If you have a small business or brand and need money, a micro loan could be a viable option for you. Micro loan benefits are ideal for the entrepreneur or small business owner- especially for those that may not quality for traditional loans and financing, such as from conventional banks. If you don’t need a loan in excess of $50,000, a micro loan could be the answer.

Is a micro loan a good option for your small business? Here is what you should know:

Micro Loans

Micro loans are often granted to start or expand your business- and are typically used for things like purchasing inventory, operation costs, payroll, and more. Microlending is similar to conventional loans in that you get a lump sum and agree to make payments with interest over time.

Eligibility

Small businesses are usually eligible for a micro loan- including businesses without much capital, or that are owned by women, minorities, or veterans, including businesses in underserved communities. The lenders vary on eligibility requirements, but they are usually more forgiving in terms of credit ratings.

Repayment

You do need to repay a micro loan- it is not a gift or a grant. The terms of repayment will vary from lender to lender, but the repayment schedule may be over a longer period, with lower payments than a loan from a conventional lender, like a bank. There are shorter-term micro loans, also, that may provide small businesses with cash flow and shorter payback terms, like six months.

You will find micro loans offered by the Small Business Administration (SBA), the U.S. Department of Agriculture, community organizations, and nonprofit groups, typically. Want to learn more about micro loans? Talk to the team at Rustwood Capital to find alternative lending solutions for your small business today.