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Advantages and disadvantages of Micro-Loans

Micro-loans are usually for $5,000 to $35,000. The loans are often available for start-up businesses.


  • The loan process is fast.
  • Loan funds are available for start-up business use.
  • Minimal required documents: a short business plan and income tax returns (business and personal)
  • The loan is usually combined with business training and technical assistance.
  • Average loan amount is $13,000, which usually is not enough to fund a business
  • If funds are used for operating deficits, it makes it harder to become profitable - because the business must pay for operating expenses plus the loan.

Where to find micro-lenders

Micro-lenders can be found through at least 5 sources:
  • SBA approved micro-lenders
  • Check the information in the Funding section of the Tools for local micro-loan programs
  • Local CDBG loan funds
    • Some communities have used part of their Community Development Block Grants for a business loan program. Contact your city economic development department for information.
  • Local banks and credit unions with small business focus
    • Contact your Small Business Development Center to request a list of local micro-lenders. The SBDC will probably ask that you meet with them first to prepare a business plan. Working with the SBDC will give you a more favorable standing with the micro-lender.
  • Accion Microloans
    • As a last resort (i.e. you have to exhaust all other sources first), Accion Microloans funds micro-loans.
Ongoing Responsibilities

  • Micro-loans usually require some training or one-on-one consulting to strengthen your business skills.
  • Many micro-loans require you to send quarterly financial reports to the lender.

About Us

The Chamber in Jackson County continues its main role as an active leader and facilitator in bringing together the resources of Jackson County agencies and organizations to promote cooperation, credibility, and communication while providing the means of quality growth in the community. The main focus will always be towards the small businesses of Jackson County.

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We're located on East Willow Street in the heart of Scottsboro, AL

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Toll Free:  1-800-259-5508


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