Access to capital has always been a major problem for small businesses, particularly for newly-formed businesses or those looking to expand, and even more so in the recent economic downturn. The number one inquiry we get at the WBDC is regarding business financing and if we provide loans to small businesses. While the WBDC has always provided loan packaging services, through a partnership with the IL Department of Commerce and Economic Opportunity, we are now implementing a new small business microloan program.
So what is a microloan? A microloan is a small (hence the “micro” in microloan) loan, typically for small business development or expansion, to individuals who don’t have access to traditional sources of credit due to a lack of collateral, poor credit scores or credit history, etc. Microlending is also known as microcredit, which is a part of microfinance, the provision of a wide range of financial services to low-income clients or solidarity lending groups, typically women, all over the world.
Microcredit is generally considered to have been originally pioneered by Mohammad Yunus, founder of Grameen Bank in Bangladesh. Today, there are numerous microcredit/microloan organizations such as Kiva, Opportunity International and Accion.
The WBDC will soon be offering microloans to newly-formed and existing businesses in Illinois. Interested small business owners should attend one of the free informational sessions during the week of October 25, 2010.
Sessions will be held:
- October 27, 8-10 a.m. at the National Museum of Mexican Art, 1852 W. 19th St., Chicago, IL
- October 28, 9-11 a.m. at White (Willye B.) Park, 1610 W. Howard St., Chicago, IL
- October 29, 8:30-10:30 a.m. at Northern Trust Bank, Community Room, 7801 S. State St., Chicago, IL
Sessions will explain the loan application process and available technical assistance, and business owners will be able to submit their loan application on-site at any of these events. For more information click here.
Have you already benefitted from a microloan? Please share your story in the comments below!