1. Introduction to the Office of Economic Opportunity
Microloan Program
U.S. Small Business Administration

3. Welcome & Introduction
John D. Hunter, Sr.
Workforce Analyst 
Reentry Employment Opportunities USDOL| Employment & Training Administration (ETA)
Division of Youth Services (DYS) | Office of Workforce Investment

4. j. Christopher Webb Deputy Chief Small Business Administration
Microenterprise Development Division
Washington, DC

5. 1 Office of Economic Opportunity Programs
2 Microloan Program – How it works
3 Program Changes for Re entry Population
4 Resources / Contacts

6. Office of Economic Opportunity

7. OEO Programs Programs via Non-Profit Lenders
Community Advantage - Loan Guaranty, up to 250K
Intermediary Lending Pilot Program – Direct loans, up to 200K
Microloan Program – Direct Loans, up to 50K and Technical Assistance Grants
Prime Grant Program – Grants up to 250K, for technical assistance, capacity building, research and development

8. Microloan Program
The Microloan Program was created to assist women, low income, minority, and veteran entrepreneurs, and others in obtaining small amounts of business capital, along with business based training and technical assistance.
Microloans must be made to for profit businesses. Non-profit child care businesses are also eligible.

9. OEO Mission Increase lending to underserved Markets
Low to moderate income communities
Empowerment Zones, Enterprise Communities, HUB Zones, Promise Zones
Start-up businesses
Veterans
Minority-owned
Re-Entry Population

10. How The Microloan Program Works
SBA
SBA Lends $ to Intermediary Lender
SBA Provides grants $ to Intermediary Lender to help offset cost of providing Training and Technical Assistance (TA)
Intermediary Lender
Lends $ to Microbusinesses
Provides Training and TA to microbusinesses
Microbusiness

11. Max. Borrowing Maturity Interest Rate Collateral Matching Funds
$750,000 (1st loan)
$2,500,000 (subsequent loans)
$5,000,000 (Maximum Program Debt Outstanding)
Max. Borrowing
10 Years from Date of Note
Maturity
5 year T-Bill Rate less 2% for average microloan size under $10,000; otherwise less 1.25%
Interest Rate
Intermediary’s Microloan Revolving Fund, Loan Loss Reserve Fund, and Microloan Notes
Collateral
15% of Loan Disbursements must be matched with non-borrowed, non-Federal funds
Matching Funds
To make direct, short term, fixed rate loans of $50,000 or less
Use of Proceeds

12. Underwriting/Servicing
Up to $50,000
Loan Amount
Up to 6 years (72 months)
Maturity
Fixed rate, up to:
Cost of Funds % (if microloan is $10,000 or less)
Cost of Funds % (if microloan is above $10,000)
Interest Rate
To make loans for supplies, furniture, fixtures, materials, equipment, or working capital
Use of Proceeds
Required at Intermediary’s discretion – flexibility in structuring loan
Collateral
Decisions made by Intermediary - not SBA
According to Intermediary’s policies and procedures
Underwriting/Servicing

13. SBA provides Grant funding to Intermediary Lenders who in turn provide free business training and Technical Assistance to their microbusiness client.
Education starts before the microloans are made
Education continues over the life of the loan and some cases beyond!
Microlendings success has always been combined with education.
As in life a business owner should never stop learning.
Because things change we must adapt

14. Technical Assistance
Management and Technical assistance is provided to make sure the business is ready to compete and prosper for the long term.
Business plan preparation
Market research
Accounting services
Payroll services
Web Design
Social Media

15. Drilling Down on Lending
Credit Score – Most lenders will approve a low credit score
Re-entry Population – Business Owners currently on parole and probation are eligible
Collateral – Lenders determine requirement, if any
Refinance - Microloans can be used to refinance existing business debt
Larger Projects – can be completed with combination of Microloan + other loan

16. Real Life Success In Atlanta Ricky never gave up!
13 Years served non-violent offense
Hard working and did his homework
Could not get capital but……
Now has over 400 employees that he hired from the re entry population

17. Success
Katherine in Detroit served 10 years for transporting drugs for the wrong man.
In prison she learned the construction trade.
Could not get a job when she got out.
Got some training on business and started a home improvement company
Holds more than 10 million dollars in maintenance contracts.

18. How to get things started
Do you have a written business plan?
Take a look at the resources that will help you write or tweak your business plan
business/write-your-business- plan?interiorpage2015

19. Find a Microlender Take advantage of FREE education
List of Active Intermediary Lenders
Found at the bottom of the Microloan Webpage

20. Or use LINC on the SBA page
Use SBA’s LINC tool to find a lender near you
This tool connects prospective borrowers with approved SBA lenders.

21. How long does it take to get a loan?
The more you prep the quicker the loan approval
First rule of business
Each microlender has its own underwriting rules, make contact early

22. Microloan Program Resources/ Contacts
URL for SBA Microloan Webpage
Check out the SBA web page for additional products and free online education courses.

24. j. Christopher (Chris) Webb
Deputy Chief of Microlending
SBA