ABSTRACT

Small Business Administration Microloan Program [April 2, 2014]   [open pdf - 0B]

"The Small Business Administration's (SBA's) Microloan program provides direct loans to qualified non-profit intermediary Microloan lenders who, in turn, provide 'microloans' of up to $50,000 to small business owners, entrepreneurs, and non-profit child care centers. It also provides marketing, management, and technical assistance to Microloan borrowers and potential borrowers. The program was authorized in 1991 as a five-year demonstration project and became operational in 1992. It was made permanent, subject to reauthorization, in 1997. The SBA's Microloan program is designed to assist women, low-income, veteran, and minority entrepreneurs and small business owners and other individuals possessing the capability to operate successful business concerns by providing them small-scale loans for working capital or the acquisition of materials, supplies, or equipment. In FY2013, Microloan intermediaries provided 4,426 Microloans amounting to $51.2 million. The average Microloan was $11,569 and had a 7.76% interest rate. Critics of the SBA's Microloan program argue that it is expensive relative to alternative programs, duplicative of the SBA's 7(a) loan guaranty program, and subject to administrative shortfalls. The program's advocates argue that it provides assistance that reaches many who otherwise would not be served by the private sector and is an important source of capital and training assistance for low-income women and minority business owners. […] H.R. 3191, the Expanding Opportunities to Underserved Businesses Act, introduced and referred to the House Committee on Small Business on September 26, 2013, is also discussed. The bill would increase the Microloan program's loan limit for borrowers from $50,000 to $75,000."

Report Number:
CRS Report for Congress, R41057
Author:
Publisher:
Date:
2014-04-02
Copyright:
Public Domain
Retrieved From:
National Agricultural Law Center: http://www.nationalaglawcenter.org/
Media Type:
application/pdf
URL:
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