If you’ve had the idea for a small business but are wondering where to find the money you need to start your business, you might want to consider a microloan. Microloans are perfect for starting a new business. Microloan can also provide cash injection to support the growth of existing SMEs.
The term “소액대출” refers to a commercial loan that is smaller than what most banks try to process, which is often offered to borrowers and not considered by banks. This term was popular in the 1980s. Bankers are beginning to realize that by borrowing $200 from women’s cooperatives in third world countries; women can start businesses to support their families.
In the United States, microloans generally cost between $2,000 and $35,000. Most microloans in the country are provided by nonprofit organizations funded by the Small and Medium Business Administration. The SBA established the Microloan Pilot Program in 1992 and became a permanent program in 1997. To date, microloan programs have been offered to SMEs for over $112 million.
Almost any small business can apply for a microloan.
The form of the company, whether private, personal or legal, is inappropriate. Non-profit child care centers can also apply.
Borrowed funds can be used as working capital. These funds can also be used to buy consumables, consumables, accessories, equipment, machines or devices. The only limitation is that the funds cannot be used for real estate purchases or prepayments.
Credit requirements depend on lender requirements, but full credit is not required. Lenders often ask for collateral, but they are very flexible about what to take as collateral. For example, a lender may receive jewelry, office equipment, or a used car as collateral for a loan.
Interest rates vary, but tend to be slightly higher than traditional bank loans. The terms depend on the amount of the loan, the purpose of the funds, the needs of the intermediary lender and the needs of the borrower. The maximum payback period is 6 years.
One of the real benefits of microloan has nothing to do with money.
Non-profit organizations that act as intermediaries also provide substantial management training and coaching. For example, a lender may want a potential borrower to take a course and help them create a business plan.
Another advantage is speed. The process of applying for, applying for, and obtaining microloan usually takes anywhere from a few days to three weeks, depending on the amount of funds required, the procedures used by the lender, and the level of preparation of the borrower. We recommend that you gather as much documentation as possible in advance to speed up the process. The borrower should be prepared to provide tax returns, financial statements for existing businesses, bank account documents, and proof of collateral.