Microloan Program

To assist entrepreneurs, business owners, and other individuals possessing the capability to operate successful business concerns and to assist small business concerns in those areas suffering from a lack of credit due to economic downturns. Under th

To assist entrepreneurs, business owners, and other individuals possessing the capability to operate successful business concerns and to assist small business concerns in those areas suffering from a lack of credit due to economic downturns. Under the Program, the Small Business Administration (SBA) makes loans or provide guaranties to private, non-profit, and quasi-governmental organizations (intermediary lenders) that utilizes the loan funds to make short-term, fixed interest rate microloans in amounts up to $50,000 to start-up, newly established, and growing small business concerns. The Microloan Program is to be used exclusively for working capital, inventory, supplies, furniture, fixtures, machinery, and/or equipment. In addition, the SBA will make grants to participating intermediary lenders to provide marketing, management, and technical assistance to prospective borrowers and borrowers receiving microloans. Under the Program, SBA will also provide training for intermediary lenders participating in the Microloan Program.

An applicant is considered eligible to apply if it meets the definition of an intermediary lender as published in program materials, 13 CFR, and PL 102-140, and meets published minimum experience and capability requirements.

Small businesses, minority entrepreneurs, nonprofit entities, business owners, women and low-income, and other individuals possessing the capability to operate successful business concerns.

Loans to intermediaries with terms and restrictions as provided in Public Laws 102-140, 102-366 and 105-135 and subsequent regulations as published in the Federal Register.

The maximum life of a loan to an intermediary lender is 10 years. Grants award amounts are based on the total outstanding balance of loans made to the intermediary lender by SBA and by the annual microloan production of the intermediary lender. See the following for information on how assistance is awarded/released: Additional detail available at https://www.sba.gov/sites/default/files/2018-05/Microloan%20SOP%2052%2000%20B.pdf

Applications are evaluated individually. Each is rated on its own merits or, in the case of an affiliated group, on the merits of each of the organizational parts that make up the whole. Qualitative and quantitative information regarding the applicant is reviewed. Criteria include but may not be limited to: (1) Experience level of Organizational Officers, Directors and personnel to be active in the Microloan Program operation; (2) Financial strength of the applicant organization; (3) Knowledge of the local economy; (4)Lending/loan performance; (5) Current and proposed technical assistance program; (6) Current and Proposed market to be served; (6) Availability and probability of matching contributions; and (7) Information submitted in the grant application package.

Intermediaries are notified by SBA. Microborrowers are notified by the intermediaries.

Loan applicants can expect an answer from the SBA approved intermediary lender within 15 days from the date of application acceptance.

Based on performance.

Decisions on the part of the SBA are final. SBA will not become involved in appeals by microborrowers to intermediary lenders except in the case of suspected violation of Federal regulations.