or planning requirements before a loan
application is considered.
Find
a Microloan Intermediary in Your Area