While businesses have numerous options for business loans, the perks of microloan financing appeal to many entrepreneurs. Whether you want to start or grow your business, microloans provide funding to meet daily expenses, purchase assets, upgrade equipment, and increase inventory. Here are four perks of microloan financing so you leverage it for your small business or startup.
Lower Interest Rates
Microloan financing is lucrative because it offers lower interest rates than other financing options. For instance, SBA microlenders’ interests range from 6% to 9%, and businesses can qualify for up to $50,000. As such, microloans are suitable for startups looking for affordable financing options. Low-interest rates make loan repayment manageable and less burdensome.
Flexible Eligibility Criteria
Among the biggest perks of microloan financing are their lenient eligibility requirements, thus making funding available for businesses that don’t qualify for traditional financing. Microloans can be helpful for startups and enterprises with limited or poor credit histories. Also, they are an excellent option for financially underserved entrepreneurs from minority groups, low-income households, and underserved communities.
Diverse Lender Options
When considering a microloan, businesses have a broad range of options to meet their financing needs. They can get a microloan from SBA intermediaries, nonprofits, alternative lenders, and community organizations. Each microlender has unique repayment terms, from interest rates to loan amounts and terms. As a result, a business settles for the microlender with the most favorable terms and suits its business needs.
Easier to Obtain
Microloans are easy to obtain than traditional loans in two ways. First, many businesses qualify for these loans regardless of their years in business and creditworthiness. Second, applying for a microloan is quick and easy. Depending on the lender, you can get your loan approved in a few days or weeks. This is much faster than traditional loans, which may take months. Fast approvals can make a massive difference for enterprises looking for emergency funding.
From lenient requirement criteria to low interest and fast financing, there are many perks of microloan financing. Microloans are a good option for startups and small businesses with less-than-perfect credit scores. If you are considering a microloan for your enterprise, contact Hemingway Financial Group. We finance your business for greater success and returns.