Frequently Asked Questions
Q: What are the requirements for a microloan?
A: Your business must be in located in an area serviced by a microloan lender, you must have a complete loan package and supporting documentation, you must be denied by 2 financial institutions, and provide copies of the denial letter, if the loan request is over $20,000. Most programs have loans that are made on a secured-basis with personal guarantees, sometimes including collateral and/or a co-signer. The borrower will pay loan closing costs and filing fees. Credit requirements and other criteria for approval are as outlined on page 3 of this free report.
Q: Is the microloan the same as a grant?
A: No, the microloan is not a grant. The loan will be required to be repaid over a period up to 10 years.
Q: Is the microloan program only for existing businesses?
A: The microloan program is for startups as well as existing businesses.
Q: Does my credit score matter in obtaining a loan?
A: Microloans aren’t determined based on your credit scores alone. However, your credit does play a factor in the approval process, and can be the basis for being denied. Micro-lenders review the overall package (credit, business concept/plan, financial information, collateral, and use of proceeds), and not just credit scores.
Q: Is the microloan program for women and minorities only?
A: The microloan program is open to everyone. Ethnicity and gender is not a factor when applying for a microloan. There are, however, special programs to targeting women, veterans and those with disabilities.
Q: Am I guaranteed funds if I’m denied by two (2) banks and have a business plan?
A: Unfortunately, being denied by two (2) banks does not guarantee acceptance to our microloan funds. The two (2) letters of denial (required if your loan request is over $20,000) by commercial banks or credit union is a requirement by the SBA to be eligible for the program. There is still an application process to determine if applicants are approved for the funds.