The Ultimate Guide to Microloans

Aug 28, 2019

The Ultimate Guide to Microloans

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The only way to start the ultimate guide to microloans is to tell you that a microloan is exactly what it sounds like: a very small loan. Not quite as small as the $5 your best friend spotted you for gas last week, but still very small.

Microloans are typically used to help entrepreneurs in difficult circumstances or struggling communities. These circumstances include operating a business that is very young, having bad business credit, and dealing with structural roadblocks like national poverty or prejudice toward minority groups.

United States entrepreneurs receive a tiny percentage of the total microloans in the world, but that percentage makes a big difference.

Typical Microloan Amounts

Microloans usually range between $500 and $100,000, with the average microloan in the US totaling about $13,000. These loans are incredibly helpful to women and minority business owners. If you feel like you’ve had a hard time finding a small business loan, you’re not alone.

Despite making up more than 1/4 of all businesses in America, minority-ownd businesses are 3 times more likely to be denied for loans than businesses owned by whites. That’s where microloans enter the picture.

These small but powerful loans are one solution to racial and gender equality issues in small business and a way to combat economic inefficiencies all over the world.

How to Use This Guide

The upcoming sections will describe the origin and impact of microlending in the US and across the globe. They will also give information on how your business can secure a microloan from the SBA and other nontraditional lending sources like marketplace lenders.

Feel free to skip to any section that interests you as the sections are largely self-contained. Or, if you’re in the mood for a nice read, grab your favorite drink, sit in a comfy chair, and get ready for a fascinating look into the origin of the microloan.

About the Author

Andrew Mosteller

Andrew Mosteller

Andrew Mosteller is a freelance writer and regular contributor to Lendio News. His upbringing in an entrepreneurial family nurtured a passion for small business at a young age. Andrew's father, an equity fund manager, taught him the ins and outs of investment financing. Now, Andrew spends his time writing copy for business owners, helping them expand and advertise their unique brands. He's also studying Strategic Communications at the University of Utah. When Andrew's fingers aren't glued to the keyboard, he spends his time reading, podcasting, composing music, and bombing down the ski slopes.

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