Eligibility for SBA Microloans
Eligibility for SBA Microloans
The SBA Microloan Program is intended to give financial assistance to intermediary nonprofit lenders. These lenders offer business loans of up to $50,000 to small businesses and startups which are run by veterans, minorities, or women. The SBA does not scrutinize Microloan applications for their credit status. They set certain basic parameters for the SBA loan requirements. Further, the intermediary will also have their own set of rules and qualification criteria. Below are the basic needs to qualify for the SBA Microloans.
- For-profit small business: You need to own a for-profit small business to qualify. Note that non-profit childcare centers are also eligible for this type of loans.
- Average credit: Microlenders do not ask for excellent credit. The average minimum credit score required by the intermediaries is 575. Microlenders usually receive requests from borrowers with a limited credit history, have unimpressive credit scores, or are rebuilding their credit. Nevertheless, your recent credit history such as foreclosures or bankruptcies might prove to be hurdles in qualifying for this type of loan.
In case your credit score is low, you need to prove your worth in other areas of business such as revenue. You could also provide valuable collateral to acquire this loan.
