Up-Market Microlenders in the USA Small Businesses Can Rely on
Microfinance isn’t a service designed solely for the purpose of supporting low-income or unemployed people. On the contrary, it is an effective strategy to fund small businesses, solo entrepreneurs, and startups. Traditional loans typically let you borrow bigger sums but are more demanding too. Microloans stand out with flexible terms of how to use the funds and more generous eligibility criteria. To decide on the best service provider, keep on reading this guide!
The Advantages and Disadvantages of Going for Microloans
Before stepping into the realm of top-notch microlending service providers, it is crucial to understand whether they are truly the right fit for your case. Depending on your needs, you may benefit more from traditional small business loans, personal loans, or business credit cards.
Pros | Cons |
Even if you aren’t eligible for receiving a traditional loan, it doesn’t mean you are disqualified from the microlending race. Terms and conditions are more applicant-friendly. | The standard in-market limit for a microloan is $50,000, but it may be less than that. If you are interested in financing a large project, traditional loans may work better. |
The problem with traditional loans is that the sums to borrow may simply be overwhelming and unnecessary. | Collateral requirements for secured microloans may cost you personal assets and your business if you bite more than you can chew and fail to repay the loan. |
The Best Microlenders Small Businesses Can Work with
Choosing top-notch dealers will surely secure the deal and help you gain additional benefits:
no or minimum credit score requirements;
opportunities for financial training and coaching;
a wide range of customized loan products with consistent community support;
flexible terms;
lower interest terms compared to traditional loans, including interest-free offers;
a quick application process;
small business advisory services, and more.
In the table below, you will find the top seven microlending service providers to conduct thorough research on.
Microlender | Special Features | Min and Max Loan Amounts | Interest Rates |
SBA | Tailored financial solutions and business training | Up to $50,000 | 8% - 13% |
Justine Petersen | Affordable interest rates and credit-building loans | $500 - $150,000 | 7% - 18% |
LiftFund | A wide selection of loan products | $500 - $1,000,000 | 5% - 18% |
Grameen America | Peer support groups | $1,500 - $15,000 | 15%-18% |
Kiva | 0% interest loans and no credit score for applicants to succeed | $25 - $15,000 | 0% |
Pursuit | Customized and versatile microloan solutions with no prepayment penalties | $10,000 - $50,000 | 9.125% |
Accion | Quick application procedure with flexible terms | $300 - $250,000 | 7% - 15% |
SBA
A typical requirement is a credit score of no less than 620. Other conditions depend on the target lender under the major SBA microloan program’s roof. The maximum repayment term possible is six years. You can spend it on improving your business equipment, machinery, furniture, supplies, inventory, or working capital. It won’t let you comply with other loan terms, though. To begin, contact its intermediary.
Justine Petersen
It is an excellent opportunity for those looking for secured credit cards and credit-building loan solutions. It offers products that are guaranteed and non-backed-up by SBA.
LiftFund
Its operational range includes fifteen states in the USA, including Texas and Florida. While it’s not as large as some other organizations on the list, it supports mammoth maximum microloan limits for interested parties.
Grameen America
Its microlending program is gradually expanding. Although it is a relatively new offer (launched in 2008) in the market, it has issued over $2 billion in loans. One of the biggest groups of beneficiaries consists of female entrepreneurs. You can find its services in twenty-three cities in the USA, mainly in Connecticut.
Kiva
With 4.7 points at Trustpilot, it is a trustworthy brand with a seamless and quick microloan application and approval process. You've come to the right place if you want the target provider to walk you through every crucial step. It is headquartered in San Francisco and has been operating since 2005.
Pursuit
That’s another microlender with an impressive history in the market — over sixty-five years of beneficial deals and financial help globally. It has more than fifteen ready-made programs for small businesses, letting you reach some of the best deals under the SBA Microloan Program such as SBA 7(a) and SBA 504.
Accion
Over the years, this company has assisted over 350 million customers worldwide. Its services are accessible in seventy-five countries and come from more than two hundred and thirty-five financial partners of the team. It has been present for over sixty years and is expected to achieve even more in the future. It’s probably one of the most reliable microlenders out there.
Final Thoughts
With preliminary market research, you can expect the best overall microlenders to support your business. Whether you want to improve your credit score or accelerate your company’s growth, this guide’s top 7 service providers will make a difference. Please note that each of them offers unique plans. So it will be a worthwhile strategy to consult with their representatives for more personalized details.
