The SBA micro-loan program makes funding available to intermediary, non-profit lenders who, in turn, make micro loans available to small business borrowers. The maximum loan amount is $50,000, with a maximum term of 6 years at varying rates between 8 and 13 percent depending on intermediary costs. Funds from a microloan can be used for working capital and purchase of assets, but cannot be used to pay existing debts or for real estate purchases. In addition, the intermediary lenders of microloans provide educational and training assistance to borrowers, and in some cases participation in training education is required.
Lending and credit requirements vary by intermediary, though typically collateral and personal guarantee for the owner is required.