Small Business Micro-Loans!

Federal Government Small Business Loans!

Small Business Micro-Loan Program

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The Federal Government Small Business Micro-Loan Program

• Has loaned more than $80 million to start- up, newly established and growing small businesses?

• Has provided over 7,900 small business loans of up to $25,000 since 1993?

• Has assisted small businesses in obtaining over $24 million in loans from non-government sources?

The Small Business Micro-Loan Program

The Micro-Loan Program combines the resources of the U.S. Federal Government with those of locally based nonprofit organizations to provide small business loans to small businesses.

Under the Micro-Loan Program, the Federal Government makes funds available to qualified nonprofit organizations, which act as intermediary lenders. The intermediaries use these funds to make small business loans of up to $25,000 to new and existing small businesses.

Eligibility

Virtually any type of for-profit small business is eligible for the Micro-Loan Program. The form of the small business, whether a proprietorship, partnership or corporation, is not a determining factor. The small business must, however, meet the Federal Government's size standards at the time of application. Generally, small businesses applying for this type of loan will fall well within these standards.

Use of Loan Funds

Micro-Loan funds may be used for working capital or to purchase inventory, supplies, furniture, fixtures, machinery and/or equipment. These funds may not be used to purchase real estate, to provide a down payment on a project in excess of $25,000 in value, or, with limited exceptions, to refinance existing debts.

Loan Terms

Under the Micro-Loan Program, the maximum loan amount is $25,000. The average is around $10,000. The maximum term allowed for a loan is six years. However, loan terms vary according to the size of the loan, the planned use of funds, the requirements of the intermediary lender, and the needs of the small business borrower. Interest rates vary, depending upon the intermediary lender.

In 1998 the Federal Government

• Maintained a guaranteed loan portfolio of more than $40 billion in loans to 491,000 small businesses that otherwise would not have had such access to capital?

• Backed more than 47,100 loans totaling $10.8 billion to America’s small businesses?

• Made a record 3,456 venture capital investments worth $3.24 billion through its venture capital program?

• Provided more than 30,000 loans totaling over $728 million to disaster victims for residential, personal-property and business losses?

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