in the Philadelphia area. These organizations determine their own credit requirements and terms. These microloans can be used for working capital, machinery and equipment but cannot be used to pay existing debts or to purchase real estate. The average microloan is about $13,000, according to the SBA.In general, eligibility for these loans is based on what a business does to receive its income, the character of its ownership, and where the business operates.
Even though there are hoops to jump through, Guzman believes that these programs can be leveraged by most small businesses in the country and are vital now more than ever.Over the past few years we’ve scaled from a $40 billion loan portfolio to more than a trillion dollars,” said Guzman. “Much of this is related to our COVID relief programs but we’re now focused on helping underserved small businesses, like female, minority and veteran owned companies with these programs.
All of these loans are guaranteed by the U.S. government, generally have rates and fees that are comparable to non-guaranteed loans and also require lower down payments and, in some cases, no collateral. Some loans also come with continued support from SBA counselors to help start-ups.
“Small businesses generate two-thirds of net new jobs and half of the workers in the private sector,” said Guzman. “There’s still much more opportunity to grow and contribute to our global dominance in the economy and our agency is committed to meeting those capital and resource gaps and resource gaps that exist because they hold our small businesses back from reaching their full potential.”