Non-Bank Lenders

Non-Bank lenders are a special group of organizations that cater to businesses other lenders overlook. Many commercial banks will not make commercial loans under $50,000, and are not willing to risk investing in very small start-up businesses or in loans not fully collateralized.

The Small Business Administration (SBA) developed the Microloan Program in 1992 to increase the availability of very small loans to small business borrowers. This program achieved permanent status in 1997, and uses nonprofit intermediaries to make loans to new and existing borrowers. From 1993 through January 1998, this program accounted for 6,380 loans totaling more than $65 million. Funding can be used for working capital, inventory, supplies, furniture, fixtures, machinery and equipment.

The best candidates for micro-loans are start-up companies with lower capital requirements and limited operating history. Micro-loan borrowers can benefit from the intermediary's expertise in business. Range of funds typically available is $100 to a maximum of $25,000. The industry-average loan size during the past several years was around $10,900, with an average loan maturity of 37 months. Some loans, however, may go as long as six years.

Link to some of Cenla's Non-Bank Lenders:

Accion

Red River Valley Bidco, Inc.