Funding via MicroLoans

Funding my business; all I need is a small amount to get started

By far the most popular challenge here at the Idea to Exit answer desk is funding a business, especially in the initial stages.

The first step in funding a business is to understand the basics of funding.

Those who are pursuing a small-scale, lifestyle business or bootstrapping their startup may only need a few thousand dollars to get their business started.

One path to small amounts of startup capital is a microloan.

Microloans are best known for helping people in developing economies build small businesses via loans of very small amounts, from a few dollars to a few hundred dollars, through programs from Non-Government Organizations (NGOs) such as Kiva .

However, there are also microloan programs in developed countries, including the U.S., whose purpose is to fund small business startups by making loans in amounts of a few thousand to tens of thousands of dollars.

Microloans are targeted to people who have never received a loan or who would have difficulty qualifying for a regular commercial bank loan.

Interest rates for microloans can vary, and can be higher than market rates.

Repayment of the microloan is usually required within six years.

There are often requirements for business training classes, collateral and personal guarantees for microloans used to fund a business.

The best known and most successful U.S. business microloan program is arguably the Small Business Administration (SBA) microloan program

The SBA Microloan program makes loans up to $35,000, although special requirements must be met for any amount over $20,000. The average loan amount from the program is $12,000. Since its inception in 1992, the SBA Microloan program has awarded over $112 million in more than 12,500 loans (source:

In addition to the SBA microloan program, there are a variety of microloan programs available, including:

A list of microloan organizations by state is available from the CDFI here:

Commerical lending operations may also be a source of small amounts of initial capital:

More information on startup microloans is available here:


A microloan can be just enough to get a small lifestyle business or bootstrapped company going. If you’ve exhausted your options for friends and family funding, investigate a microloan to fund your startup.

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Please note that the links and listings above are not an endorsement or guarantee of any level of service or quality of any company or organization referenced.

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