Micro lenders are community based, nonprofit organization that target clients who are unable to secure loans from more traditional lending sources.
Boston, MA (PRWEB) October 21, 2012
LeaseQ, one of the leading equipment leasing and financing providers in the United States, is offering a number of creative leasing and financing options aimed at the small business owner, designed to allow them to properly equip their businesses with the necessary operating gear and equipment while managing to retain significant capital that may be funneled toward other projects. With an economy that is still sluggish and a fiscal future that is nebulous at best, LeaseQ introduces microloans are one of the newest services in business equipment financing and leasing.
In many cases, startups and small businesses with less than 10 employees and under $500,000 in annual revenue may encounter significant difficulty when it comes to receiving loan approval for larger projects from some of the more prominent banking institutions. In these cases, micro lenders are often the more plausible finanacial option. Micro lenders are community based, nonprofit organization that target clients who are unable to secure loans from more traditional lending sources.
Micro lenders receive money from the SBA, local governments, and grants from various philanthropic organizations, and then make small business loans to these smaller companies. In many cases, the company in question has maxed out all other available financial resources, and as such are unable to receive the assistance they require from traditional banking institutions.
Micro loans are often used for working capital and purchases of equipment, machinery, furniture, or even inventory. The money may not be used to pay off existing debts or to purchase land or buildings. The amounts vary, but most micro loans fall somewhere between $10,000 to $50,000. Micro loan companies also are more willing to grant loans to companies without a long track history, experience in their field, or any significant collateral.
Due to the added risk, interest rates may be higher than those found in traditional banks, and terms depend on the size of the request, the use of the funds, and the requirements of the lender. There will be some measure of collateral that is required, as well as the personal guarantee of the business owner.
Of course, micro loans are not the be all and end all for small business. With most small businesses requiring around $100,000 to get off the ground, and the average micro loan coming to about $12,000, these loans should be looked at as additional assistance rather than the basis for an entire small business launch.
Based in Boston MA, LeaseQ is one of the premiere sources for equipment lease finance options in the United States.