Small Business Growth And Job Creation–Can Business Loans From Microloan Programs Help Companies?

Microloan opportunities for small businesses may be beneficial for certain companies as these types of loans typically are accessible to businesses that are smaller and have room to grow. There are different lenders who may be able to offer certain businesses these types of loans, but there are have been arguments that have also stated these types of microloan opportunities should be more widely used as they can help smaller businesses get on their feet.

Some argue that, due to their small amount, microloans are usually repaid by a business and may offer more security to lenders as a result. Understandably, there is no guarantee when it comes to small business lending as some companies may have an excellent business plan and may make good use of funding from a microloan only to fail due to their inability to generate business.

However, microloan programs from sources like Kiva.org and the Small Business Administration do offer opportunities for small businesses in numerous countries to gain access to funding opportunities in order to help their business become more profitable. Obviously, there are those who feel that lending practices by many financial institutions have been too constrained as of late, but many financial institutions have argued that businesses have been unwilling to borrow as well.

Microloans, on the other hand, can be more accessible in certain situations as their lenders may require more from the borrower. As an example, the Small Business Administration provides microloans to small businesses, but requires that these funds only be used for certain purchases and intermediaries of these loans must provide business training and technical assistance to borrowers.

Businesses who are able to obtain an SBA microloan can use the funds they receive to buy inventory or equipment, but they must also go through business training and assistance within this Microloan Program. Obviously, there are some business owners who may be well versed in running a company but only need a small amount in order to embark on a new endeavor, but there are those who feel that these types of loans which provide technical assistance to the borrowers may put a business owner in a position to better use the money they gain from this loan.

Again, there is no certainty when it comes to business or small business loans, but smaller companies which have a lot of room to prosper may benefit more so from microloans at the present time than from a traditional small business loan. Obviously, small businesses have been called on to create the jobs that will help lower our national unemployment rate and many feel this may be accomplished if access to capital from either traditional small business loans or these microloan programs is made more available.