SBA Microloans are loans up to $50,000 made through nonprofit CDFI intermediaries — not directly by the SBA — designed for early-stage businesses, underserved communities, and borrowers who may not qualify for conventional financing.
The SBA Microloan Program provides funding to nonprofit community-based organizations (intermediary lenders), which then lend those funds to small businesses and nonprofits at the local level. The maximum loan amount is $50,000, with the average microloan around $13,000. Terms can extend up to 6 years. Interest rates typically range from 8-13%, set by the intermediary. Unlike SBA 7(a) loans, microloans are not processed through banks — the nonprofit intermediary makes all credit decisions, sets rates within SBA guidelines, and often provides technical assistance (business planning, financial literacy training) as part of the program. This makes microloans accessible to borrowers who may lack the collateral, business history, or credit scores required by traditional lenders. Eligible uses include working capital, inventory, supplies, furniture and fixtures, machinery and equipment, and leasehold improvements. Microloans cannot be used to pay existing debts or to purchase real estate. The SBA maintains a directory of microloan intermediaries at sba.gov — programs vary significantly by geography, sector focus, and borrower requirements.
For-profit small businesses and nonprofit childcare centers that meet size standards. The intermediary sets specific credit and eligibility requirements — many focus on women, veterans, minorities, or specific regions. There is no universal minimum credit score, as intermediaries have more flexibility than banks. Business plans and technical assistance participation may be required.
The SBA maintains a locator at sba.gov/local-assistance — search by state and filter for Microloan Intermediaries. Alternatively, search for CDFI lenders through the CDFI Fund's Award Database at cdfifund.gov. Each intermediary has its own application process.
Yes. Many borrowers combine a microloan for equipment or working capital with a small business credit card, personal savings, or revenue-based financing. The technical assistance provided by microloan intermediaries can also help you prepare for larger conventional financing in the future.
$50,000 is the statutory maximum, but most intermediaries prefer loans under $25,000. The average nationally is around $13,000-$16,000. If you need more, discuss combining a microloan with other SBA programs or alternative financing.