Benefits of Getting a Microloan

A business credit-building and corporate financing professional based in Saddle Brook, New Jersey, Edward Espinal leads Cash Flow Partners as CEO and founder. Through his business, Edward Espinal works with small and large companies to help them secure funding through business loans and microloans.

As the name suggests, microloans provide businesses with a small amount of funding. Although these loans are available to businesses who need up to $50,000 in funding, the average microloan is made in the amount of $13,000.

Getting a microloan can be hugely beneficial to companies. Typically, microloan lenders look at multiple factors when determining whether to approve a loan or not, such as collateral or a personal guarantee. These additional factors add more flexibility to the terms of a microloan, thus making it easier for companies to get than a traditional business loan. Since these loans are easier to get, they help companies improve and build their credit scores and business history so they have a greater chance of being approved for a traditional loan in the future.

Microloans also help new business owners develop their business knowledge. Most lenders require that borrowers complete business and technical training before they receive a microloan. This training helps founders avoid common startup mistakes and pay back their loan easier. 

Once the training is completed, the microloans may come through in as little as two weeks. This is significantly faster compared to traditional loans that can take months to fund.