Microloan program driving small business growth
The Business Journal reported in July that Grand Rapids Opportunities for Women is tripling its microloan program from the $200,000 in Small Business Administration funds it had available last year to $600,000 going into this year. GROW announced late last week it is now accepting applications for the funding. GROW is a Small Business Administration Women’s Business Center.
The nonprofit agency noted in a press release: “The Microloan Program gives applicants a potential opportunity for funding that they cannot borrow through traditional banks — either because they don’t meet eligibility requirements or because they have a funding need below bank minimums set for business loans. Approved microloan borrowers receive a loan up to $50,000, as well as specialized technical assistance including GROW services like mentorship, entrepreneurial training, and one-on-one business counseling to ensure their success.”
Guidelines for applicants include:
- The ideal borrower has a reduced funding need (from a few thousand dollars up to $50,000).
- The borrower is interested in developing business skills further and will use funds for working capital, furniture, fixtures, machinery, inventory or other equipment.
- The Microloan Program can reach beyond Grand Rapids, and business owners in other parts of West Michigan are encouraged to apply.
Microloan Program Manager Bill Hahn said, “Many small business owners report that their biggest obstacle to growth is funding. Microlending can eliminate financial barriers and drive economic growth for individuals, leading to a strong economy for all of West Michigan.”
Women and men interested in receiving a microloan should contact Hahn by calling (616) 458-3404. More information about this and other GROW programs can be found at growbusiness.org.
GROW told the Business Journal it has two years to lend out the funds, but Hahn had said he expects to make all the loans this fiscal year because of the program’s popularity and growing visibility. “With the additional funds, it’s obviously going to increase our lending capacity,” he said.
Of the $200,000 made available last year, GROW extended $189,121 worth of credit to 14 businesses, and 17 loans were funded. Hahn said if lending continues at the same clip this year, he estimates helping three times the number of businesses.
The additional funding is particularly important to women business owners and entrepreneurs in the Grand Rapids community. Of the businesses that received loans during 2012, 92 percent were woman owned, 15 percent were minority owned, 23 percent were owned by single mothers, and 50 percent of the business owners had a household income that was less than HUD’s Low Income guidelines.
According to the Small Business Administration, more than 80 percent of small businesses use some sort of financing to grow their business.