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	Business Loan Micro-Loans It is extremely difficult for start-up businesses and new small businesses to obtain financing when they have a history of less than three years. The majority of new businesses are financed by personal investments from the owner, family and friends. New and growing businesses face unique situations that often make it necessary to secure a loan. Unexpected expenses occur in every phase of a business, from start-up to expansion, and often require a small amount of money from outside the business. The Small Business Administration (SBA) Micro Loan Program provides small loans to new businesses and growing small businesses. These loans are awarded to small businesses that demonstrate the lack of adequate capital or funds to fully finance the business' needs. The Micro Loan provides funding with flexible terms and conditions to meet business needs. The loan can be used for working capital, equipment and machinery and inventory. Through the Micro Loan Program, the SBA works with local nonprofit community based lenders, called intermediaries, to make loans available to small businesses. The loan is made through the intermediary, such as a community enhancement organization, which receives funding from the SBA. The intermediary lends the money based on its own requirements. For example, an intermediary may only lend to manufacturing, retail, wholesale and service businesses that have five employees or less at the time of application and meet the definition of a small business. The goal of many intermediaries is the creation of jobs within the community. In these cases, the small business has to demonstrate potential for job creation, especially jobs which would be available to low and moderate income individuals. The average loan amount for a Micro Loan is $10,500, though a business may borrow up to $35,000. Many intermediaries require collateral and the personal guarantee of the business owner. The lender sets the interest rate and the loan term depending on the size of the loan, planned use of the loan and the needs of the small business. The SBA sets the maximum term allowed for a Micro Loan to six years. Many intermediaries offer deferred payment options, longer amortization periods and flexible payment schedules. The SBA Micro Loan Program not only provides necessary funds, but it also gives the business an educational opportunity. In return for the SBA funding, the lender must provide business training and technical assistance to its borrowers. The goal of the program is to both fund and better education small businesses. Often, business training and planning requirements must be completed before a loan application is considered. The small business must be open to accept close management consultation and technical assistance throughout the life of the loan. There are many advantages associated with the Micro Loan program. Not only can business owners receive a much needed loan to help with a variety of costs, but they also receive business training and consultation. All loans are made on the local level and are designed for businesses that will give back to the community. Micro Loans provide many businesses with the small loans that keep them growing towards success.