Fulfilling the dream of business ownership
Microenterprise Loan Program
The N.C. Microenterprise Loan Program works with individuals who have sound ideas for starting or expanding a small business but may not qualify for bank loans. The program has three components:
- Standard loans, which are available in amounts up to $25,000.
- Express loans, which are capped at $5,000. Loan decisions can be made within five business days.
- Green loans, which are designed to encourage entrepreneurs to adopt environmentally sustainable business practices. The limit for these loans is $25,000; qualified applicants may be eligible for a reduced interest rate.
All loans are offered in combination with business planning and technical assistance. We give special emphasis to serving rural, low-income, female and minority borrowers.
To apply, complete and submit a pre-application. The same application is used for all microenterprise loans. We'll walk you through the process from there.
Go to application (you must complete the pre-application prior to this step)
Frequently asked questions
What does microenterprise mean?
What makes this program special?
You'll work with me when my bank won't?
Can I get free money to start my business?
How much can I borrow?
Tell me more about standard loans.
Tell me more about express loans.
Tell me more about green loans.
How much interest do you charge?
Do I have to put up collateral?
How long will I have to pay you back?
Do I have to be incorporated to borrow money?
How do I know if I qualify?
Can I use the loan to start a new business?
Will you lend me money to buy a business or a franchise?
My credit's not great because of some past mistakes. Can I still borrow money?
What if I can't pay you back?
How long before I can get my money?
If I apply and you turn me down, will that show up on my credit record?
If I apply, who else will see it?
Does the Rural Center offer other programs to assist entrepreneurs?
How do I apply?
What does microenterprise mean?
Microenterprises are our smallest businesses, commonly called mom-and-pop businesses. Often, microenterprise is just one, self-employed person, and usually it will have no more than 10 employees.
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What makes this program special?
We work with people who have good ideas and sound character, but may have difficulty obtaining a loan from traditional sources. In addition, our most popular product — an express loan — can be approved within five business days. Program staff work one-on-one with potential borrowers to prepare loan applications based on the borrower's business plan, character and the local economy. Technical assistance is offered in partnerships with Small Business Centers at area community colleges or the Small Business and Technology Development Center of the UNC system.
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You'll work with me when my bank won't?
Often, we can. We do this by working closely with you and incorporating business assistance into the loan process.
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Can I get free money to start my business?
We offer business loans, not grants. We charge interest and expect the loan to be paid back on time. Generally, you’ll find that grants are available only for government agencies or nonprofits, not for private, for-profit businesses.
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How much can I borrow?
That varies. The maximum available through our program is $25,000. Express loans are capped at $5,000. If you already have a micro loan, you must pay it off in full before applying for a new loan.
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We can direct you to other programs and lenders. Among them, our North Carolina Small Business Credit Initiative is helping traditional lenders make more capital available for startups and expansions. Another program that can open doors is the Capital Access Network, a state initiative to connect small and medium-size businesses with capital opportunities. Other sources are listed here.
Tell me more about standard loans.
Standard loans may be issued for up to $25,000. Repayment terms range from three to five years. Loan decisions are generally made within 10 to 20 business days of receiving an application (the same application is used for all microenterprise loans). Requirements increase with the size of the loan amount.
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Tell me more about express loans.
Our most popular loan product, express loans may be issued for $500 to $5,000. Repayment terms range from one year to three years. Loan decisions are generally made within five business days of receiving a complete application (the same application is used for all microenterprise loans). Although the application process is abbreviated, you will still be expected to prove credit-worthiness. Requirements increase with the size of the loan amount.
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Tell me more about green loans.
The green micro loan is intended to encourage entrepreneurs to adopt environmentally sustainable business practices. Loans are available in amounts of up to $25,000. If your business qualifies, the interest rate on your loan will be the current prime rate.
Qualifiying green industries include, but are not limited to, water conservation, clean energy, waste reduction, recycling, organic and natural foods, building retrofitting, sustainable products and manufacturing, and sustainable agriculture.
How much interest do you charge?
The interest rate on standard and express loans is prime plus 4 percent. The interest rate on green loans is the current prime rate.
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Do I have to put up collateral?
Yes. Acceptable forms of collateral include a vehicle title, equipment, inventory or a deed of trust.
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How long will I have to pay you back?
The maximum loan term is five years. Your actual term will fall between one year and five years, depending on the amount of your loan.
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Do I have to be incorporated to borrow money?
No. We fund any legal, for-profit entity, and many of our borrowers are sole proprietors.
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How do I know if I qualify?
The only way to be sure is to apply. Our basic requirements are:
- You wish to start or expand a small business.
- Your business is located in one of the 85 rural counties of North Carolina.
- Your business has fewer than 10 full-time employees.
- You have a credit score of at least 575 with no outstanding judgments or liens.
- You're at least 18 years old.
- You're a U.S. citizen/permanent resident and resident of North Carolina.
- Your total project cost does not exceed $50,000.
- And, of course, you have to have a sound business idea.
Can I use the loan to start a new business?
Yes. Most of our loans go toward start-ups. We also fund existing businesses.
Will you lend me money to buy a business or a franchise?
This is an acceptable use of a micro loan, but with a qualification. Our loan cap is $25,000, and your total project can cost no more than $50,000.
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My credit's not great because of some past mistakes. Can I still borrow money?
We can work with you to improve your score. Before you're eligible for a loan, you'll have to get the score to at least 575 with no outstanding judgments or liens.
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What if I can't pay you back?
When you take out a loan, you are expected to pay it back in full, with interest. The collateral you put up is security against the possibility of default. If your cash is short, we can claim the collateral property. This is an added reason for you to consider carefully before taking out a loan and to work hard to make sure your business succeeds.
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How long before I can get my money?
The approval process for an express loan ($5,000 maximum) is five business days. Other loans generally require 10 to 20 business days for approval. Once approved, you should receive a check in about a week.
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If I apply and you turn me down, will that show up on my credit record?
No information will show up on your credit report except an inquiry for credit.
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If I apply, who else will see it?
All information contained in the pre-application and application will be kept strictly confidential and will not be used for any other purpose.
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Does the Rural Center offer other programs to assist entrepreneurs?
Yes. For laid-off workers, Project GATE or Growing America through Entrepreneurship holds potential. It offers business coaching and training to help you get a business off the ground. Young adults 18 to 30 interested in starting a business may receive specialized assistance through the New Generation Ventures program. The Institute for Rural Entrepreneurship also may be able to refer you to useful resources in your community.
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How do I apply?
You may apply to the Rural Center or work through one of our lending partners. The first step is to complete a pre-application. It will help us determine whether the Microenterprise Loan Program or another business finance option might best suit your needs. If a micro loan is a good option, we'll refer you to one of our 78 lending partners who will help you complete a full application. If you don't already have one, you'll also need to write a business plan. The Small Business Center Network of the N.C. Community College System offers business-planning guides for start-ups and established businesses. Other guides may also be found here.
Submit your pre-application to:
Carolyn Perry, Director
N.C. Microenterprise Loan Program
N.C. Rural Economic Development Center
4021 Carya Drive, Raleigh, NC 27610
Email: businessfinance@ncruralcenter.org
Phone: 919-250-4314
Fax: 919-250-4325
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