Microlending FAQs

What is microlending?

Community organizations and lenders offer microloans to start-up and expanding very small businesses whose owners do not qualify for traditional bank financing. The loans, generally under $50,000, are used for either working capital or investment in fixed assets.

Many major banks are not offering business loans under $250,000 because the underwriting costs fora microloan is about the same as for a $500,000 loan, with a lower rate of return.

CAMEO’s network of microlenders are filling this financing gap for California’s smallest businesses.

CAMEO’s Role

CAMEO has 32 members who are California microlenders.

CAMEO’s multi-faceted approach to expand microlending in California includes:

  • Expanding available loan capital;
  • Training on financial statements and loan referrals;
  • Streamlining the underwriting process with web-based platforms;
  • Providing options for loan loss reserves; and
  • Advocating for state and federal microfinance and business assistance programs.

Through these efforts we hope to build the loan pipeline, increase quality referrals, and expand the number of loans made. In January 2014, we introduced a new program at the Forum — The MicroLending Academy.

Information for Borrowers

Microlending FAQ
Where can I go to get a microloan?
Who does microlending? What types of organizations?
Who takes out a microloan?
Do I qualify for a loan?
How long is the loan term for a microloan?
What are the interest rates on microloans?

Information for Lenders

Microlending FAQ
Where do microlenders find their capital?
What makes microlenders and microloans different from banks and traditional loans?
Explain eligibility, underwriting, loan terms and interest rates.
What are the differences between international microfinance and microfinance in the U.S.?

Other Resources

  • California Financial Opportunities Roundtable (CalFOR) Handbook to Capital Access: Read more about how micro fits into the CalFORS effort on our websites.