Business Micro Loans A Great Option For Small Biz Owners

Online, June 30, 2011 (Newswire.com) - A business micro loan is a loan designed for a startup or to develop a small company. This particular loan is available through the Small Business Administration.

Local nonprofit lenders who offer such business loans set their own terms and interest rates, and also offer business micro loans. These lenders operate somewhat independently of federal oversight, and usually require more collateral and the personal guarantee of the owner. The collateral is usually the equipment or other assets of the company.

The loans are intended to be used to get a new company up and running - providing things like working capital, equipment, furniture, inventory and supplies. It is not intended to be used as a down payment for real estate. Micro loans have a maximum of $35,000, with the average amount being around $10,000 to $11,000.

Although the fees and interest rates can vary, the SBA requires that a micro loan have a maximum term of six years. But this will be set by the lender, and can be for a shorter period of time, depending on the financed amount and other terms established during the agreement.

If you are a new business owner and are looking for funding, but are unsure how to manage the funds once you get them, there is training available through the SBA and other organizations. The training includes management of finances, capital, inventory, advertising, customer service and marketing. The training is designed to equip a new business owner with the needed skills to become not only a business leader, but a community leader as well.

Business micro loans are an excellent way for entrepreneurs to start their companies from scratch, but these men and women must be willing to prove themselves, showing they have good business leadership skills, and that they are willing to meet the SBA's guidelines to prove stability.