SBA Microloans: Small Amounts, Non-Profit Intermediaries and Who They Suit
A small loan from a non-profit intermediary the SBA funds. The intermediary sets the terms and decides.
Soft credit pull only, no obligation
Rates, factor rates, fees and terms are set by the funding provider that makes your offer and are disclosed in that provider's agreement. Figures on this page are illustrative ranges from providers in our network, not offers. On a microloan the rate, fees and term are set by the non-profit intermediary that makes the loan and are disclosed in that intermediary's agreement.
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At a glance
| Program maximum | $50,000, an SBA rule, not a Capital Gurus figure |
|---|---|
| Term length | Up to 7 years under program rules; intermediaries commonly write shorter |
| Collateral and guarantee | Generally collateral where it exists plus the owner's personal guarantee |
| Cost expressed as | An interest rate set by the intermediary, plus its own fees, disclosed in the loan agreement |
| Who lends and decides | A non-profit intermediary the SBA funds, not a bank and not the SBA |
|---|---|
| Capital Gurus' role | Guidance only. Capital Gurus is not an SBA lender; SBA loans are made by SBA-participating lenders. We are not an SBA microloan intermediary either. |
No microloan rate appears on this page: the intermediary quotes it once it holds your application.
What is an SBA microloan?
Definition
An SBA microloan is a loan of up to $50,000 made by a non-profit, community-based intermediary that borrows from the SBA in order to lend, per the SBA's microloan page.
No bank sits in the structure, and there is no SBA credit review of your file. The other programs are on our SBA loans page.
Who does what?
The SBA lends to the intermediary and sets the rules. The intermediary lends to you, decides and services the loan.
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The SBA publishes its list of intermediaries at sba.gov. Capital Gurus is not affiliated with the U.S. Small Business Administration.
Where can the money go?
Working capital, inventory, supplies, furniture, fixtures, machinery and equipment.
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Two uses sit outside the program: paying off existing debt and buying real estate, whatever the amount.
What will the intermediary ask?
A business plan, collateral where it exists, a personal guarantee, and often business training.
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Small does not mean unsecured: read what a personal guarantee means before you sign. Training is a real obligation on your diary.
How much a microloan can be, and over how long
The maximum above is an SBA rule, not our figure, and the intermediary sizes each loan to the plan and the cash flow behind it.
What the intermediary weighs
- The plan
- Cash flow against the payment
- The owner's own money in the business
- Credit history
What it can pay for
Eligible
Working capital, inventory, supplies, fixtures, machinery and equipment.
Excluded
Paying off existing debt and buying real estate, under the program rules.
Program rules allow terms up to 7 years, set by the intermediary.
Two habits that help a first application
Call the intermediary for your area before you write the plan.
Read the personal guarantee before the training, not after.
One application, and an advisor tells you which route fits before you apply anywhere.
How the cost of a microloan is expressed
The intermediary sets the interest rate and discloses it, with its fees, in the loan agreement.
A rate set by the intermediary
Within its own and the program's limits.
Quoted once it holds your applicationA term sized to cash flow
Program rules allow up to 7 years.
A longer term lowers the payment
On top of the rate, disclosed by the intermediary
- The intermediary's own fees
- Any collateral costs
SBA loan rates explains how SBA pricing works on the other programs.
No microloan rate or payment appears on this page: the intermediary quotes those once it holds your application.
See how to applyWhy the term matters more than the rate
On a small amount, spreading it over several years is what turns the payment into one a new business can carry. That is the design of the program.
Who qualifies for an SBA microloan
| For-profit | a business, or a credible plan to be one |
|---|---|
| Local | inside the area the intermediary serves |
| Own money | some of the owner's money in the business |
There is no credit-elsewhere test, but capacity varies: some intermediaries have no money to lend in a given month.
We publish no microloan credit-score, revenue or trading-history minimum: each intermediary sets its own.
What the intermediary reads
Mission-driven, and often wider than a bank's test.
A clear use of funds.
A plan for the payment.
Finances in order.
Training completed.
How to get an SBA microloan
You apply directly to one intermediary, not through Capital Gurus. Expect weeks, sometimes longer.
What the intermediary usually asks for
- A short business plan and use of funds
- Personal and business financial statements
- Tax returns, where the business has filed them
- Business bank statements
Depending on the intermediary
- Details of any collateral
- Proof of required training
Two questions for the intermediary
Does it cover your area, and does it have money to lend this month? To check first whether this is your program, talk to a funding advisor.
Check the program fits
Under $50,000, an eligible use, and no property or refinancing.
Find the intermediary for your area
The SBA publishes the list at sba.gov. Ask what it is funding right now.
Prepare the plan and the training
Use of funds, how the payment gets made, and any required training.
The intermediary decides and funds
It underwrites, sets the rate, closes and services the loan.
When a microloan is the right tool, and when it is not
A modest, tangible purchase in a business a bank cannot read yet.
| Ask yourself | Good use | Not for |
|---|---|---|
| Is it under the cap? |
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| Is it property or old debt? |
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| Is the business young? |
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Is it under the cap?
- Stock, tools or a first set of machines.
Is it property or old debt?
- Working capital, supplies or fixtures.
Is the business young?
- A first year with a clear plan.
Better fit elsewhere
- A vehicle, oven or machineUse insteadEquipment financingdecided largely on the asset
- A business in its first yearsUse insteadStartup business financingwhat is open to a young business
Capital Gurus is not an SBA lender; SBA loans are made by SBA-participating lenders.
Compare a microloan with the other SBA programs
A microloan is the smallest SBA program and the only one made by a non-profit intermediary. When the amount is larger, or the need is property, another program fits.
- SBA loans overview
All four programs side by side, and what an SBA-participating lender checks.
- SBA 7(a) loans
Larger working capital, equipment, buying a business or eligible refinancing.
- SBA 504 loans
Owner-occupied property and heavy equipment, which a microloan cannot fund.
- SBA Express loans
A smaller 7(a) variant for amounts above the microloan cap, decided by a lender.
Related financing
- business term loans
A fixed amount, repaid on a schedule you can put in the budget.
- business line of credit
Standby capital you draw only when you need it, then draw again.
SBA microloan questions
In short
An SBA microloan is a loan of up to $50,000 made by a non-profit intermediary that the SBA funds, not by a bank and not by the SBA. The intermediary sets the interest rate and fees and decides, often after required training. Capital Gurus is not an SBA lender; SBA loans are made by SBA-participating lenders. Expect weeks.
What is an SBA microloan?
A microloan is a loan of up to $50,000 made by a non-profit community-based intermediary that borrows from the SBA to fund it. The SBA does not lend to you and no bank is involved. The intermediary underwrites, decides, sets the rate, closes and services the loan on its own criteria.
How much can I get, and for how long?
The program maximum is $50,000, and most microloans are considerably smaller than that. Programme rules allow terms up to 7 years, and intermediaries commonly write shorter ones. The amount and term you are offered are the intermediary's decision, based on what it lends and what your cash flow supports.
Who decides, and what do they look at?
The intermediary decides. These are mission-driven community lenders, so they look at the plan, the owner, the cash flow and the local picture as well as the credit file, and they often weigh factors a bank would not. They are also small, so capacity and timing vary from one intermediary to the next.
Do I need collateral and a personal guarantee?
Expect both. Intermediaries generally take whatever collateral exists and ask the owner to guarantee the loan personally, even on small amounts. A guarantee means the obligation follows you if the business cannot pay. Read what you sign, and read it before the training sessions rather than after.
Can a business under a year old get a microloan?
It is one of the few SBA routes where a young business is a normal applicant rather than an exception, which is the point of the program. You will still need a plan, a clear use of funds, clean personal finances and usually some of your own money in the business. Being young is not a disqualification; being unprepared is.
Does Capital Gurus arrange SBA microloans?
Capital Gurus is not an SBA lender; SBA loans are made by SBA-participating lenders. We are not an SBA intermediary either, and a microloan is applied for directly with the intermediary that covers your area. We will tell you plainly if this is your program and point you at the SBA's own list of intermediaries. Where it is not, we will say which product in our network is.
What if there is no intermediary near me, or I need the money sooner?
Then a microloan is not the route. Intermediaries cover defined areas and some have no capacity to lend in a given month. Providers in our network consider financing from $10K to $10M and some give same-day decisions, subject to provider approval and document turnaround. Cost per dollar borrowed is higher than a microloan's, and that is the trade.
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