Small Business Loans From SBA Micro-Loan Program–How Can Business Owners Help Their Company Through Microloans?

Many small business owners have claimed that access to capital has been tight as many financial institutions were unwilling to make small business loans available. However, there are some reports that state, recently, small business loans were being acquired by more companies, which either points to lenders making small business capital more available or businesses being in a position where they are more willing to borrow.

While there are traditional small business loan opportunities for companies, the Small Business Administration has been able to guarantee a higher percentage of traditional small business loans throughout the year thanks to funding made available from Congress. These SBA loans can be easier to obtain, in some cases, when it concerns a lender’s willingness to offer lines of credit to a business. These SBA loans offer protection for lenders, when funding has been in place, since they guarantee a bank against loss up to a certain percentage if a borrower defaults.

Yet, businesses have also gained funding through SBA microloans, which have been helpful to companies who may not be able to find funding through a traditional business loan or who may not need an excessive amount of credit or capital. Microloans from the SBA micro-loan program are typically used to purchase office supplies, inventory, or equipment, which will obviously be helpful to any company that seeks to grow and eventually add a larger number to their workforce.

While this type of funding is not available to companies who wish to consolidate debt or purchase real estate, they have been helpful to businesses who need only a small amount of capital for their company. The SBA has set the maximum loan amount from the micro-loan program at $35,000, which again, can be helpful for most businesses who are simply attempting to set themselves in a position where they may become more profitable.

Small businesses have been looked to for job creation over the past months, but high unemployment continues as many companies are simply unwilling to hire at the present time or cannot afford to add workers to their payroll. Yet, companies who are in the position to benefit from these microloans have, in the past, been able to work with intermediary lenders in order to gain access to micro-loan funding.

As a bonus, some companies who have obtained these types of loans also have been offered assistance and advice through business specialists, which may help a company in need of micro-loan funding use this money in a way that is more beneficial to their overall goal of expansion and becoming more successful down the road.