Small Business Reading Room

Friday, June 19, 2015

Microloan Program Expands Access, Increases Opportunities for Entrepreneurs

The U.S. Small Business Administration (SBA) this week published a final rule for the Microloan Program, providing more flexibility to SBA non-profit intermediaries, expanding the pool of microloan recipients, and increasing accessibility in SBA programs. The change will make small businesses, with an owner who is currently on probation or parole, eligible for microloan programs, providing individuals with the highest barriers to traditional employment a means to reenter the workforce.

SBA’s Microloan Program, which is focused on startups, minority and other underserved markets, provides loans up to $50,000 to help small businesses and certain not-for-profit childcare centers start up and expand. Microloans play an important role in distressed communities where access to conventional lending remains a challenge. The average microloan size is approximately $13,000.

“Microloans are vital to small business development,” said SBA Mid-Atlantic Regional Administrator Natalia Olson-Urtecho. “Many of the businesses we see starting today just need a little boost of capital to get on their way. Providing additional access to those on probation or on parole ensures all have a chance to start over again and be the productive members of society they want to be.”

This action supports the goals of the Federal Reentry Council to reduce barriers to employment and reduce recidivism. It also implements key recommendations of the President’s My Brother’s Keeper Initiative to increase access to jobs, reduce violence, and provide a second chance.

Other changes to the program also promote increased microloan activity and provide intermediaries with additional flexibility in how they manage program funds. More information about the microloan program can be found at www.sba.gov/microloans.

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Small Business Reading Room

Microloan Program Expands Access, Increases Opportunities for Entrepreneurs

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