Microloans
Smaller-size loans of up to $50,000 provided through SBA funding intermediaries.
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.
Am I eligible?
Each intermediary lender has its own lending and credit requirements. Generally, intermediaries require some type of collateral as well as the personal guarantee of the business owner.
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
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- Amount, planned use, lender requirements, needs of the small business owner
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- Maximum repayment term allowed for an SBA microloan is six years
Interest rates
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- Interest rates vary depending on the intermediary lender
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- Generally, between 8 and 13 percent
Existing borrowers
Existing borrowers can create an account in SBA’s Capital Access Financial System (or CAFS) to monitor their loan status. Get account enrollment instructions.