Following are microfinance institutions making loans in the United States. Check each to determine if you are eligible to apply for a loan. For other regions of the world, visit Mixmarket.org.
Grameen America: Grameen America's goal is to help to create a world without poverty. Toward that end they make small loans, also known as microloans, and provide other services to people living below the U.S. poverty line who want to grow their business or to start a new business. What sets these loan-makers apart from others are the qualifications needed (or not needed!) to apply. Applicants do not need to have a bank account, credit history, collateral, or guarantors.
Successful applicants must create or join a 5-member group of individuals with similar goals who will go through initial training together as well as attend weekely group meetings with a Center Manager. Upon full repayment of a loan, the borrower may apply for further loans to expand their business. To learn more, including how to apply for a microloan, visit grameenamerica.org after you finish learning more about micro financing opportunities on this page.
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Update June 2019
Microfinancing opportunities are not limited to developing countries. They are available in the United States to small businesses and are often easier to get, sometimes with lower rates, than loans from a more traditional source like a bank. The SBA is all for micro loans and recommends that you contact a micro loan provider local to where you live.They will also give you names of these micro lona providers. Find out what paperwork is required for your application. Whatever the requirements, be sure to make clear your business plan and especially your financial statements. Then you wait — the application must be ok’d by not only the micro lender but also by the SBA since they are helping to guarantee the loan. On average small businesses borrow around $13,000 in micro loans and they get interest rates ranging from 8% to 13%
December 2018: If you’re a refugee, or you know one, you may have an opportunity to get a special loan to start your own business. This is a relatively new approach being used by some refugee resettlement groups which help to resettle refugees. Apparently, though many refugees may not have means they do have the desire to start their own businesses. And they are highly motivated and they have a very low delinquency rate. This fact improves the potential program for a successful program. Some critics of the program claim that it is almost impossible for a U.S. citizen to get a $10,000 micro loan to start a new business. But as this article and Microfinancing in the United States demonstrate, that is not in fact the case. There are opportunities for eligible U.S. citizens to receive micro loans from a number of organizations.
Small business owners or those who wish to be one: you might do well to consider a microlender when looking for cash to start or grow your business. Many of these lenders are very mission focused so if you are doing something positive for your community or market audience you might have an easier time getting funds from them than from more traditional lenders. We’re not talking *millions here — micro loans are typically under or close or equal to $50,000. In addition, the lenders have staff that might be able and willing to provide some advice and mentoring about how to be successful.
News: SBA Offers Microloans The U.S. Small Business Administration is now offering a Microloan Program! It offers loans of up to $50,000 to boost working capital or to make purchases of things like inventory, furniture, supplies and more. This could be a great way for you to get a short term loan to help you start or grow your business. Loans are not made directly by the SBA but by their “designated intermediaries.” To find out more just contact the SBA office nearest you!
Kiva: Kiva is a U.S. non-profit organization with a mission to alleviate poverty – not just in developing countries but in the United States as well. They do this through small loans (microloans) to people who don't have bank accounts or financial networks they can tap to get their small business started. They use the internet and a broad network of microfinance institutions and now individuals to make loans to improve people's lives and create opportunities. On their site potential lenders who believe in this cause can donate to specific borrowers, whose story they read on the site. These donations are used to finance specific people and opportunities and are provided in no-interest loans. If you have a dream and a small business idea you should check it out and put your story out there! You don't need a credit history or financial statements, just determination and some people who are willing to support you!
ACCION USA: ACCION USA is an affiliate of the global organization ACCION International. They are a leading microfinance institution in the U.S. They describe themselves as being “committed to bringing affordable small business loans to microentrepreneurs.” Their intent is both to help grow small businesses and to strengthen the communities in which they offer assistance. Over the past 20 years, they have provided over $119 million in more than 19,000 microloans. For example, a recent write-up in the Huffington Post tells the story of an entrepreneur who happened to meet someone from Action, a micro lender. He had a side gig of running a mobile catering company and was bringing in about $20,000 to $30,000 each year. He got a loan from Action to upgrade his catering business and moved his operations from the back of his truck to a catering trailer with new equipment (which Action helped him to save money on). Within a year he had morphed into a full service restaurant with revenue over $2 million! He gives credit to the micro lender not only for helping him save money on major purchases and for giving him loans, but also for being there when he needs advice and guidance — and for teaching him how best to use his money. And he says that whenever he needs help he can call them.
Learn more, including how to apply, at ACCIONUSA.org. The website provides information in both English and Spanish.
Justine Petersen is a nonprofit located in St. Louis. It offers loans to help entrepreneurs build good credit. They also offer loans to “microenterprises”. They have made loans of more than #13 million over the past year. And they don’t stop with financial support: they also provide education and training regarding finances, budgets and more. Though they are located and concentrated in St. Louis they do have clients in other states.
Other microfinance resources: In New York City there is an organization called the Business Center for New Americans. It caters to businesses in specific industries such as restaurants, light manufacturing, retail and some other service businesses. Their loans range from $500 to $50,000. If you are a new start-up with no business history they need to see your startup budget before a loan is considered. If you’re not in New York City you might consider the Excelsior Growth Fund though they are more an online lender than a microfinancer offering training and mentoring. Do keep in mind that online lenders are an option if you don’t want to work with a bank. Their loans are available faster but are also more expensive.
Local Microfinance Organizations: In addition to some of the larger organizations discussed here, there are local groups that provide microloans and more in their state or local areas. Sometimes they may surprise you. In the Boston area, the Bentley Microfinance Group is part of Bentley University. It is mainly run by students (with help from some university staff and faculty). Their loans go from $500 to $10,000 made to those starting or running a small business. They especially focus on those who have been unable to get funding through traditional sources (like banks…). You can find some of these lesser known organizations by doing an internet search for microfinancing in your area, and/or check with a local office of the SBA for leads near you.
Opportunity Fund: The Opportunity Fund “advances the economic well-being of working people in California by helping them earn, save, and invest in their future.” Their approach, which has won several awards and shows strong results, includes financial training and education, microfinance loans, microsavings account, and affordable housing financing.
In the microfinance loan area, the Opportunity Fund works with entrepreneurs who need small capital loans to start or grow a business but are unable to get a traditional bank loan because the loan requested is too small, they have little or no credit history, they have been in business too short a time, or they can offer no collateral. To assess a potential borrower, they consider not just the numbers on a credit rating but their real potential as a successful business owner. They will meet with each candidate to review the business plan and cash flow statements and as they say on their website, “we ensure that they need a loan, are ready for it, and will be able to repay it.” They make loans as small as $500 all the way up to $100,000. (The smaller loans are intended to provide a boost to a business while they build their credit scores.) In addition to financial support, Opportunity Fund provides the coaching clients need to build their businesses. If you are a California entrepreneur, learn more at The Opportunity Fund.
The LiftFund TheLiftFund is located in San Antonio, Texas. But it doesn’t only make loans in Texas, it provides micro loans in that state plus in Georgia and Florida. Most of its loans are used for supplies and equipment. They also like to help borrowers make improvements to their credit scores so that they will have an easier time borrowing in the future. So far they have awarded more than $200 million loans to about 170,000 small U.S. businesses. Importantly, they provide loans to start-ups as well as ongoing businesses. And they also make loans for the purpose of purchasing a business.
ACCION Texas-Louisiana is a nonprofit organization that operates in Texas and Louisiana. They started in 1994 in San Antonio and have made over half a million dollars in micro-loans. Their stated mission is to “provide credit and service to small businesses that do not have access to loans from commercial sources, and to provide leadership and service to the micro-lending field on a national level.” Their business loans range from $500 to $100,000 for existing and start-up businesses, and business lines of credit typically run from $5,000 to $50,000 for established businesses with at least two years of financial history. Get more information, including how to apply for a loan at www.liftfund.com.
ACCION Texas-Louisiana is also the operator of South Texas Women's Business Center. The Center's mision is to “educate, support, and strengthen women and small business entrepreneurs in estalishing and expanding their businesses through quality business technical asistance, counseling, and advocacy.