Do I Need Collateral
for a Microloan?
Many people are mistaken by
the belief that SBA loans through an intermediary lender do not require
any sort of collateral. But in fact, you do require collateral just like
any other kind of loan you might apply for.
You can often use business
equipment and other business assets you currently own as collateral for
a microloan. Be sure to evaluate any equipment you have that could be
used as collateral, including market value, so you can present it.
Also, some borrowers may be
required to sign a personal guarantee for their microloans.
If you do not have collateral,
the SBA still may approve you for a loan, however, excellent credit is
usually required. And lack of collateral can be cited as the reason you
are denied for a microloan approval.