The Average Micro Business Loan Rate

The Small Business Association (SBA) has micro loan programs tailored for small business owners that find it difficult or impossible to acquire financing at reasonable rates from banks and lending institutions. The loan programs partner with the private sector to provide loans that are then assured by the SBA. The agency itself does not directly provide the money, but secures reasonable rates to micro loan borrowers.

Certified Development Company (CDC)

This loan program provides financing at a fixed rate slightly above market rate. This is a long-term loan to purchase property or equipment for operations, project expenses or expansion. The project often includes a loan that is secured from a private-sector lender who gives 50 percent of the total loan, a junior partner covers 40 percent and 10 percent of the borrowers equity.

Disaster Recovery Loans

Businesses that become victims of disasters or those falling under an acknowledged disaster area are most likely entitled for financial support. The U.S. Small Business Administration assists even those who do not own businesses. Homeowners or those renting homes, as well as those with damaged property can apply for the micro loan to facilitate recovery from the disaster.

Microloan Program

This program offers up to $50 thousand to small businesses that are qualified. These include start-ups or are newly established businesses. This program also caters for small businesses hoping to expand. The loans are facilitated through nonprofit community based lenders who make the loans available to eligible borrowers. The entire process is handled within the local area and it targets local businesses. The business must go directly to the local lender to apply for the loan. The rates are between eight and 13 percent.

Veterans

Veterans and people with disabilities are qualified for SBA loans. Veterans are also able to get unique consideration when it comes to guaranty or low interest rate loans. Special considerations include training assistance, loan management counseling and priority processing of the loan application.