Micro Business Loans

 

 

 

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Apply For A Micro Loan Today !

Microloans service entrepreneurs who need financing guideness to start or expand their company but cannot qualify for traditional bank loans due to past credit issues. Microloan organizations provide funding to start-up entrepreneurs, home-based businesses, existing and growing small business owners.

Small business owners seeking bad credit business loans may find a microloan meets their requirements because you may qualify with less-than-perfect credit, little to no assets and even limited business experience.
Company owners with bad credit or no credit history may qualify for a “credit builder” loan which allows you to get a small, short-term loan from a microlender which will help you establish and your rebuild credit.
Micro-Loans Who can Apply ?

Start-up businesses, newly established businesses, home-based businesses and growing businesses. Since this credit crunch it has become increasingly difficult to get approved for even the smallest business loan. A mircroloan might be the answer to your short term financing needs.
How much is available ?
The maximum loan amount is usually $35,000 with the average loan being $13,000. You can borrow as little as $1,000. A borrower may use the proceeds for working capital and acquisition of materials, inventory, supplies, furniture, fixtures, machinery and equipment.
Loans cannot be made to acquire land or property. Microloans are not a one-time deal.

Most microloan programs allow you to come back and borrow larger amounts once the first loan amount is paid on time without prepayment penalty.

Who provides the loans ?
Hundreds of microloan programs exist throughout the United States. Nonprofit agencies, private foundations and the Small Business Administration (SBA) operate microloan programs.
The US SBA does not grant microloans directly, they provide low-cost loans and grants to non-profit intermediaries such as nationwide microloan centers which redistribute the funds to qualified small businesses.
Microlenders are typically small community-based nonprofits. The SBA uses about 160 microlenders around the country as intermediaries to provide SBA loans to small businesses.
The Obama Administration’s Recovery Act of 2009 gave an additional $50 million to microlenders, increasing their annual operating budget from approximately $25 million. Some microlenders receive their funds from state or local government and even philanthropic organizations.
General lending guidelines are established by the intermediary agency and all credit decisions are made on the local level. Business owners will likely be required to submit a business plan. If you do not have a business plan most intermediaries offer business planning courses and other training. There are also templates that can assist you in preparing a business plan at SBA template.
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 rate on microloans can be lower than traditional small business financing and often much lower than bank credit card rates.
Credit and Collateral
The community based intermediary establishes its own lending and credit requirements. Some intermediaries may require collateral but not likely. The business owner will be required to personally guarantee repayment of the loan. A credit report is pulled on the small business owner but it is not the only criteria considered.
Bad credit business owners are often approved with a solid business plan and business training. Although it is completely up to the Microloan organization to establish underwriting criteria, they are accustomed to dealing with start-up businesses who have little collateral and less than perfect credit.

Training and assistance
The intermediary is required to provide small business training and technical assistance to the borrower if needed. Small business owners may be required to complete a series of training or a business planning course as a precondition before the loan application is approved.
Where to apply ?
Small business owners should apply for a microloan in their community, city or county. Visit the SBA to find a list of microlender intermediaries around the country. While microloans are a good source of funds for small businesses unable to borrow from traditional banks, it can be cumbersome to obtain a microloan if training and business planning courses are required.
Another problem with microloans is that intermediaries distribute the loans in their own communities and if you do not live in an area of an intermediary then a microloan may not be available to you. If this is the case you can research your State and local government agencies for alternative sources as some offer loans similar to the microloan program.

Alternatives-

OnDeck

Micro loans provide your business with small capital injections that can really make a huge difference to your company. Typically micro loans are $35,000 and under. They also work for both newly established and start-up companies. No matter what stage in the developing your business is in, you should consider this financing option.

These micro loans are most often provided by the SBA (Small Business Administration) as they provide the money to non-profit community lenders who are responsible for making the loan decisions locally. The SBA also guarantees other types of loans as well. They will guarantee up to 70% of some SBA loans as well. The government is a great resource to turn to for this kind of assistance.

There are restrictions to micro loans as they can only be 72 months or 6 years maximum. All micro loans will require some collateral and a personal guarantee of the business owner. This means you will have to make up the payments if your business cannot. This can put you in a rough spot, so be careful.

There is another requirement with this sort of loan and that is you normally will be required to take a training on businesses and also fulfill special business planning requirements. It is important that your business has a business plan in place as it will not only help you get financing, but it also helps you run your business more efficiently.

Get A Micro Loan Here

 

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