Micro-Lending Helps Low Income Entrepreneurs Get Started
Have an idea for a business but unable to secure the needed financing? The threshold for borrowing from banks has gotten tighter in recent months. And, it’s best to avoid high-interest options like credit cards and predatory lending.
Micro-lending is an option available to moderate and low income entrepreneurs. Funds from micro-loans can be used for a wide range of startup and operating costs like purchasing equipment, marketing, licensing fees and insurance to name a few.
Micro-loans through the U.S. Small Business Administration (SBA) average around $13,000 while the maximum you can borrow is $35,000. Repayment takes no more than six years and interest rates vary depending on the intermediary lender but generally are between 8 and 13 percent.
All credit decisions are made by an intermediary at the local level. If you’re interested in applying for a microloan, contact your local SBA microloan intermediary.
Accion USA is a non-profit, private sector source for microloans…they provide loans from $500 to $50,000 to business startups and small businesses. The average loan is $5500. They work one-on-one with you to help build a solid credit history and get your venture off the ground.
Kiva.org is an organization where individuals can donate small amounts (i.e. $25-$50) and see who it’s going to and how they’re using it. Choose an entrepreneur in either the U.S. or the third world to support – you can receive updates as to how they’re using the funds, their progress and even repayment.
After obtaining a micro-loan to get you started, online incorporation service MaxFIlings.com can help you form a corporation easily for minimal cost.