Small Business Administration Microloan Programs

Small Business Administration Microloan Programs. Congressional Research Service, Library of Congress. Robert J. Dilger. February 12, 2013.

The Small Business Administration’s (SBA’s) Microloan program provides direct loans to qualified non-profit intermediary Microloan lenders who, in turn, provide “microloans” of up to $50,000 to small business owners, entrepreneurs, and non-profit child care centers. It also provides marketing, management, and technical assistance to Microloan borrowers and potential borrowers. The program was authorized in 1991 as a five-year demonstration project and became operational in 1992. It was made permanent, subject to reauthorization, in 1997. The SBA’s Microloan program is designed to assist women, low-income, veteran, and minority entrepreneurs and small business owners and other individuals possessing the capability to operate successful business concerns by providing them small-scale loans for working capital or the acquisition of materials, supplies, or equipment. In FY2012, Microloan intermediaries provided 3,973 Microloans amounting to $44.7 million. The average Microloan was $11,254 and had a 8.18% interest rate.

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