The Fresno Community Development Financial Institution Microloan Program provides small, short-term loans to small business concerns and certain types of not-for-profit child-care centers in the California counties of Fresno, Kings, Kern, Tulare, Madera, Merced, Stanislaus, San Joaquin, and Monterey.
The SBA makes funds available to specially designated intermediary lenders, which are nonprofit community-based organizations with experience in lending as well as management and technical assistance.
These intermediaries make loans to eligible borrowers.
The maximum loan amount is $50,000, but the average microloan is about $13,000.
How MicroLoan Funds May Be Used Microloans may be used for the following purposes:
- Working capital
- The purchase of inventory or supplies
- The purchase of furniture or fixtures
- The purchase of machinery or equipment.
Proceeds from a microloan cannot be used to pay existing debts or to purchase real estate.
Technical Assistance Each intermediary (lender) is required to provide business training and technical assistance to its micro-borrowers.
If you apply for microloan financing, you may be required to fulfill training and/or planning requirements before your loan application is considered.
This business training can be helpful to you as you launch or expand your small business.
Terms, Interest Rates, and Fees Loan terms vary according to:
- The size of the loan
- The planned use of funds
- The requirements of the intermediary lender
- The needs of the small business borrower
- The maximum term allowed for a microloan is six years.
- Interest rates vary, depending on the intermediary lender and costs to the intermediary from the U.S. Treasury.
Generally, these rates will be between 8 and 13 percent.
Collateral Each intermediary lender has its own lending and credit requirements.
Generally, intermediaries require some type of collateral as well as the personal guarantee of the business owner.
General Terms and Conditions of the Borrowers Loan SBA does not review micro-loans for creditworthiness.
Generally, intermediaries should not make a micro-loan of more than $20,000 to any borrower.
An intermediary may not make a micro-loan of more than $30,000 unless the borrower demonstrates that it is unable to obtain credit elsewhere at comparable interest rates and that it has good prospects for success.
An intermediary may not make a micro-loan of more than $50,000, and no borrower may owe an intermediary more than $50,000 at any one time.
Each micro-loan must be repaid within six years.
The maximum interest rate that can be charged a micro-loan borrower is determined by the following formula: On loans of more than $10,000, the interest rate charged on the SBA loan to the intermediary, plus 7.75 percentage points; On loans of $10,000 or less, the interest rate charged on the SBA loan to the intermediary, plus 8.5 percentage points.
Fresno Community Development Financial Institution
Address: 1900 Mariposa Mall, Suite 210