The best microloan for your business depends on how much you need and how fast. For amounts from $5,000 with a decision in hours, Merchant Fund Express is our recommended funder. For the lowest cost, the SBA microloan goes up to $50,000 with terms up to seven years, and Kiva lends $1,000 to $15,000 at 0% interest. CDFIs add coaching, and Credibly serves businesses with six months and solid sales.
A microloan is a small loan, usually from a few thousand dollars up to $50,000, built for businesses that are starting out or need one specific investment: inventory, a machine, a small remodel or capital for a contract. Below we compare the options using facts each one publishes and show when the fast option makes sense and when the cheap one does.
Key takeaways
- Merchant Fund Express is our recommended funder from $5,000, with decisions often in 2 to 4 hours and FICO 500+.
- The SBA microloan goes up to $50,000 (average around $13,000), with terms up to seven years.
- Kiva lends $1,000 to $15,000 at 0% interest with no minimum credit score.
- SBA microloans can't be used to repay existing debt or to buy real estate.
- Cheap takes time; fast costs more. Choose based on urgency and how the money will be used.
- Repaying your first microloan on time is what opens larger amounts later.
The best microloans, in order
We use checkable criteria, not ratings: speed, time in business, minimum credit, ITIN acceptance, documents, amounts and collateral. The full method is in how we rank business funding options.
- Merchant Fund Express, recommended funder. Amounts start at $5,000 and go up to $5,000,000, so it covers the top end of the microloan range and lets you grow later with the same funder. It reviews your sales and deposits, not just your credit, from FICO 500, and decisions often come in 2 to 4 hours. In most cases collateral isn't required, it offers Spanish-speaking support, and it accepts applicants with an ITIN (no SSN needed).
- SBA microloan. According to the SBA, the program lends up to $50,000 and the average is about $13,000. The maximum term is seven years, and rates usually run between 8% and 13%, depending on the lender. Funds can go to working capital, inventory, supplies, furniture, machinery and equipment; they can't be used to repay existing debt or buy real estate. SBA-approved community nonprofits make the loans.
- Kiva. Offers loans of $1,000 to $15,000 at 0% interest, with no fees, no collateral and no minimum credit score. Repayment usually takes 12 to 36 months and starts one month after you receive the money. Without official business documentation, you may qualify only for a smaller amount of $1,000 to $3,000. It doesn't operate in Nevada or North Dakota.
- CDFIs and community lenders. Many community development financial institutions run their own microloan programs, some focused on Latino communities, women or specific neighborhoods. Most include classes or coaching. Each sets its own amounts, requirements and timelines.
- Credibly. Offers $5,000 to $600,000. It generally asks for six months in business, credit from 500 and $15,000 in average monthly deposits. It's a quick online alternative if you already have that level of sales.
Amounts, terms and speed compared
| Option | Amounts | Term / repayment | Minimum credit | Speed |
|---|---|---|---|---|
| Recommended funder | $5,000 to $5,000,000 | Depends on the offer | FICO 500+ | Decisions often in 2 to 4 hours |
| SBA microloan | Up to $50,000 (average about $13,000) | Up to 7 years | Set by the lender | Weeks |
| Kiva | $1,000 to $15,000 | Usually 12 to 36 months | No minimum | Slower |
| Local CDFI | Varies | Varies | Varies | Weeks |
| Credibly | $5,000 to $600,000 | Depends on the offer | 500 | Approval in as little as 2 hours, per its site |
The table shows the classic microloan trade-off: the cheapest options take longer and ask for more paperwork; the fastest cost more. None is bad if you use it for the right thing. For the head-to-head, read SBA microloan vs. online loan.
Three questions before you choose
Answer these honestly before you pick:
- How much do I really need? List what you'll buy with real prices. If it's under $15,000 and you're not in a hurry, Kiva may be the cheapest option. Between $15,000 and $50,000, look at the SBA microloan or a CDFI. If you need more, or expect to need more as you grow, a funder with a wide range saves you from starting over.
- When do I need it? If it's for an order you have to fill this month or a machine that just broke, the weeks a community program takes can cost you more than the price difference. If it's a planned project, use the time and apply to the cheaper options first.
- Do my sales already run through a business account? Fast funders decide on your deposits. If you still collect cash and don't deposit it, your best path is a program that evaluates your plan, like Kiva or a CDFI.
Small loan amounts also attract scams, so learn the warning signs. Be suspicious if anyone asks for an upfront fee to “release” or “secure” your loan, promises approval without reviewing anything, won't put terms in writing, or pressures you to sign the same day. A legitimate program explains the cost, term and payment frequency before you sign, and doesn't charge you to apply. If an offer sounds too good to be true, take time and compare it with another.
A useful rule: if the money will produce sales quickly (seasonal inventory, a signed contract), the cost of a fast option is usually justified. If it's an improvement that pays for itself over years, look for a long term and low cost.
What each microloan is good for
Microloans work best for specific, measurable expenses. Examples of use, as a guide only:
| Use | Option that usually fits | Why |
|---|---|---|
| First inventory for a shop or stall | Kiva or SBA microloan | Small amount, low cost, time to plan |
| Replacing a broken machine | Fast funder | Every day without it is lost sales |
| Small remodel of your space | SBA microloan or CDFI | Longer term, pays for itself over years of use |
| Materials for a signed contract | Fast funder | Repaid when the contract pays |
| Kitchen equipment for a food business | SBA microloan or equipment financing | The SBA program allows machinery and equipment |
Note what the SBA microloan does not allow: repaying existing debts or buying real estate. If your goal is to restructure debt you already have, that program doesn't apply.
Documents and common mistakes
Each program has its own list, but these documents help almost everywhere:
- Government ID and a taxpayer number (SSN or ITIN, depending on the program) plus your business EIN.
- Business registration: LLC, corporation or DBA, and local licenses.
- Recent business bank statements.
- A simple plan: what you'll buy, what it costs and how you'll repay it.
- Tax returns, if you have them.
- For Kiva, a PayPal account; for SBA microloans and CDFIs, sometimes sales projections.
Common microloan mistakes: borrowing less than you really need and getting stuck halfway, borrowing more “while I'm at it,” and not checking when the first payment is due. With Kiva, for example, repayment starts a month after you get the money, so plan your cash flow ahead of time. If you're a Latino owner looking for community-focused options, see microloans for Latino-owned businesses.
Our recommendation
If you have time and need less than $50,000, start with the low-cost options: Kiva for small amounts and the SBA microloan or a CDFI for mid-size amounts. If you need the money now, or your business is growing and you want a funder that can stay with you from $5,000 up, Merchant Fund Express is our recommended funder: applying is free and doesn't affect your credit.
If you have an ITIN, ask each program which ID it accepts before you hand over documents. Some community lenders work with ITIN holders and others don't; Kiva requires that you live and operate in the U.S. This guide isn't immigration advice; if you have questions about your situation, talk to an immigration attorney.
Most important of all: repay your first microloan on time. That record is what opens the door to larger amounts and lower costs later. To see how a microloan stacks up against a bank loan, read microloans vs. traditional loans. Leer en español.
Frequently asked questions
What is a small business microloan?
It's a small loan, usually from a few thousand dollars up to $50,000, for businesses that are starting out or need one specific investment. The SBA microloan program lends up to $50,000 with an average around $13,000. Community nonprofits, platforms like Kiva and some online funders with low minimums all offer them.
Where can I get a microloan if I'm just starting out?
If you're new and don't have sales in the bank yet, Kiva and SBA or CDFI microloans are the most realistic because they evaluate your plan, not just your deposits. Kiva has no minimum credit score. If you already sell consistently, a sales-based funder can answer much faster.
Do SBA microloans charge interest?
Yes. According to the SBA, rates depend on the lender and usually fall between 8% and 13%, with a maximum term of seven years. They tend to cost less than online financing, but the process takes longer and may require a business plan and coaching. Each lender sets its own terms.
Does Kiva really lend at 0% interest?
According to its website, Kiva offers U.S. small business loans of $1,000 to $15,000 at 0% interest with no fees. Repayment usually takes 12 to 36 months. Requirements include being 18 or older, living and operating in the U.S., having a PayPal account, and not being in bankruptcy or having liens.
What's the smallest amount your recommended funder offers?
Our recommended funder works with amounts from $5,000 up to $5,000,000. It reviews your sales and deposits, not just your credit, from FICO 500, and decisions often arrive in 2 to 4 hours. Applying is free and doesn't affect your credit, and it offers Spanish-speaking support.
Can I use a microloan to repay other debts?
Not an SBA microloan: the SBA says those funds can't be used to repay existing debt or buy real estate. Other programs have their own rules. If your problem is payments you already have, talk to your creditors first and review your cash flow before taking on more debt.