How to Apply for a Micro Business Loan

The micro business loan program fits the needs of entrepreneurs who only need a small amount of financing and cannot qualify for traditional bank loans. This program provides small loans to start-up, home-based or micro-businesses. Loan amounts are available from $1,000 up to $35,000 and must be repaid within six years.

Difficulty: Moderately Challenging

Instructions

1. Locate a Microlender
   
   Microlenders are located in most cities around the United States. You can start by contacting your local economic development agency which is usually connected to your state and local government. The U.S. Small Business Administration can also be a good source to use in locating a microlender.

2. Gather your Collateral
   
   The microlender establishes its own lending criteria. Some may require collateral but not likely. A credit report is pulled on the small business owner; however, it is not the only requirement when considering approval. Bad credit business owners are often approved with a solid business plan and some business training.

3. Prepare Your Business Plan
   
   If you do not already have a business plan, the microlender will usually provide small business training and technical assistance to the borrower and help you prepare a business plan. Small business owners may be required to complete a series of training or a business planning courses as a precondition before the loan is approved and funded.

4. Correct Errors in your Credit Report
   
   While microloans are not solely dependent upon your credit history, you may want to make sure your credit report looks as good as possible. Correcting errors and inaccurate information before you submit your application can save time during the approval process. Microloans are often approved regardless of past credit problems if you can prove those problems have been resolved.

5. Comply with the Application Requirements
   
   Microloans are available for start-up businesses, home-based businesses, existing and growing businesses. You will need to complete the application, attach your business plan and give authorization for your credit report to be retrieved.

6. Where to Apply
   
   Small business owners should apply for a microloan in their community. The difficulty with microloans is that a microlender may not be available in all communities. If this is the case for you, research your State and local government agencies as an alternative as some offer small business loans similar to the microloan program. One nationwide microlender with an online application is www.accionusa.org. For a state by state listing of other Microlenders visit the Resource box below.

Resources

• www.rebuildcreditscores.com/Micro_Business_Loans.html

[babyBANGS]

on 1/5/2009 THANX! i APPLYED FOR ONE THIS MORNING! :-)

wISH ME LUCK!

[Psalmist4M]

on 7/13/2008 good article, thanks for the info. cherylgoff.com