The Microloan Program: In Detail
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by: richie
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One of the best loan programs offered through the United States government and the Small Business Administration, is the Microloan Program.
This program has been specifically designed to target those individuals and small business owners who need financial help with their company, but lack the credit to obtain larger loans.
This small business loan is relatively easy to get, as long as your credit is not incredibly bad, and as long as you can afford to make the monthly payments.
The Microloan Program for small business loan is administered through the Small Business Administration, but it’s lenders are usually non-profit societies who are committed to providing loans to those who can not get business loans usually.
In fact, the concept of the microloan has spread around the world, allowing individuals interested in starting businesses obtain loans, often for only a few hundred dollars in some places like India. The concept, also called microcredit, earned Grameen Bank founder Muhammad Yunus the Nobel Peace Prize in 2006.
The Microloan Program administered by the Small Business Administration allows loans of no more than $35,000, for no longer than seven years of amortization. This form of small business funding can only be used for the purchase of equipment, promotion, and general business activities. The small business loan then allows the company owner to fund their business, while making monthly payments that have low interest rates. Essentially, the entire program has been crafted and directed to those who cannot get normal loans, while not taking advantage of them through high interest rates and incredible demands on collateral.
For many, this loan program is exactly what they need to get their business off the ground, without going to a lender that is going to charge incredibly high interest on their loan, with poor payment terms that will leave the individual in severe debit.
Sadly, there has been debate that this loan could be discontinued by the federal government because of its costs. If this happens, millions of small business owners will lose their ability to get low-cost loans to help fund their company. It would be a shame if this happened, and a severe blow to the entrepreneur spirit of American capitalism.
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