5 Ways a Micro SBA Loan Can Help Fund Your Startup
Unlike other types of SBA loans, the Microloan Program is less than $100,000. With a cap of $50,000, these kinds of loans often go to startups with lower funding needs.
Although many entrepreneurs mistakenly believe that startups do not qualify for government lending, this is one type of SBA loan that specifically targets those who are just starting out in their business endeavors. Other than paying off debt or purchasing real estate, there are numerous ways you can use this funding for your startup. Consider these five.
1. Working Capital
Without a doubt, every successful business needs working capital with a good ratio. When you first start out, however, achieving that can be challenging. This is one way that microloans can be useful. As one of many options, a common and perfectly acceptable practice is for companies to apply these SBA funds to their working capital.
2. Inventory or Supply Purchases
Another way to use this type of SBA loan is for inventory or supply purchases. Are there necessary supplies that your business really needs but you have been putting off due to a lack of funds? If so, this can be another eligible reason for requesting a microloan.
3. Furniture or Building Fixtures
When it comes to the interior of your startup, how old are the future pieces or building fixtures you are using? For most companies, these are regular expenses that occur through the years as property ages and requirements change, but startups often turn to outdated products to save money. If this sounds familiar, it can another way to use an SBA microloan.
4. Machinery or Equipment
Just as business owners often put off purchasing supplies, they often delaying buying new equipment and machinery to save on costs. Unfortuately, this is one area where safety can become a concern. If you are looking for a way to cover the cost of making your establishment safer with equipment upgrades, the Microloan Program can be a great option for that, too.
5. Repairs
Whether your company is new or old, the need for repairs can happen at any time. When problems happen to a startup, however, costs can be even more devastating due to limited funds. Luckily, a micro SBA loan also works for restoring your business back to its original working condition.
For entrepreneurs who are looking for a government business loan program to help them launch their startups, the SBA Microloan Program can be a solid option.
