What is an SBA Microloan Program?

Within the SBA Microloan program, the Small Business Administration provides money to intermediary nonprofit lenders. Then most lenders will then provide loans of up to $50,000 to small businesses. The nonprofit intermediaries can borrow up to $750,000 in the first year & up to $1.25 million each year after & limited to have no more than $5 million borrowed at any one time. The Microloan program has averaged about $37 million in approvals in the past five years. 

SBA Microloan Rates & Terms

The institutions partnered within the program set their own rates based on the creditworthiness of the borrower & the details of the small business. Now that being said, on average, the rates range from 8% to 13%. You can try to borrow up to $50,000 with the SBA Microloan but the average loan that’s approved is $13,000, And usually has a maximum repayment of a six-year term. 

A more detailed look at the SBA Microloan rates & terms:

A closer look at the SBA Microloan Rates

Most rates & fees for SBA microloans include: 

  • Rates: 8% to 13%
  • Fees: Depending on the lender, packaging & closing fees may vary

A closer look at the SBA Microloan Terms 

Most loan terms for an SBA microloan include:

  • Loan Amount: loans up to $50,000
  • Repayment Terms: loan terms are up to six years 
  • Repayment Cycle: most repayment cycles are monthly
  • The time it takes for funding: ranges from 30 to 90 days 

SBA Microloan Requirements

Just like other loans out there, the SBA microloan qualification varies from intermediary to intermediary. But unlike most SBA Loan type programs, the SBA leaves it up to the intermediary when it comes to the qualification process who sets all the eligibility & credit requirement decisions. 

The requirements to obtain or qualify for an SBA microloan are:

  • The minimum credit score: 640 or more
  • Minimum collateral: there may be some collateral required depending on the lender

In conclusion just like all SBA loan programs differ from each other, that’s why we suggest doing your due diligence in picking the right program that works for you. Here at Uplyft Capital we offer SBA loan options as well as others, we suggest applying to see what you’re eligible for to see if it’s a good fit for your business.