SBA Microloans: What They Are and How to Get One

What are SBA Microloans

Among all of the small business loans that are available, one of the most popular for expanding businesses is the U.S. Small Business Administration (SBA) Microloan. With loans typically ranging from $599 to $50,000, the SBA Microloan is the ideal loan for businesses that need modest funding to grow.

In this brief article, Excelsior Growth Fund (EGF) explains what SBA Microloans are, why they work so well for many small businesses and how to get one.

What are SBA Microloans?

The Microloan program is a special SBA program in which the lenders, including credit unions and Community Development Financial Institutions (CDFIs) like EGF, are driven by a goal to help business owners who may not qualify for traditional bank loans and thereby support local economic development, particularly in underserved communities.

SBA Microloans are perfect for many small businesses that need funds for relatively low expansion expenses. These can include but aren’t limited to office furnishings, computer hardware and software, internet and phone services, inventory or production materials, working capital and freelance or outsourced services.

Who is eligible for an SBA Microloan?

To be eligible for the SBA Microloan program, businesses must meet the SBA’s basic criteria for small businesses, including that they’re for-profit and based in the U.S. In addition, each lender may have their own criteria that they require or prefer. However, even with this additional criteria, they typically have more flexibility than traditional banks, so they’re able to help many small business owners who may not meet their banks’ lending criteria.

For example, among EGF’s preferred criteria are qualifications that include businesses with two years of history, two or more employees, an average credit score of 640 or higher, and annual revenues of at least $120,000, along with some additional criteria. However, EGF may support businesses that demonstrate excellent potential but that don’t meet all the criteria yet. 

Where can you get an SBA Microloan?

The SBA has many preapproved lenders that are part of the Microloan program, and you can find lenders near you by going to the SBA lender match site .

In addition, EGF is a CDFI that’s approved for the Microloan program. EGF offers SBA Microloans ranging from $10,000 to $50,000, with a quick and easy online application that can usually be completed in 20 minutes or less. Once you have submitted your application, along with your business’s financials and personal tax returns, you’ll receive a decision in two business days. If you’re approved, you’ll receive funding  within five business days. In addition, our SBA Microloans come with competitive interest rates and affordable monthly payments.

Additional benefits of working with EGF and other CDFIs

In addition to small business loans, CDFIs like EGF make business assistance and training available to borrowers. This means that small business owners have access to free training in financial management, business-growth strategies and marketing consulting, among others. These services are free to EGF clients because our purpose is to help you grow your business, achieve success and become a positive economic force in your community.