Micro Loans are also referred as Micro Credit. These Loans are typically small business loans that starts from $1000 or less and can be used for various purposes such as in inventory or any purchases. Most of payday loans
are lend by non- profit and community-based organizations. They are very helpful for low income based people. Sometimes little money offered to them via these loans can change their economic world entirely. Loan terms and interest rates can differ for every loan plan but generally they are available for short repayment period. They are easily available to people who have low credit or do not have any collateral to pledge.
How do they help?
These loans help to nurture small business loans. Indirectly they are very helpful in developing in small economy. Thus, those who need a little financial push to take their business to new heights should take advantage of micro lending. They can be used for
Furniture or fixtures
Inventory or supplies
Equipment or machinery
Who should apply for this online payday loans Ohio service?
These loans are viable for those who are looking for small loan amount to finance their local businesses. Moreover for those who fails to qualify for traditional loans, micro lending is a helpful alternative. Operating businesses that fall into minority, especially women oriented business and which are located in distressed communities can take good advantage of these loans.
Who is Eligible?
Before submitting your loan application, confirm that are you eligible, following are some the points to be considered
• You should be a USA citizen or permanent resident.
• You should be able to show that you are able to handle monthly loan payments.
• Most importantly you should be able to mention that how micro lending can help you in financing and expanding your business.
• You should also be in majority age.
As I have mentioned above that interest rates and repayment terms vary from loan to loan. Following are some of the factors that affect repayment terms: –
• Planned use of funds
• Loan amount
• Needs of small business borrower
• Requirements determined by intermediary lender
The maximum loan repayment period extends up to six years. Interest rate generally stays between 8 and 13 percent.
They can be borrowed from non-profit community based organizations which practice in lending and business management services. Before getting loan application sanctioned, a person has to fulfill training and planning program. Training is done according to your business so that you can use borrowed money efficiently and can expand your business.
Financing is not the only option that these loans offer rather they give you an opportunity to learn about various marketing, sales and accounting skill which can be very helpful in boosting up your business. Some of the lenders also offer you to promote your business with them.
Disadvantages of Micro Lending
• Their biggest disadvantage is that they sometime involve inflated interest rates.
• They usually cost more than a bank loan but less than paying for a credit card.
• Sometimes it may not lend your enough money necessary for financing your business. So you may end in need of extra funds.
On a whole, Micro-loans are small business loans to lend people to launch a new business or get back to work in a field of choice.