Microloans Can Make a Macro Difference

Entrepreneur Magazine in its April issue ran an interesting article on microloans, which are loans made outside the banking system, usually over the internet (but not always), and for amounts less than $50,000.

The reason we’re writing about these loans is that many startup businesses are shut out of the banking system for lending, as the subject in Texas was. However, internationally, microloans are a big deal, because the banking infrastructure may not even exist.

The loan in the article was made by Accion Texas, but there are state branches of Accion International everywhere. We’ve had clients obtain loans through Accion, and as far as we know, they’re reputable.

You have to provide usual banking information (although a business plan suffices for tax records) and collateral, and the money isn’t cheap…the subject paid a little over 10% per annum. Collateral is required, which we find somewhat unusual in this circumstance….startups don’t have collateral for the most part.

There are also numerous microloan sources available on the internet….just Google ‘microloans’.  Kiva.org is probably the best known.

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6 Responses to Microloans Can Make a Macro Difference

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