SBA Microloan Program And How To Get Money To Start A Business. It's The King Of Microloan Programs

The SBA Microloan Program has been around since 1991 and was originally designed for women and minorities. Today applicants are applying with a variety of backgrounds and experiences. The biggest cause for the recent interest in the sba microloan program is that, according to the FDIC, "banks aren't lending".



On November 11th 2009 FDIC Chairman Sheila Bair said the FDIC's upcoming quarterly report would show that "not many large institutions are doing a very good job of lending." Instead, she said, some are taking advantage of near-zero interest rates by borrowing dollars cheaply to buy higher-yielding assets like stocks or commodities - a move known as the "carry trade."



"I don't see much money going out (from banks). I see a lot of carry trade," Bair told a banking conference in New York. "It used to be you take deposits and you lend out money. We'd like to see more of that." The SBA Microloan Program is a solution not many people are aware of. The program was deveolped for those who are considered by traditional lenders to be un-bankable.



Here are the differences between an SBA Microloan and traditional lending.



A) Funds come from Intermediaries" NOT Banks. These "Intermediaries" are non- profit organizations whor are funded directly by the government.



B) The SBA Microloan Program has a set range of funds available, the minimum is $5,000.00 and the maximum is $35,000 the average loan received is about $13,000.00. As a senior consultant for Program Funding Consultants our average client receives about $15,000.00.



C) Conventional lenders rely heavily on FICO credit scoring to screen potential borrowers. Most will not consider a borrower with a FICO score below 680. SBA microloan intermediaries are consistently making loans to businesses with FICO credit scores under 500.



D) Traditional banks generally end their services once the client is approved for the loan. Intermediaries with the SBA Microloan Program actually provide ongoing assistance throughout the life of th eloan. This assistance enables intermediaries to provide credit to start-up entrepreneurs wwho may have little or no real world business experience. The intermediaries are also able to support and respond to the needs of borrowers at the various stages of their business growth. They are able to provide pre-loan assistance as well as business development assistantce and guidance throughout the life of the loan.



It's quite simple in theory to apply for and receive an SBA Microloan Program but most people give up part way through the process. This is generally because they need to identify an intermediary, understand their criteria for applying, and develop a business plan etc. In the back of their mind many applicants are feeling it is a waste of time because they know their credit score is not the greatest or they are weak, in a traditional lenders eyes, in some way.



This is a primary reason I suggest contacting S.C.O.R.E for assistance and support or a professional firm like Program Funding Consultants. Our firm has helped hundreds through the process and we have an 80% success rate.



For those who are not successful the first time we find out why, re submit after making the enhancements or alterations and work with a client for a full 12 months if necessary and guarantee our services. No matter which option you choose if you are inerested in government money to start a business I highly suggest you consider investigating the SBA Microloan Program.