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Microloan
Also called SBA microloan, CDFI microloan.
A small business loan made through a nonprofit intermediary under the SBA microloan program, or a similar small loan from a CDFI, usually paired with technical assistance.
Drafted with AI assistance. Not yet independently checked. Nobody has verified the claims on this page against a source, so treat the figures and legal points as a starting point rather than as settled, and confirm anything you are about to act on. How we check things.
What it means
The SBA does not lend directly under this program. It lends to nonprofit intermediary lenders, which then make small loans to businesses in their service area on terms set within SBA parameters. The SBA publishes the current maximum loan size and maximum term; both are well below the 7(a) program.
Because the intermediary makes the credit decision, criteria vary widely between organisations even in the same city. Many intermediaries deliberately serve businesses that conventional underwriting rejects - startups, very small operations, owners with thin credit - and pair the loan with mandatory or optional business training. Collateral and a personal guarantee are generally required even at small loan sizes.
Community development financial institutions make comparable loans outside the SBA program, funded from their own capital and grant sources, with their own criteria.
Where this one catches people
The SBA neither makes the loan nor sets the rate here, so a decline from one intermediary says nothing about the next. Businesses often conclude they have been declined by the SBA when they have been declined by one nonprofit with a full pipeline and a specific service area.
Where you will meet this term
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Microloan — common questions
What does microloan mean?
A small business loan made through a nonprofit intermediary under the SBA microloan program, or a similar small loan from a CDFI, usually paired with technical assistance.
Where does microloan catch people out?
The SBA neither makes the loan nor sets the rate here, so a decline from one intermediary says nothing about the next. Businesses often conclude they have been declined by the SBA when they have been declined by one nonprofit with a full pipeline and a specific service area.
Is microloan the same as an interest rate?
Microloan is defined above; if you are comparing it against a rate, check whether the two measures share a time dimension before you put them side by side.
Which products does microloan apply to?
Term Loan, SBA Loan.
Is there a worked example of microloan?
Not on this entry. Where a term is arithmetic, the arithmetic is shown; this one is not primarily a calculation.
What else should I read alongside microloan?
Non-bank lender, Owner-occupied, Personal guarantee, Qualification criteria, SBA 7(a) loan.
Has this definition been checked?
Not yet. This entry is drafted and live, and the notice at the top says so. Confirm anything you are about to act on.
Is this legal advice?
No. It is a definition. What a clause does in your contract, in your state, is a question for a lawyer licensed where you are.
Can I suggest a term?
Yes — [email protected]. The glossary grows from what people are actually shown in contracts.