In the series of blogs on fund a small business, I have elaborated on crowdfunding way. If crowdfunding is not your option, then we have many other ways to fund a small business to make money. A microloan is the next decent way to fund a small business.
So, let’s dig deep into microloan to fund your business. Money invested right grows to make a profit for life.
Microloans have a great fit for small business loans. We can apply microloans with bare minimum collaterals. The period is low and interest rates are high, but the reason is to get a quick loan is to make a quick profit for small businesses. This trait of making quick profit has kicked off the eruption of Fintech firms to offer microloans. It can fund your in-flow resource or can pay for the operational expenses.
When to opt for Fintech based microloans to fund a small business
Ideally, the choice depends on how much money you need and for what period. When you opt for a microloan, still have an option to go for a business loan for a longer time. Microloan is usually used to come out of adversity. Here is a reason to opt for a microloan for your business.
- To start a new business
- To buy inventory and supplies
- To pay salaries for a month
- For covering seasonal expenses
- New marketing strategy
If you still thinking about what to start as a small business, read 22 ideas for small business
The best microloans to fund a small business
Traditional businessmen used to opt for such loans locally from the person or community for the quick fund. Use it and pay it back to wait for the next opportunity to make money via a quick microloan. With Fintech, such communities and private small firms give you quick microloans. I would discuss some chosen ones.
1. A microloan from LiftFund to fund a small business
LiftFund acts like a great option for an entrepreneur in need of immediate cash. It connects multiple banks, including SBA, as an option. The amount ranges from $500 to 1million. With API connects to the gambit of banks, it even offers you traditional loans.
With LiftFund you can finance anything your small business would need from startup capital to inventory and real-estate investment. It operates in 13 states of the US (find yourself). LiftFund would need collateral equal to the amount of loan you take. In case you need a fund for your startup, they would ask for another source of income to pay the microloan.
2. Accion USA to fund your small business
Accion USA is the country’s largest microloan organization. It operates from 30 offices across and has provided loans to more than 50k aggregating to over $500 million. Accion is a global firm to fund a small business. Accion USA is the local arm of Accion global.
To get a loan for your business, you need to have a credit score of over 575, no foreclosure of loans in the last 2 years, and no bankruptcy. The requirement varies based on the loan amount and purpose. Accion partners with banks like Citibank, Sam Clubs, and other private backers. The loan works exactly like SBA loans.
3. SBA Microloans to fund a small business
USA Small business administration operated SBA loans are the most popular loans in the country for small businesses. SBA microloan operates under the administration of community-based nonprofit organizations. At maximum, it can loan $50k for 6 years period and at the interest rate of 7% to 13%, based on the profile.
To apply for SBA microloans, you need to contact the SBA district office close to your place of residence.
4. Kiva way to fund your startup
An online platform, Kiva, allows you to apply online on the portal for a microloan. Kiva operates as community funding, where you put your proposal online for a microloan to fund a small business. Invite your friends and relatives to increase the traffic on your page. If liked by the group, you will get a fund of $15k for 3 years. The best part, the loan comes at 0% interest.
When you get funding from Kiva, it allows you to connect people on Kiva like a marketing platform. It helps to spread the word of your business and earn quick, to pay the loan at earliest.
5. Grameen America to fund startups
Grameen America works for the cause of Ladies in small businesses. Why should the boy have all the fun? Grameen believes in allowing ladies as first. It funds women entrepreneurs with low incomes. They have funded more than 100k ladies across the US with more than $1 billion disbursed already.
If you are a low-income lady in a small business, then you can opt for Grameen to either start a business or operate your set business for more profits. It works with the method of collaboration. You need to form a group of 4 other ladies in low-income professions or businesses. You need to attend financial well-being seminar and open a savings account in Grameen America. Later you get a loan at 15% interest.
6. Opportunity Fund for small business
Low-income immigrants and people of color managed this collaboration. Especially works well for ladies. Opportunity Fund’s mission is to fund a small business for immigrants. They operate in places like New York, California, Nevada, and Washington. Latest they might have opened at many other places in the country.
We can use the fund for a variety of business requirements, and you will be eligible for a loan between $2500 to $ 250k for 1 to 5 years max. It works to disburse in a maximum of 5 days if all goes well.
Money is a great booster for any business. It helps you take a bold decision and grab opportunities staring at you, which otherwise you will leave if there is no money. Microloans are a great way to fund a small business in need of cash. Apart from the microloans I mentioned above, you will find many such backers with funds locally and even specific for business to business.
Make a wish of loan and microloan is right in the corner. Make sure you pay it on time and work closely with your credit score.
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