SBA 101 – Small Business Microloans

The US Small Business Administration (SBA) offers several funding programs, advocating for entrepreneurs in every state. Our previous article discussed the 7(a) loan program. This article will explore some details about the SBA’s microloan program.

What Is a Microloan?

The microloan program provides loans up to $50,000 to help small businesses and certain not-for-profit childcare centers start up and expand. The average microloan is about $13,000.

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.

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.

-SBA

At Fairway Funding, we can match your small business with reputable microlenders in under 48 hours!