SBA microloan

The SBA does not make microloans directly. It funds nonprofit, community-based intermediary lenders, which make and manage the loans. Each intermediary sets its own credit and collateral requirements.

Loans go up to $50,000, and the SBA puts the average at about $13,000. The maximum term is 7 years, and rates generally run between 8% and 13%. The money can go to working capital, inventory, supplies, furniture, fixtures, machinery or equipment, but not to paying existing debts or buying real estate.

For a newer business with a small, planned need, a microloan can cost far less than a merchant cash advance. Ask the intermediary how long its review takes, and apply before the need becomes urgent.