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Microloan Program For Small Businesses: Facts Finder

With a microloan, founders successfully start their own business. Create a business plan with Zandura and prepare perfectly for your bank interview. This is how you get a microcredit from the SBA microloan program.

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Portrait of a young man standing at the counter in his cafe.
Starting up relaxed with the Microloan Program.

Microloan Program In A Nutshell

  • The Microloan Program of the Small Business Administration (SBA) is a lending program designed to provide small business owners with access to working capital, inventory, and supplies.
  • The loans offered through this program range from $500 to $50,000 and are provided by intermediary lenders, who receive funding from the SBA. These intermediaries are typically nonprofit organizations with experience in lending and working with small businesses.
  • The SBA's Microloan Program is intended to help small businesses that may not qualify for traditional bank loans due to lack of collateral or credit history.
  • The repayment terms for these loans can range from 6 to 48 months.

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.

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 six years 
  • Interest rates: Interest rates vary depending on the intermediary lender; generally, between 8 and 13 percent 

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