Microlending is the practice of providing small loans to low-income people to start small businesses. Grameen Bank. founded in Bangladesh in 1983, was a pioneer in microfinance, generally providing small loans to the rural poor. While the practice has become extremely popular globally, microfinance has only recently joined the arsenal of financing options for small business owners and would-be entrepreneurs in the U.S.
Microlending in the United States got an official boost in 2009, with the passage of American Recovery and Reinvestment Act. Through ARRA, the Small Business Administration received $54 million specifically for its Microloan Program. which distributes loans under $50,000. We have recently added the locations of organizations participating in the Microloan Program to PolicyMap.
SBA microlenders are located throughout the country. Many of
them provide financing to entrepreneurs for whom traditional bank financing is not an option, especially in areas where business startup costs are prohibitively high. The map below shows the percent of “young” businesses – those that have been in operation for less than one year – and the locations of SBA microlenders in the Bay Area. While some areas have a relatively high number of startup firms, Oakland, San Jose, and parts of San Francisco have relatively few compared to all businesses.
The microfinance institutions located in these areas help local low- and moderate-income people access capital and build good credit history, with more favorable loan rates than a typical credit card. You can find locations of SBA intermediary microloan providers on PolicyMap in the Lending tab.
Category: Payday loans