More Small Businesses Turning To Microloans
Written by Ken Gaebler
Funds from stimulus package used to loan money to small business.
An increasing number of small business owners who have had a difficult time getting loans from traditional banks are getting new funding from microlenders.
As part of legislation signed by President Barack Obama in the American Recovery and Reinvestment Act, $56.1 million was set aside for small businesses in the form of microloans. The funds were dispersed by the Small Business Administration, which give the money to nonprofit lenders at an interest rate of about 1 percent, the Wall Street Journal reports.
Without the aid of the government's stimulus package, many lenders would not have been able to make as many loans as they did.
"We were ready to expand our lending and the stimulus enabled the next round of lending to come in, and at much a lower interest rate that's near zero," said Nancy Carin, executive director of Boc Capital, in an interview with the news source.
In addition to the federal government's help, a handful of states are jumping onto the microlending bandwagon. Three companies in Michigan made news for small business when they received a total of $140,000 from the Michigan Microloan Fund Program.
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