Difference Between Small Business Loans & Microbusiness Loans

Have you ever taken a moment to review the Small Business Size Standards provided by the U.S. Small Business Administration (SBA)? You’ll find that the standards are a little different depending on the business’ industry, but that’s not the most surprising thing you’ll discover. If you’re like most people, you’ll be most surprised to learn that, for the most part, a small business is one that employs less than 500-1,000 employees. Doesn’t that seem like a shockingly high number, especially when the corner store you dream of owning will be run by your small family of four? How does the SBA treat your small business differently from one that employs 250 people? In reality, it doesn’t.

The SBA does not make it easy to receive a loan. The application is long and arduous; paperwork is kept for months before anyone comes to a decision. If you have a great business record, you may be eligible to loans from $50,000 and up, but in many cases you’ll have to have 1 to 2 years of proven revenue and at least 10 employees to qualify. In short, these strict rules and standards make it impossible for someone who may, like you, dream of growing a small corner store to pay your family’s expenses and put food on the table.

This is why Our MicroLending believes that it is important to separate the microbusiness from the small business. According to the Association for Enterprise Opportunity, The Voice of Microbusiness (AEO), 9 out of 10 businesses in the U.S. are microbusinesses. The AEO defines a microbusiness as one with five or fewer employees. This is a very distinct difference from the “small” business size! And it’s these microbusinesses that the AEO is lobbying for, and that Our MicroLending focuses on helping with our microbusiness loans.

A microbusiness loan allows these smaller enterprises the opportunity to get the money they need to grow their business. They don’t require extensive credit checks or background information, and because the lender, like Our MicroLending, is invested in the success of the borrower, the transaction is much more personal and designed to help the borrower be successful in his or her business ventures. Microloans can range from $1,500 – $20,000 in most cases, with some special cases receiving up to $50,000.

Small Business Loans & Microbusiness Loans

A microloan analysis takes just 24 hours, so the borrower can receive their money as quickly as possible, often is as little as 72 hours. For a microbusiness owner who is needs capital right away to help their business grow, this is a breath of fresh air from what major financial institutions can make them go through. If you’d like to know more about what we do for microbusinesses, or you’d like to request a loan, please give Our MicroLending a call today.

Difference Between Small Business Loans & Microbusiness Loans