In the United States of America, as in our country, there is some indefinite attitude to Payday Loans Online services. Many people believe that this is a good type of business financing, but some believe that they are created to serve the lower strata of the population.
This may be due to the fact that it is officially believed that microcrediting appeared in Bangladesh, where the founder of Grameen Bank, Muhammad Yunus, about ten years ago started issuing small loans for the rural poor. These measures led, in the end, to noble goals. There was an alternative to moneylenders, support for small businesses, combating poverty, empowering women, and as a result, whole communities were raised. In 2006, Muhammad Yunus received the Nobel Prize, and his concept spread throughout the world.
The moral of this story is that microloans in the US are available to small businesses that can not have a sufficient credit history, or perhaps they are owned by women or minorities – groups of people who generally do not have access to financing.
In fiscal year 2016, the US administration provided 4.472 microloans to small businesses totaling more than $ 60 million. About 40% of loans were granted to organizations that belonged to women and minority representatives. In addition, in 2016, more than 40% of micro-loans were closed, their terms were two years or less.
What is microloans in the US?
“Microloans are more focused on people who are having difficulty accessing traditional loans,” says Joyce A. Klein, director of the well-known fund for microenterprise innovation. “Microfinance organizations are generally more flexible than banks. If someone has a short credit history or does not have it at all, MFIs are more willing to consider other factors, such as the cash flow of business. ”
Limit on microloans in the US is $ 50,000, and the average amount of such a loan is about $ 13,000. Enterprises can use this money to buy necessary equipment, supplies, furniture, machines and other equipment. Micro loans are issued for no more than 6 years and, as a rule, have rates below 10%. But if we talk about long-term loans, the prices for financing can bite.
How to get a microloan in the US?
First of all, the organization should have a business plan. For those who may have difficulties with its drafting, there are special centers for small business development that can help in writing a business plan.
MFIs, as a rule, request information about the enterprise, such as a tax return, bank statement and others.
As in Russia, different microfinance organizations have different criteria for scoring their clients. Most often, they request a personal credit history of one of the participants in the business. Unlike banks, the CI score is more flexible, which gives a better chance of taking a microloan. By studying personal data, the MFI concludes that the participant will treat their business as well as their own finances.
How to choose a microfinance organization?
In the United States, there is a specially appointed intermediary for this purpose. These non-profit organizations have extensive experience in the field of lending and can provide significant assistance to small businesses.
On the official site of support of small business the catalog, participants-creditors which are located on all country is given. Without any complications, the company that wants to borrow is registered on the site and answers simple questions about its business and its financial needs. After that, in a short time gets a list of MFIs that are most suitable for cooperation.
In addition to this site, there are several other non-profit organizations that can provide information about MFIs. They differ in the interface and certain conditions of cooperation.
The company “Kiva”, which on the Internet site joins credit organizations and potential borrowers has proved to be well. At the moment, this site has already passed 936.5 million dollars in 82 countries. About 1.6 million borrowers are registered in the system. Of all loans issued, 97.1% were successfully repaid. There is one nuance of this site: sometimes you may need to invest relatives or friends in your business to get a loan.