Micro Loan

What is a micro loan?

A micro loan, otherwise known as micro financing, is a small and unsecured loan that are typically are flexible, short-term, and offered to small businesses (SMEs) through lending platforms. The loan is used to provide cash support for various purposes such as covering costs, expanding, or boosting cash flow. 

Additionally, micro loans feature these key characteristics: 

• Shorter Repayment Terms: Micro loans tend to have shorter repayment terms (6 - 18 months) as they are designed for smaller, specific business needs.

• Flexible Eligibility Criteria: Instead of solely relying on credit history and collateral, some platforms may consider other factors like business potential and future cash flow for loan approval.

• Faster Application Processes: Platforms like Funding Societies often offer faster application processes compared to traditional institutions. This allows businesses to access funding more quickly to meet their financial needs.

Overall, micro loans can be a powerful tool for SMEs, enabling them to start or expand their businesses and contributing to economic development.