What does this program do?
It provides loans and grants to Microenterprise Development Organizations (MDOs) to:

• To help microenterprises startup and growth through a Rural Microloan Revolving Fund.
• Provide training and technical assistance to microloan borrowers and micro entrepreneurs.

Who may apply for this program?
The following are eligible to be a Microenterprise Development Organization:

• Nonprofits
• Federally-recognized tribes
• Institutions of higher education

The following are eligible to apply for a loan from the MDO as an ultimate recipient:

• Businesses located in an eligible area with 10 or fewer full-time employees.

What is an eligible area?

• Rural areas outside a city or town with a population of fewer than 50,000 residents. Urbanized areas near a city of 50,000 or more may not be eligible.
• The borrower’s headquarters may be based within a larger city so long as the project service area is located in an eligible rural area.
• The lender may be located anywhere.

Check eligible addresses for Business Programs.

Are there other requirements?
Microenterprise Development Organizations must demonstrate experience in managing a Revolving Loan Fund, or:

• Certify that it or its employees have received education and training from a qualified microenterprise development training entity so that the applicant has the capacity to manage such a revolving loan fund.
• Demonstrate that it is actively and successfully participating as an intermediary lender in good standing under the U.S. Small Business Administration (SBA) Microloan Program or other similar loan programs as determined by the Administrator.

What kind of funding is available?

• Grants are available to provide technical assistance to rural micro-entrepreneurs or microenterprises, up to $205,000 annually. Funding at the requested level is not guaranteed, and at least 15 percent matching funds are required.
• Loans of $50,000 to $500,000 may be used for establishing a Rural Microloan Revolving Fund managed by the Microenterprise Development Organization. Total aggregate debt is capped at $2.5 million.

What are the loan terms?

• Maximum term is 20 years
• Two-year payment deferral
• Must establish a loan loss reserve fund

What terms are required on loans to ultimate recipients?

• Up to $50,000
• Fixed interest rate
• Limited to 75 percent of project cost

How may the funds be used?
Microlenders may make microloans for qualified business activities and expenses including, but not limited to:

• Working capital
• Debt refinancing
• Purchasing equipment and supplies
• Improving real estate