Micro-entrepreneurs generally begin at a very small level of business capitalization and often their micro-business income is supplemental to other income they are receiving. There are numerous examples of microentrepreneurs who have started part-time businesses and expanded them over a period of several years. In some cases, entrepreneurs received and paid off two, three, and four microloans, and then "graduated" to a bank loan.

What you should know about the Micro-lending Industry 

The Microloan Program was developed by the Small Business Administration (SBA) in 1992 to increase the availability of very small loans to small business borrowers. It achieved permanent status in 1997. The program uses nonprofit intermediaries to make loans to new and existing borrowers, and from 1993 through January 1998, accounted for 6,380 loans totaling more than $65 million. The best candidates are start-up companies with lower capital requirements and limited operating history. Micro-loan borrowers may benefit from the intermediary's expertise in business too. Range of funds typically available is $100 to a maximum of $25,000. The industry average loan size in the pass 4 years has been $10,900, with an average loan maturity of 37 months. But know the maximum term for a loan is six years. These funds may be used for working capital, inventory, supplies, furniture, fixtures, machinery and equipment.

Where to Look 

Go the your local SBA or economic development office and ask for a listing for micro-lenders in your area. Know that once you receive this listing that most of the micro-lenders have what they call "technical assistance programs" to assist you in fine tuning your skill of managing your business.