Are you a small business owner? Do you need funds to start up or grow your business? Try out the SBA microloan program. Follow the SBA microloan application guide below to qualify.
Below is all you need to know about the SBA microloan program.
Table of Contents
What is an SBA Microloan?
The Small Business Administration (SBA) offers microloans to small businesses. Small business owners who meet the criteria can borrow up to $50,000, but most loans are significantly lower. The average microloan is about $13,000.
SBA microloans, unlike many standard loans, are available to small-business entrepreneurs with no credit history and poor incomes. The program is also intended for businesses that are underrepresented by traditional banks, such as those run by women and minorities, as well as those in low-income areas.
What Can I Use Microloan for?
Microloans can be used to assist small businesses to expand for a variety of reasons. Use them when your small business needs less than $50,000 to rebuild, reopen, repair, enhance, or improve.
You can use microloans for:
- Purchase of supplies, furniture, machinery, equipment
- Working capital
SBA Microloan Loan Eligibility Requirements
Beyond those broad parameters, each lender’s eligibility requirements will differ. Some intermediary lenders impose a credit score minimum, while others do not. Generally, they require some form of collateral as well as the business owner’s guarantee.
Microloan Application Requirements
These are the documents you need to provide when you are applying for an SBA microloan. The particular documentation needed will vary, however, these are the general documents required:
- Personal tax returns (at least two years)
- Cash flow projections.
- Contracts
- Business tax returns.
- Balance sheet and income statement.
- Business lease and contracts
- Recent pay stubs.
- A list of collateral.
- Business plan
