What the microloan program is
The SBA Microloan Program provides loans up to $50,000 through intermediary nonprofit Community Development Financial Institutions (CDFIs). The SBA lends to the intermediary; the intermediary lends to the small business. Average loan stays around $16K — small but transformational for businesses that can't qualify for bank credit.
Who borrows
80% of microloan borrowers would not qualify for a conventional bank loan. 50%+ go to minority-owned firms; 47% to women-owned firms; 60% to startups under 2 years old. Top use of funds: working capital (61%), equipment (24%), inventory (10%).
The lenders
- Accion Opportunity Fund — largest microlender (~$28M/yr)
- Justine Petersen — St. Louis-based, ~$12M/yr
- LiftFund — Texas, ~$11M/yr
- Grameen America — NYC, focus on women + immigrant entrepreneurs
- Approximately 175 active intermediaries nationwide
Sources