Microloans are a new phenomenon in the finance world, but have transformed the landscape of funding and loans for small businesses the world over. When a big bank says no, it’s time to approach a micro-lender, who could be around in the neighborhood or town.
Microloans are small, short term loans carrying low interest rates. These are usually given to small businesses, home based ventures and self-employed individuals, as well as start-ups. The amount can range anywhere between $500-$50,000. The loans are often sought by those with no past revenue records.
A typical small or home based business often requires money for small needs, such as buying goods or paying for services, or to maintain operations. Since there are hardly any institutional investors who cater to such needs, micro lenders come to the rescue. The US government (SBA) too has a microloan program for such requirements, with funds given via local intermediaries.
It isn’t difficult to apply for a microloan. A start-up may have to prepare the business plan. Collaterals may be offered or a personal guarantee, and there may also be an option to put in some of one’s own money. If microloans aren’t the preferred choice, another way to get hold of small amounts is via crowdfunding. These are platforms where small amounts are donated by donors in lieu of promised goodies and merchandise, with no liability to pay back the amounts.
To ensure that microloans are easily available whenever required, small businesses should take several precautions. They should maintain a clean track record as far as payments are concerned, and show commitment to promises. The credit score reports should be cleaned up and kept healthy, and show that the business is healthy. Business owners should also explore their options and find out the best micro loans interest rates.
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Company Name: Funding Box Co
Contact Person: Viola D. Hayes
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Phone: (855) 572-7707
Country: United States
Website: fdbox.com