Microloan Demonstration Program (59.046)
Program
59.046 Microloan Demonstration Program
Federal Agency
Agency: Small Business Administration
Authorization
Small Business Act of 1953, Public Law 105-135.
Program Number
59.046
Last Known Status
Active
Objectives
To assist women, low-income, and minority entrepreneurs, business owners, and other individuals possessing the capability to operate successful business concerns and to assist small business concerns in those areas suffering from a lack of credit due to economic downturns. Under the Program, the Small Business Administration (SBA) will make loans or provide guaranties to private, non-profit, and quasi-governmental organizations (intermediary lenders) that will use the loan funds to make short-term, fixed interest rate microloans in amounts up to $35,000 to start-up, newly established, and growing small business concerns. These microloans are to be used exclusively for working capital, inventory, supplies, furniture, fixtures, machinery, and/or equipment. In addition, the SBA will make grants to participating intermediary lenders to provide marketing, management, and technical assistance to prospective borrowers and borrowers receiving microloans. In addition, the SBA will make grants to non-profit organizations, which are not intermediary lenders, to provide marketing, management, and technical assistance to low-income individuals seeking private sector financing for their businesses. Under the Program, SBA will also provide training for intermediary lenders and non-lenders participating in the Program.
Types of Assistance
DIRECT LOANS; FORMULA GRANTS
Uses and Use Restrictions
Loans to intermediaries with terms and restrictions as provided in Public Laws 102-140, 102-366 and 105-135 and subsequent regulations as published in the Federal Register.
Eligibility Requirements
Applicant Eligibility
An applicant is considered eligible to apply if it meets the definition of an intermediary lender as published in program materials, 13 CFR, and PL 102-140, and meets published minimum experience and capability requirements.
Beneficiary Eligibility
Small businesses, minority entrepreneurs, nonprofit entities, business owners, women and low-income, and other individuals possessing the capability to operate successful business concerns.
Credentials/Documentation
An entity may apply to SBA to become an Intermediary lender. A small business may apply to an intermediary for a microloan. Small business seeking funding must: (1) Meet SBA size standard requirements as defined in Chapter 13 of the U.S. Code of Federal Regulations; (2) meet type of business requirements as published by SBA; and (3) meet lending requirements of local intermediary lenders. This program is excluded from coverage under OMB Circular No. A-87.
Application and Award Process
Preapplication Coordination
Preapplication coordination is not applicable. Environmental impact information is not required for this program. This program is excluded from coverage under E.O. 12372.
Application Procedure
This program is excluded from coverage under OMB Circular No. A-102. This program is excluded from coverage under OMB Circular No. A-110. Microloan Borrowers: Apply directly to intermediary lenders. Intermediary Lenders: Apply to the SBA Office of Financial Assistance prior to deadlines and according to established procedures.
Award Procedure
Intermediaries are notified by SBA. Microborrowers are notified by the intermediaries.
Deadlines
Contact the headquarters or regional office, as appropriate, for application deadlines.
Range of Approval/Disapproval Time
Loan applicants can expect an answer from the SBA approved intermediary lender within 15 days from the date of application acceptance.
Appeals
Decisions on the part of the SBA are final. SBA will not become involved in appeals by microborrowers to intermediary lenders except in the case of suspected violation of Federal regulations.
Renewals
Based on performance.
Assistance Considerations
Formula and Matching Requirements
This program has no statutory formula.
This program has no matching requirements.
This program does not have MOE requirements.
Length and Time Phasing of Assistance
The maximum life of a loan to an intermediary lender is 10 years. Grants are based on the outstanding balance of the loan amount. See the following for information on how assistance is awarded/released: Additional detail available at SBA's website at sba.gov.
Post Assistance Requirements
Reports
Additional detail available at SBA's website at sba.gov. Additional detail available at SBA's website at sba.gov. Additional detail available at SBA's website at sba.gov. Additional detail available at SBA's website at sba.gov. Additional detail available at SBA's website at sba.gov.
Audits
In accordance with the provisions of OMB Circular No. A-133 (Revised, June 27, 2003), "Audits of States, Local Governments, and Non-Profit Organizations," nonfederal entities that expend financial assistance of $500,000 or more in Federal awards will have a single or a program-specific audit conducted for that year. Nonfederal entities that expend less than $500,000 a year in Federal awards are exempt from Federal audit requirements for that year, except as noted in Circular No. A-133. Required annually.
Records
Systems sufficient to generate accurate and acceptable reports.
Program Accomplishments
Fiscal Year 2008: See the FY 2010 Performance and Accountability Report on SBA's website at sba.gov. Fiscal Year 2009: See the FY 2010 Performance and Accountability Report on SBA's website at sba.gov. Fiscal Year 2010: See the FY 2010 Performance and Accountability Report on SBA's website at sba.gov.
Financial Information
Account Identification
73-1154-0-1-376.
Obligations
(Salaries) FY 08 $18,385,000; FY 09 est $23,080,000; FY 10 est $14,194,000
Range and Average of Financial Assistance
No Data Available.
Regulations, Guidelines and Literature
Contact the SBA Office of Financial Assistance, Microenterprise Development Branch, 409 3rd Street S.W., Mail Code 7881, Washington, DC 20416.
Related Programs
59.011 Small Business Investment Companies; 59.012 7(a) Loan Guarantees; 59.041 504 Certified Development Loans
Information Contacts
Regional or Local Office
See Regional Agency Offices. SBA District Offices.
Headquarters Office
David Lippold 409 3rd. Street, SW, Suite 6000, Washington, District of Columbia 20416 Email: david.lippold@sba.gov Phone: 202-205-6569
Web Site Address
Examples of Funded Projects
Not Applicable.
Criteria for Selecting Proposals
Applications are evaluated individually. Each is rated on its own merits or, in the case of an affiliated group, on the merits of each of the organizational parts that make up the whole. Qualitative and quantitative information regarding the applicant is reviewed. Criteria include but may not be limited to: (1) Organizational qualifications; (2) Knowledge of the local economy; (3)Lending experience and lending operations; (4) Current and proposed technical assistance program; (5) Current and Proposed Microloan Operation; (6)Availability and probability of matching contributions; (7) Information submitted in the grant package.
