Steps to getting a microloan

Written By Gary Spirer Published March 28th, 2010

If you need a small loan to start your business you may want to consider a Microloan. Here’s how.

Step 1 Understand microloans
It is a relatively new concept and despite what some business owners may be saying, microloans of $500 to $50,000 are available through a variety of government programs, as well as nonprofit and private sources. A micro-loan is generally defined as a loan of up to thirty-five thousand dollars for up to six years, usually to a business with only a few employees. The average micro-loan in the United States is twelve or thirteen thousand dollars. Micro-loans began as a way of providing financing to businesses in economically-deprived nations–and they have been strongly endorsed by the United Nations–but they have also caught on with small businesses in the US, especially in low-income neighborhoods.

Step 2 Know when to apply for a microloan
In many cases, small business owners apply for micro-loans when they are strapped for cash and their banks turn them down for larger loans. If this sounds familiar to you, then a microloan can help.

Step 3 Apply for a microloan
Keep in mind, however, that you’ll need to qualify for the money, submit an application, and have a business plan or idea. A Google search for microloan providers is adequate or you can find these loans on the Small Business Administration website or at your local bank. There are even programs that allow you to give mircroloans to others and the same organization can help you. A program called Kiva is designed for people to help third world countries by giving them a microloan to start up businesses in their own countries in an effort to help that country survive and thrive. Kiva loans are known as the loans that change lives and have gained a lot of recent praise and publicity.

It’s that simple. Remember, there are many untapped sources of funding for your business. Please visit for more great business advice.

1 Comment

  1. i need to raise some money 10k my mortgage is 63k and secured loan is 15k. at house is valued at about 155k, but i know the banks wont value it at that. please advise me on what i can do

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