What
Are Micro Loan
Lenders?
Business
loans for women
especially, are more than often funded by micro loans.
 Micro
Lenders: A company or organization that offers small loans to
businesses
that are generally unable to obtain financing from a conventional
source.
Microlender loans often range from $5,000 to $25,000 at interest rates
higher, but not always, than those charged by traditional commercial
banks.
Micro loans
first started
in underdeveloped countries to help the poor become entrepreneurs. The
loans were generally small. Today this has all changed. Micro loans are
now available throughout the United States and one of their principle
groups
is women! Because women have had such a hard time getting approved for
business loans, the need for micro lending has become a necessity. Many
organizations and companies are now providing micro loans to business
women
on a daily basis.
From Businessweek:
As Credit
Dries Up, More
Owners Seek Microloans- The new candidates for this financing
alternative
have high credit scores and business track records... Their money comes
from private donors and sometimes the government. As banks clamp down,
says Sara Ignas, a spokeswoman for the Association for Enterprise
Opportunity,
a microlending trade group, "our members have seen an increase in
demand
for loans from those who a year ago could get a bank loan"
The numbers
are small but
the trend is interesting. Microlenders say they exist to serve those
who
aren’t served by banks. That has long meant people with poor
credit, or
not enough collateral, or people in low-income communities where banks
don’t have much of a presence. But now that we’re
seeing dramatic changes
in the banking sector and a tightening of credit, microloans may become
a mainstream financing option for very small businesses.
BankRate
is quoted:
Micro-creditors
are an often
overlooked source of capital for the very smallest of businesses,
filling
the growing need for small business loans that banks and other lending
institutions won't touch.
According
to the Association
for Enterprise Opportunity, a trade association representing some 450
micro-enterprise
organizations, a micro-loan is $25,000 or less made to a company with
five
or fewer employees. The industry average micro-loan is $12,000...
According
to an ACCION
study, there are an estimated 13.1 million micro-entrepreneurs in this
country, including 2.4 million African-Americans and Hispanics. Of
those,
an estimated 10.8 million, or 82 percent, have never received a
business
loan from a bank. Many of them won't even consider a bank loan due to
bad
or nonexistent credit, lack of collateral, youth, race or the small
size
of the loan they need...
Repairing
Bad Credit may be necessary before applying for that small
business micro loan capital.
You
can find several
United States micro loan lenders at US
Business Loan Lenders
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