[Steven_O]

If the client has 2 yrs in business, and a FICO over 640 - he'd qualify for a microloan with the SBA. 2 yrs business tax returns, 3 recent bank statements, ID, and applications.... funded in under 10 business days. From $15k - $50k. Doesn't matter how many negative days they've had!

[Incbiz440]

Are you speaking to a specific lender or generally? Those terms aren't requirements for the Microloan program (some lenders will fund start-ups through the Microloan program, for example, and 640 isn't a floor) so I'm assuming you're referring to a specific lender's add-on reqs.

[Olderguy]

If the client has 2 yrs in business, and a FICO over 640 - he'd qualify for a microloan with the SBA. 2 yrs business tax returns, 3 recent bank statements, ID, and applications.... funded in under 10 business days. From $15k - $50k. Doesn't matter how many negative days they've had!

I refer start ups for microloans....there is no broker commission for these programs...

Minimum credit score in the 500s or higher
Time in business ranges from startup to 2 years
Located in the lender’s state
Offering collateral or personal guarantee
Business plan with two to three years of revenue projections
Being available for financial mentoring

https://www.sba.gov/funding-programs...t-microlenders

[Incbiz440]

I refer start ups for microloans....there is no broker commission for these programs...

Minimum credit score in the 500s or higher
Time in business ranges from startup to 2 years
Located in the lender’s state
Offering collateral or personal guarantee
Business plan with two to three years of revenue projections
Being available for financial mentoring

https://www.sba.gov/funding-programs...t-microlenders

Hey Steve,

SBA Microloan program uses the 7a SOP with a few programmatic carve-outs (No real estate, for example).

There's no TIB limitation, whether it's a start-up or 25 years in business.

The business does have to be in the Microlenders footprint, although that could be the same state, or just an area of a state (for example, a group of counties), or it could be a region (multi-state). It depends on the microlender's program authorization.

Collateral isn't a requirement of the program. Microlenders don't even need to file a UCC. Personal guarantee is required per SBA guidelines.

A business plan/projections is not a program requirement.

Financial mentoring is not a requirement in and of itself. Part of the SBA microloan grant to the intermediary to pay them to provide technical assistance based on time spent and billed per hour (or portions) so they have a strong incentive to keep clients on the hook for additional programming. However, the expected TA could come as assistance as part of the loan prep and application process, or it could be that clients voluntarily participate in additional workshops or programs - or it could be through required pre/post mentoring. Basically, if they touch a client that has either expressed an interest in receiving financing (pre-loan) or already has a booked loan (post-loan) receives any sort of technical assistance from the intermediary, they can log and bill against their grant for it. The goal, of course, being to exhaust their grant allocation for the current fiscal cycle and (depending on the org) justify a larger grant for the following fiscal year.

Like other SBA lenders and programs, they are free to add-on additional internal requirements which is why you have people claiming there are credit score floors or collateral requirements or other restrictions that per SOP are not required. The primary concern most intermediaries have aside from hitting their outcomes required per their grant is staying under the 15% default rate allowed to continue participating in the program.

The Microloan programs (also via USDA, ORR, and a variety of others) are nice and not well known channels for small businesses that are newer and/or in less than ideal financial positions to get access to capital at reasonable terms. Of course for brokers there's little incentive to push them in comparison to MCAs or others as there are no (that I'm aware of) intermediaries that have ISO or referral programs. I have seen brokers/consultants charge outrageous "consulting fees" for facilitating them which, I think as you mentioned before, is not allowed/still subject to fee caps per SBA guidelines.