Microloans are typically defined as very small, short-term loans with a low-interest rate, extended to self-employed individuals, new startups with very low capital requirements, or small businesses with only a few employees.
Microlending organizations usually offer microloans between $500 and $50,000 in financing, and SBA microloans average about $13,000 each.
Microlending is also a solution for funding impoverished borrowers in underdeveloped communities and countries. In those areas, the system of lending in small amounts has successfully encouraged entrepreneurship and economic growth for developing nations. Collectively, more than 74 million borrowers worldwide have obtained over $38 million in loans from microlending institutions (according to the 2009 Microfinance Information Exchange study).
In this guide, we’re going to dive deep into the world of microlending. We’ll walk through the top microloans available, and how to qualify for them all.