Are you a small business owner or self-employed? Are you in need of some quick cash but not enough to justify asking for a big loan? Luckily there are some small loan options for you that will help you out when you need it.
Keep reading to learn more about the benefits of micro loans when you need cash fast.
What are Micro Loans?
A micro loan is a loan that is between $500 and $50,000. Borrowers can ask for this type of loan when they need to buy inventory for their business, office supplies or equipment, or help to pay their employees’ wages. You can even use it to help pay yourself, if you need extra cash before your next paycheck, you can learn more here.
These types of loans can be faster than requesting a business loan and are often a great choice for small businesses that are just getting started. If your business doesn’t have a great credit score yet, this also might be a good option for you. These types of loans have been designed to help you get your feet on the ground and get funding for your start-up or small business idea.
How to Apply?
A micro loan is like any other loan where there is a set of standard eligibility requirements to meet first. These standards might vary from one lender to the next so you can research which one is right for your needs first.
First, you should see if there is a local intermediary lender in your community that provides assistance to local businesses. You might have better luck getting aid from a lender that understands your particular needs.
Next, you will have to fill out the application for a micro business loan. Most lenders will want to know what your business plan is, have proof of where your cash flow is going, and a solid plan and guarantee with how the money will be spent and paid back.
How Does a Micro Loan Affect You?
Before deciding to borrow a micro loan you should be aware of how this might affect you and your credit score. Most micro loans have been underwritten by non-profit organizations so they tend to follow a different set of criteria when borrowing.
They will still rely on your personal or business credit score when qualifying and can also have an impact on what types of interest rates you will get. Most micro loans will allow you up to six years to pay them back in full, be sure to do so otherwise it will reflect poorly on your business and your credit score.
Learn More About Micro Loans Today!
Micro loans are great for small business owners or those who are self-employed. They are often used to help your business plan get started, pay for employee wages or other expenses your business might need. In order to get the best loan and rates possible, reach out to local lenders and make sure to pay the loan back in the correct time frame.
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