If you are the owner of a startup company or are self-employed, you can avail micro loans from banks for all your business needs. These are short-term loans with a low-interest rate and generally, do not exceed $35,000. You can use these micro business loans to buy inventory, essential supplies, fixtures, and you can even use the loan to buy another business. For more details on leveraging your business on social media, you can turn to www.marketingland.com and subscribe to their newsletter.
Terms And Conditions Apply
· The repayment term and interest rates vary from one microlender to another. However, the upper limit is 6 years for all.
· Most of the microlenders require at least one of the owner to provide a valid collateral as security.
· If you are obtaining a microloan from an SBA-backed financial institution or any other SBA affiliated program, the borrower must meet certain business requirements in order to qualify for the loan.
Types Of Business That Use Microloan
Several businesses do not require lots of investment to make it big in the industry. For example, there was an entrepreneur who prepared cheese at home. They turned into a sensation overnight, and everyone wanted to buy the cheeses. Due to lack of sufficient capital, the entrepreneur could not buy the basic tools, machinery, and raw materials for the production.
This is where a microloan comes into the picture. You can use this loan to propel the business in the right direction.
Few Lenders You Can ‘Bank’ Upon
Here are a few non-profit lenders that are not backed by SBA.
· Kiva- You get a unique chance to raise money for entrepreneurs in different parts of the country. You can start off by contributing as little as $10 or more and help interested business owners in planning the future of their business.
· At Opportunity Fund you can get microloans for the capital investment, machinery purchase, and other business related needs.
· You can obtain micro loans ranging from $500 up to $50,000 at Accion USA. You can use the loan amount to remodel the warehouse, buy another company, purchase the latest inventory, and so on.
· Grameen America is an international organization that addresses the financial needs of local communities and women. It has an interesting system of functioning. Interested participants must form a group with other like-minded women. After a week of financial training, each participating member can open a savings account and they receive $1,500 for their business plan.
How To Qualify For The Microloan?
There are several factors like your current financial situation and your credit score that can come in the way of getting a microloan. In addition to this, lenders will have different criteria in order for the borrower to be eligible for the loan. Here are few ways how you can improve your chances of getting approval for the microloan.
· When you apply for a loan, you should be prepared to face a volley of questions regarding your professional background. You will be asked details about your qualification, experience, and any other detail to support the fact that you can handle the business well.
· If you can carry along financial data like a balance sheet, budget, and other documents, it will instill confidence in your capabilities to the lender.
Do some research work and equip yourself with the right skills, so you are qualified to receive the microloan for your small business.