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SBA Microloan

With regards to qualifying for a SBA Microloan, nearly every for-profit business falls under the types of small businesses who can qualify. SBA Microloans are available for both new start-ups, as well as existing businesses looking to expand. Information about the other loan programs can be found on the SBA Loans home page.

SBA Microloans are different than other types of Small Business Administration loans, The SBA Microloans (Micro Loans) are made obtainable to a variety forms of small businesses including sole proprietorship, small business partnership and if your business is a corporation.

The SBA updates the size restrictions for Microloans (Micro Loans) according to the economical conditions at the time and the funding needs of the borrower. The size restrictions will be determined at the time of the application submission for approval.

SBA Microloan Money | Are There Restrictions?

Yes, there are guidelines and restrictions in place for uses of the SBA-associated Microloan (Micro Loan) money, such as what it can and cannot be used for. While nearly all business purposed expenses and purchases qualify for use with the Microloan funds, there are two main areas which the money cannot be used.

  1. First, If you would like to use Microloan (Micro-Loan) money to pay off existing debts, or use the money to consolidate current debts, you should pursue another avenue for funding.  Microloan (Micro Loan) money cannot be used for any sort of debt repayment.
  2. Second, you cannot use this money to purchase any real estate, even if it is purchasing property for the exclusive use of the business.

SBA Microloan (Micro Loan) | Do I Need Collateral?

Because the SBA uses a intermediary lender the mistake could be made that you will not require any collateral. this is not true. the borrower will need some sort of collateral. Most loans other than a credit card will need collateral even if you do a conventional loan through your bank.

You can normally use existing assets and equipment that the business currently owns for collateral to secure a Microloan. Take your time to review your asset holdings. With a little thought and an inventory of everything that can be converted into a legitimate market value so that it can be presented to the lender for a successful funding.

Also, borrowers of this loan will require signing a personal guarantee in order to obtain an SBA Microloan.

Some small businesses do not qualify for SBA Microloans. The following will fall into the category:

  • Gaming or gambling websites or casinos
  • Religious concerns that are non profit
  • Not for profit charities
  • If your business is a pyramid scheme
  • You are a speculator
  • Investments in real estate

If you have These include gambling and gaming businesses, charitable, religious and non-profit businesses (Child care business that are non profit), real estate investment, pyramid, and speculative businesses. The SBA can provide you with full details of what businesses are ineligible if you think your business might fall into one of the categories.

Read more articles about the SBA Microloan program:

SBA Microloan Program

Requirements For A SBA Microloan

SBA Microloan Collateral

SBA Microloans Terms

What is a Microloan

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