The SBA Microloan Program was authorized in 1991 (PL 102-140) to provide small loans and technical assistance to businesses that conventional lenders are unable to finance for a variety of reasons, including the lack of sufficient collateral or business experience.
Working through a network of community-based intermediary lenders, the SBA Microloan Program is able to finance and support new and emerging businesses in our communities and eventually move these businesses into the economic mainstream as bankable ventures.
While the official SBA definition of a “small business” is one with fewer than 500 employees, more than 80 percent of all businesses in this country employ 10 or fewer employees. These businesses have always been a critical source of employment and new jobs—especially during a recession. The Microloan Program is especially helpful to these smaller businesses.
Since the program was launched in 1991, intermediary lenders have made more than $722 million in loans to small businesses that created or retained some 212,000 jobs. Further, according to SBA’s Fiscal Year 2015 (FY14) Financial Report, the cumulative default rate to the SBA on the Microloan Program is just 2.36 percent.
Today, there are currently 152 intermediary lenders participating in the program in 45 states, plus Puerto Rico and the District of Columbia. In FY 2015 alone, Intermediaries made nearly 3,700 loans—totaling more than $52 million—to small businesses supporting 16,600 jobs.
For more information on the SBA Microloan Program, visit the U.S. Small Business Administration.
Visit SBA’s website…