A microloan is exactly what it sounds like: a small business loan, typically up to $50,000, designed for businesses that need modest capital and may not qualify for a larger bank loan.
How microloans work
Microloans usually come from nonprofit and community lenders, including SBA microloan intermediaries, rather than big banks. Amounts are small, terms run a few years, and the application often weighs your plan and character alongside the numbers.
Because the dollar amounts are low, they are a practical fit for early-stage needs like inventory, equipment, supplies, or working capital.
Who microloans fit best
They tend to suit owners who are harder to fund elsewhere:
- Startups and very new businesses
- Owners with limited or building credit
- Businesses needing under $50,000
- Underserved and community-focused entrepreneurs
The trade-offs
Microloans often come with helpful support, like mentoring or business coaching, and reasonable terms. The downsides are the small ceiling and, sometimes, a slower, more paperwork-heavy process than online funding.
If you need a larger amount or money quickly, a microloan may be too small or too slow, and a revenue-based option could fit better.
How to decide between options
A microloan is one tool among many. Depending on your revenue, speed needs, and amount, a line of credit, equipment financing, or revenue-based funding might serve you better.
The Broker Shop helps you weigh a microloan against faster alternatives and lets 50+ lenders compete for your file. Checking your options is free and won't affect your credit score.
See what you qualify for
One 2-minute application reaches 50+ competing lenders. It's free, and checking your options won't affect your credit score.
See What I Qualify For →The bottom line: A microloan is small, startup-friendly funding usually under $50,000, ideal for modest early needs, weigh it against faster options to find the best fit.