Microloans continue to contribute to the growth and expansion of Main Street businesses (also known as microenterprises). Gone are the days when obtaining capital was nearly impossible to do for microenterprises, especially those owned and operated by minorities, low income and/or sub prime borrowers. Microloans specifically exist to serve that market of small business owners. If you’re having a hard time acquiring other forms of capital (such as unsecured business loans or lines of credit), microloans may be an option better suited for you. According to the most recent U.S. Microenterprise Census Highlights:
- 357,958 individuals were assisted by microenterprise development organizations and 58,060 were approved for microloans up to $50,000 in 2013.
- Approximately 361.7 million in microloans were dispersed in 2013.
- The number of individuals assisted by microenterprise development organizations increased by 9% from 2012 to 2013.
- 51% of business owners served were Hispanic, 26% were White/Caucasian, 16% were Black/African American, 3% were Asian/Pacific Islander, 1% were Native American, another 1% were Mixed Race, and the final 1% fell under the category of “other”.
Why This is Important for Main Street Businesses
Main Street businesses are the smallest businesses in the United States, (i.e. the microenterprises). They consist of the mom and pop shops and local retail stores (etc) that employ the most people in our local communities. Providing the necessary resources to the owners of these businesses is the key to the continued growth and sustainability of our local economies. Unfortunately, not all Main Street business owners have the best credit, which can get in the way of you qualifying for traditional types of financing such as unsecured business loans and lines of credit. That’s where microloans come in. Microloan programs give Main Street business owners, with less than perfect credit, the opportunity to acquire capital (when all else fails).
What to Do if You’re a Main Street Business Owner in Need of Help
If your own a Main Street business/microenterprise, and you’re in need of help, I suggest you connect with your local SBA district office so they can point you in the right direction. They will most likely give you the contact information for your local microenterprise development organization. These organizations offer the following services to help you grow and sustain your small business:
- Technical Assistance – Business plan development and loan package assembly and submission to microfinancing institutions (such as Accion).
- Microloan Financing – Loans up to $50,000 or more (depending on your personal credit history — lower credit scores are often accepted).
- Workshops & Courses – These may cover how to start and grow your business and/or build your personal or business credit history.