You might consider a microloan if you’re trying to start a business or expand your current small business. These loans are available for $50,000 or less and come with low interest rates and flexible repayment terms.

What is microloan?

The microloan program provides small loans up to $50,000, and it’s designed for small businesses and eligible nonprofits. According to the microloan, the average microloan is around $13,000.

These loans can be used for working capital needs and to purchase equipment and inventory. However, it’s also worth noting that you can’t use the funds to pay down existing debt or buy real estate.

When you receive a microloan, the funds won’t come directly from the microloan. Instead, the microloan provides the funds to intermediary lenders, which are usually nonprofit, community-based organizations.

Advantages

• Easier to qualify for: If you’re a startup or don’t have much business history, it can be hard to qualify for a business loan. Microloans, on the other hand, come with less stringent requirements, having been built to provide financing to businesses that traditionally struggle to find funding.

• Faster funding: In comparison, you could receive funding through your microloan in just 30 days.

• Flexible loan terms: Microloans come with repayment terms of up to 6 years, so your monthly payments are more affordable.