This podcasts consists of an interview of Grady Hedgspeth, the director of SBA’s Office of Financial Assistance, by Ron Johnson of the SBA.

Some highlights of the podcast:

Ron Johnson: Tell us about SBA’s Microloan Program. How is this program different from any other small business loan?

Grady Hedgespeth: Well, most SBA loans are made through the 7(a) Loan Guarantee Program, where a bank makes the loan and SBA guarantees a percentage of that loan. Microloan Program is different. SBA actually makes a loan to an intermediary. Now, this is a nonprofit located in the community and that intermediary, in turn, makes a loan to a small business owner.

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Ron Johnson: And what criteria must a small business owner meet to qualify for a microloan?

Grady Hedgespeth: Well, first of all, it’s actually a very small loan so it’s, in some respects, ideal for startup businesses. The loan cannot be more than $35,000 and actually, the average microloan in the portfolio is only about $13,000. Generally, the borrower who would be qualified for a microloan would be someone who is not traditionally bankable. That maybe because they don’t have enough collateral to support a loan or they don’t have an established track record for their business or they might have a low credit score or no credit score at all because they’d never had credit.

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A Small Loan Can Make a Big Difference: SBA’s Microloan Program:

Grady outlines the SBA’s microloan program, explains the criteria to
qualify and steps you should take before applying for a microloan.

( Transcript)

Have you had a microloan from the SBA?