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If you’re just starting up your company, chances are you could use a little financial help. While you might not need a big loan, you may want just $10,000 or $20,000 to help get your venture off the ground. Even so, you may find that traditional banks won’t lend any amount of money to a startup without an established credit history.
This is where microloans for startups can be helpful.
Microloans are small short-term loans (up to $50,000) extended to new startups and small businesses with only a few employees. They’re often offered by nonprofit organizations that have a particular focus, such as lending to women, minorities, or other underserved entrepreneurs. Along with loans, many microlenders also offer free business mentorship, training, and assistance.
Read on to learn more about microloans for startups, including how they work, where to find them, and how to apply.
Key Points
• Microloans provide up to $50,000 for new startups and small businesses with few employees.
• Nonprofit organizations that offer these loans may also provide free business mentorship, training, and assistance programs.
• The SBA Microloan program serves small businesses that may not qualify for traditional SBA financing options.
• Microloan funds can be used for working capital, inventory, furniture, equipment, staff hiring, supplies, renovations, and legal fees.
• Application processes for microloans range from simple online forms requiring only basic information to comprehensive paperwork including financial statements.
Microloan Programs Available for Startups
You probably won’t find as many lenders offering microloans for startups as you do traditional loan lenders, since microloans are considered a niche offering. But they are out there. Here are four popular microloan lenders.
1. SBA Microlenders
The Small Business Administration (SBA) Microloan program offers funding to small businesses that may not qualify for other types of SBA loans. The funds from these loans can be used to pay for a variety of business expenses, including working capital, inventory, furniture, and equipment.
SBA microloans are funded by the SBA and administered through a network of community lenders (called intermediaries). Microloan amounts can go up to $50,000 but the average loan amount is about $13,000. The maximum repayment term allowed for an SBA microloan is seven years. Interest rates vary depending on the intermediary lender but generally range between 8% and 13%.
You can find a lender that serves your area by searching the directory on the SBA’s directory of microlenders.
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2. LiftFund
LiftFund is a nonprofit organization that offers a range of small business loans, including microloans and SBA loans to entrepreneurs. Historically,LiftFund concentrated on the following states: Alabama, Arkansas, California, Florida, Georgia, Kentucky, Louisiana, Missouri, Mississippi, New Mexico, New York, Oklahoma, South Carolina, Tennessee, and Texas. However, as of early 2026, the organization’s services are available throughout the country.
The lender specializes in providing funding opportunities for startups that may have limited credit, collateral, or experience. The only eligibility requirements it lists are that you must be at least 21 years old, your business must be in an eligible industry, and you must have a positive credit history for the last six months.
LiftFund also provides educational support for borrowers, including a digital library of resources to help you learn new skills like marketing, finance, and management.
3. Kiva U.S.
Kiva is a nonprofit peer-to-peer lender that helps new businesses in underserved communities access crowdfunded loans. It offers interest-free microloans of up to $15,000.
The process works differently than other types of small business loans. After filling out a brief application form, you’ll then have up to 15 days to invite your friends and family to lend to your business. This helps you establish the creditworthiness of your startup. Once that happens, Kiva opens the loan for the next 30 days to people who can help crowdfund the desired amount. You then have up to 36 months to repay your loan.
Kiva might be worth exploring if you need a small loan amount and have a strong community of supporters.
4. Grameen America
Grameen America is focused on helping female business owners who live below the federal poverty line get ahead. The organization provides microloans (starting at no more than $2,500), financial training, and support to members. Their microloans are also reported to Experian and Equifax to help female entrepreneurs build credit as well.
The process for applying for a Grameen America microloan is different from other lenders. You start off in a small group of women and together take a financial training program. After that, you’re eligible to receive a microloan as you continue to network and learn during weekly meetings.
Interest rates on microloans are currently 18% on a declining balance. There are no additional charges such as origination, late, or monthly fees.
Recommended: Small Business Startup Loans
Microloans for Startups: Eligibility and Requirements
Eligibility standards for microloans will vary depending on the lender. Those offering SBA loans may have more stringent credit score requirements than other microloan lenders.
If you apply for a microloan with a lender that has a particular lending focus, you may need to belong to a certain ownership category, such as women or minorities.
Many microloan lenders will evaluate your ability to repay the loan by looking at your credit score, business revenue, any other sources of income you might have, as well as the length of time you’ve been in business.
How Can I Use a Microloan for a Startup?
A microloan can generally be used for any business-related expense or as working capital. You might use the funds to hire staff, buy supplies or equipment, renovate your office, or pay for legal fees.
Read through your loan paperwork to see whether there are any parameters for what you can or cannot spend the loan funds on before you sign your loan agreement.
Recommended: Business Loans for Coffee Shops and Cafes
How to Apply for a Microloan for My Startup
Many online applications for microloans for startups are simple and ask little more than your business details, revenues, and personal information, since you may be required to provide a personal guarantee for the loan. You might hear back right away or the lender may require a few days or weeks to review your application.
If you apply for an SBA microloan through a bank or other lender, the process may require more paperwork, including financial statements. You may also have to apply in person rather than online, depending on the lender.
It’s generally a good idea to check what you’ll need to apply before you begin the process. You’ll want to gather all the details and paperwork and then dedicate some time to completing the application carefully. Otherwise, you risk not being properly prepared and your application being delayed because you’re missing some key piece of information.
Recommended: What to Know About Short-Term Business Loans
Additional Resources for Startups
Besides financing, you might welcome other forms of support for your startup. Here are some resources that offer new small businesses free assistance, including access to mentors, help creating a business plan, business workshops, and training sessions:
• Small Business Development Centers
• SCORE (originally Service Corps of Retired Executives)
• Your local Chamber of Commerce
Recommended: Rollover for Business Startups
The Takeaway
Not all businesses need a traditional bank loan, which can go as high as $5 million. If you’re starting a new, small-scale venture, you might simply need a little bit of extra capital to get your business off the ground. Finding the right lender for the size of loan you need is important, as is finding one willing to lend to a new startup.
If you’re seeking financing for your business, SoFi is here to support you. On SoFi’s marketplace, you can shop and compare financing options for your business in minutes.
FAQ
What is a microloan?
A microloan is a short-term loan for a relatively small amount, usually under $50,000, that can be used to start or grow a business.
How can I get a microloan?
Individuals, nonprofit organizations, and alternative lenders can all be microloan lenders. The purpose of these loans is often to provide entrepreneurs who otherwise wouldn’t be eligible for a business loan with access to affordable working capital.
How much is an SBA microloan?
The Small Business Administration (SBA), through intermediary lenders, offers microloans up to $50,000.
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