SBA Microloans and CDFIs: The On-Ramp

For files too young for conventional loans, two on-ramps exist: SBA microloans (up to $50,000 through nonprofit intermediaries) and Community Development Financial Institutions, whose mission is lending to borrowers banks pass over.

Why it matters

This is where a six-month-old business with clean books actually gets funded - at single-digit rates, with reporting that builds the file. The trade is paperwork and patience instead of predatory pricing.

Key facts

• SBA microloans average about $13,000 and come with mandatory business counseling - which is the point.
• CDFIs are certified by the Treasury to serve underbanked communities; many underwrite character and cash flow over score.
• Rates are real-loan rates, not factor rates - typically single to low double digits.
• Both report to business bureaus, making them tradelines as well as capital.

In practice

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