Micro Loans

These Loans are commonly used by non-profit or start-up organizations. The Small Business Administration (SBA) will provide micro loans in the form of $35,000 or less depending upon your business needs. Most small businesses will acquire around $13,000 - $15,000 from the SBA in the form this type of loan.

The SBA micro loans are used for organizations that are trying to benefit their communities. When you apply for micro loans, you will actually do so using traditional lenders. The non-profit community lenders will then take a look at your application, business credit, and a few other things when they are debating whether or not to offer you a loan. If you don’t have business credit, use small lines of credit to start building your business credit and improve your ability to gain approval for a micro loan.

Lenders that provide the micro loans will set their own restrictions pertaining to the lending requirements of their loan terms. These decisions may be based on your businesses’ activity in the community, credit rating, collateral, etc.

When you apply for micro loans, your credit terms are usually 6 years or less. You will need a personal guarantee or collateral to secure the loan and reduce the risk to the lender. Without collateral, the lender will deem you a high risk investment and they will reject you for a micro loan.

The SBA does require lenders to put you through a training program along with business planning requirements before they approve you for the loan. You must have a business plan that describes what type of service you will offer to your local community and how you plan to benefit the community. Upon completing the training requirements and providing the lender with your business plan, you can then fill out the application and await their decision.

Unlike no other loans, micro loans are usually quite easy to obtain. The only struggle you will face is finding the non-profit lender that has the micro loans to offer. Since they are community-based, you may have a bit of a challenge if you are in a smaller community that doesn’t offer these loans.

Micro loans are often given to new businesses to provide you with working capital so you can start your business. Most new businesses will use the money to purchase equipment, raw goods, supplies, furniture, and other things that are necessary to start your small business.


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The SBA micro loans are used for organizations that are trying to benefit their communities.

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