What Is Microlending and Is It Right for My Business?
At Grand Rapids Opportunities for Women (GROW), we’re proud to be an intermediary microloan lender through the Small Business Administration (SBA). In fact, GROW is the only organization in West Michigan to offer SBA microloans! So what are microloans, and are they right for your business?
GROW’s microlending program is intended for small businesses that are struggling to secure traditional bank financing.
The program provides loans of $1,000 to $50,000, although the average loan is $21,000.
Small businesses in the nine-county West Michigan region (Allegan, Ionia, Kalamazoo, Kent, Montcalm, Muskegon, Newaygo, Ottawa, and VanBuren) are eligible to apply.
Interest rates range from 7.75% to 8.5%, depending on the loan amount.
Acceptable use of microloan proceeds includes:
- Purchase of business equipment (machinery, fixtures, or furniture)
- Purchase of supplies, materials, or inventory
- Working capital
- Leasehold improvements
Funds cannot be used for salary or owner’s draw, purchase of real estate, down payment on real estate, and payroll taxes.
Where Do I Start?
If you are interested in applying for a microloan, you’ll first want to talk with our staff, who can ask questions, explain the application process, and help you determine if a microloan is right for your business.
If you decide to apply, you’ll want to start gathering all the necessary documents, including the loan application form, personal financial statement, business plan, financial projections, bank statements, and more. A complete list is available here, on our website.
GROW staff will work with you through the application process, helping you gather the necessary documentation and directing you to useful resources, especially ones that guide you through the development of a business plan.
Though the microloan application process may seem daunting, GROW is involved with you each step of the way, providing resources and advice as you work through the process.
Our job doesn’t end when your loan is approved. We make sure that you have the information, training, and resources you need throughout the term of your loan. We want your business to be successful and will regularly follow up with you after your loan is received to see how we can best meet the needs of your business.