If you need a smaller amount to launch or grow, an SBA Microloan may fit better than a bank loan. Microloans go up to $50,000, and they come from nonprofit community lenders called intermediaries, not from banks. Many intermediaries also offer free coaching, which matters a lot for first-time owners.

How Microloans work

• Amount: up to $50,000. Many loans are smaller.
• Lender: a nonprofit intermediary that borrows from the SBA and relends to small businesses.
• Uses: working capital, inventory, supplies, furniture, fixtures, machinery and equipment.
• Not allowed: paying off existing debts or buying real estate.
• Terms: set by the intermediary, generally up to several years. Rates are usually higher than a 7(a), but far below most online short-term loans.
• Requirements: each intermediary sets its own credit and collateral rules. Most require a personal guarantee, and many require you to take training or a business plan workshop.

Who Microloans are good for

• Startups that a bank would consider too new.
• Home-based and very small businesses: a cleaning company, a food vendor, a hair stylist renting a chair.
• Owners rebuilding credit who can show they are on the right track.

The 2026 ownership rule

Since April 1, 2026, the SBA requires that Microloan borrowers be 100% owned by U.S. citizens or U.S. nationals, the same rule that applies to 7(a) and 504 loans. People born in Puerto Rico are U.S. citizens and still qualify. If an owner holds a green card or another status, look at a CDFI instead; many offer similar small loans with their own rules.

How to find a microlender

Microlenders are local, so start close to home:

1. Ask your local Small Business Development Center (SBDC). Advisors know which microlenders are active in your area. See our guide to free help in Spanish.
2. Check the SBA’s list of Microloan intermediaries for your state.
3. Call two or three and ask: maximum amount, typical rate, collateral, training requirements and how long a decision takes.

Note: our lender finder shows banks and CDCs from the SBA’s 7(a) and 504 data. Microlenders are not in that data, so use the steps above for them.

Microloan or SBA Express?

If you need under $50,000 and you are new, start with a microlender. If you have two or more years, good credit and need more, compare an SBA Express loan. Not sure? Our quiz points you to the program that fits your amount and situation.

Frequently asked questions

Who makes SBA Microloans?

Nonprofit community lenders called intermediaries. They borrow from the SBA and relend up to $50,000 to small businesses.

Can I use a Microloan to buy real estate or pay off debt?

No. Microloans can pay for working capital, inventory, supplies, furniture, fixtures and equipment, but not real estate or existing debts.

Can green card holders get an SBA Microloan?

Not since April 1, 2026, when Microloans adopted the rule that all owners must be U.S. citizens or nationals. A CDFI loan is usually the best alternative.