Microloans: Overview and Best Microlenders
Microloans can be a good fit for those who can’t qualify for traditional financing, such as startups and borrowers with bad credit.
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What are microloans?
Microloans are business loans for a small amount of money, usually up to $50,000. These small-business loans are geared toward entrepreneurs who can’t get a traditional loan, such as borrowers with bad credit or new businesses. Microloans are also a good option for businesses owned by women, minorities and veterans, as well as those in low-income communities.
Don't count yourself out.
How do microloans work?
Microloans work like standard term loans. You receive a lump sum of money and repay it, with interest, over a set period of time.
Loan terms, interest rates and amounts vary by lender.
For instance, SBA microloans offer up to $50,000 and can be repaid over as long as seven years. Loans from the nonprofit Grameen America offer only up to $2,500, which must be repaid within six months.
What can you use a microloan for?
Microloans can be used for many needs related to starting or growing a business. For example, you can use one to manage daily expenses, buy inventory or cover payroll.
Best microlenders
You can get microloans from SBA intermediaries, the U.S. Department of Agriculture and nonprofit or community organizations. Some are also offered through peer-to-peer lending platforms, like Kiva U.S.
Here are NerdWallet’s top picks for the best microlenders.
SBA microlenders
SBA microloan
620
Microloan size: Up to $50,000.
Interest rates: Vary. Typically 8% to 13%.
Availability: Nationwide.
The SBA microloan program is funded by the U.S. Small Business Administration and run through community lenders, called intermediaries. These lenders help small businesses that don’t qualify for other types of SBA loans.
Interest rates, terms and requirements vary by lender, subject to SBA guidelines. For example, repayment terms can’t exceed seven years.
The average microloan is around $13,000, much lower than the maximum available amount, according to the SBA.
As of October 2025, 158 SBA microloan intermediaries serve all 50 states, Washington, D.C. and Puerto Rico. You can find a lender that serves your area by searching the SBA’s website.
» MORE: Compare the best SBA lenders
Accion Opportunity Fund
Accion Opportunity Fund Small Business Working Capital Loan
620
Microloan size: $5000 to $250000
Interest rates: 9.99% to 28.95%.
Availability: 45 U.S. states. Loans not available in Montana, North Dakota, South Dakota, Tennessee, Vermont or Washington, D.C.
Although Accion Opportunity Fund offers a larger maximum loan amount, its funding program is similar to that of microlenders.
To qualify for an Accion business loan, you’ll need at least 12 months in business, $50000 in annual revenue and a credit score of 620 or higher.
When you apply, Accion presents several offers with different rates and terms, so you can pick the one that fits best. Repayment terms range from 18 to 36 months.
Accion also offers free coaching, mentoring and financial education for small-business owners.
Farm Service Agency
Microloan size: Up to $50,000.
Interest rates: As of October 2025, the rate is 4.875% for operating loans and 5.875% for ownership loans.
Availability: Nationwide.
Part of the U.S. Department of Agriculture, the Farm Service Agency (FSA) offers two types of farm loans through its microloan program. These loans help new, nontraditional and small to mid-sized family farms.
Farmers can apply for:
Farm ownership microloan. Used for farm purchases or repairs. Repayment terms can last up to 25 years.
Farm operating microloan. Used to buy farm equipment, tools, livestock or cover operating costs. Repayment terms depend on how the funds are used. Loans for operating expenses typically last up to 12 months, or whenever the goods produced with the loan are sold. For larger expenses, like equipment or livestock, terms can stretch up to seven years.
To qualify, you must meet FSA guidelines. Contact your local FSA office for more information or help with the application.
LiftFund
Microloan size: Varies based on program, starting at $500.
Interest rates: Typically around 14.5%.
Availability: Alabama, Arkansas, California, Florida, Georgia, Kentucky, Louisiana, Mississippi, Missouri, New Mexico, New York, Oklahoma, South Carolina, Tennessee and Texas.
LiftFund, a nonprofit, community development financial institution (CDFI), offers SBA microloans, among other types of financing.
LiftFund works with businesses with bad credit, short time in operation and/or limited collateral, and provides guidance after you apply. Borrowers can also attend workshops and one-on-one sessions with LiftFund business coaches.
Ascendus
Microloan size: Up to $50,000.
Interest rates: 7.5% to 15.99%.
Availability: Nationwide, except Vermont and California.
To qualify for a microloan from Ascendus, you’ll need at least six months of consistent revenue, a credit score of 575 or higher and no more than $3,000 in past-due debt.
Ascendus also offers a business line of credit, as well as programs specific to certain regions, industries and borrowers with bad credit.
Justine Petersen
Microloan size: Typically up to $50,000.
Interest rates: 6% to 20%.
Availability: Missouri, eastern Kansas and southern and central Illinois.
Justine Petersen, a St. Louis nonprofit, offers several types of microloan programs, including SBA and USDA microloans and the Able Biz microloan program for people with disabilities.
Loan terms and rates depend on your business qualifications.
Small-business owners can also access counseling and training to help grow their business.
Kiva U.S.
Microloan size: $1,000 to $15,000.
Interest rates: 0%.
Availability: Nationwide, except Nevada and North Dakota.
Kiva U.S. is part of Kiva, a nonprofit offering peer-to-peer microloans.
To get an interest-free loan, you must pre-qualify and invite friends, family, clients or business partners to help fund it. Kiva doesn’t require a minimum credit score, time in business or collateral, making it a good option for building business credit through community support.
Once that happens, Kiva opens the loan to people who help crowdfund the desired amount. Funding can take about eight weeks, and you have up to 36 months to repay your loan.
Grameen America
Microloan size: $500 to $2,500 for first-time loans.
Interest rates: 15% to 18%.
Availability: In 29 U.S. cities.
Grameen America uses a group lending model. You form a group with four other women, complete financial training and then receive a microloan.
Groups meet weekly to make repayments and receive ongoing education.
First-time loans are repaid in six months, and larger loans may be available after successful repayment.
Grameen America does not require a minimum credit score, business income or collateral. The program focuses on helping women entrepreneurs grow their businesses, build credit and create jobs.
Pros and cons of microloans
Flexible eligibility. Startups and those with bad credit may qualify.
Loans targeted to women, minorities, veterans, those in low-income areas and other underserved communities.
Competitive interest rates.
Many lenders offer business training and other resources.
Small loan amounts.
May have higher rates and shorter repayment terms compared with traditional loans.
Options may be limited by your location.
Can be slower to fund, especially compared with online loans.
How to get a microloan
Follow these steps to learn how to qualify and get a microloan for your small business.
1. Check eligibility
Microlenders typically have flexible business loan requirements. Some don’t even require a minimum credit score or annual revenue. Still, it’s smart to understand your business’s finances before applying. That way, you’ll know where you stand and what loan options you may qualify for.
Most lenders consider:
Personal credit score.
Annual revenue.
Time in business.
Past or current debt.
Past bankruptcies.
Depending on the lender, you may also have to offer collateral or be part of an underserved community to qualify.
2. Find the right microlender
The best microlender for your business is usually the one that offers the most favorable rates and terms. But there are other factors to consider, like funding speed and the business support and resources provided.
Start your search with local microlenders. The SBA’s website lists SBA microloan intermediaries by state, as well as regional business groups for other microlending options.
3. Apply
Many microlenders let you apply online. You’ll fill out details about you and your business — and upload supporting documents, such as:
Business and personal bank statements.
Business financial statements.
Business and personal tax returns.
Approval times vary by lender and can take anywhere from a few days to several weeks. The lender may also reach out for more details or to discuss your options.
» MORE: How to get a business loan
Microlending alternatives
If a microloan doesn’t fit your needs, or you simply want to explore other types of business loans, consider:
Other loans from microlenders. Many microlenders offer alternative forms of funding, including SBA Community Advantage loans, business term loans and business lines of credit. LiftFund’s Heroes Program, for example, provides up to $100,000 for veterans, their spouses and active duty military members.
Online lenders. If you need more money or faster funding, online lenders may be a good fit. Many work with newer businesses or those with poor credit histories. But like with all lenders, you should compare factors like interest rates and funding times to find the best one for you.
Community lenders. You can also turn to local lenders, like CDFIs. They specialize in helping underserved business owners that don’t qualify for traditional loans.
Ready to get funding?
If you’ve been in business for less than two years: Consider our list of the best startup business loans.
If you have poor personal credit: Look for loans with lenient credit qualifications that are targeted toward businesses with bad credit.
If you need more funding than typical microloans offer: Start by researching the best small-business loans out there.
If you need to cover seasonal needs or frequent cash flow gaps: A business line of credit is a revolving source of capital that may be better suited to your needs.