Not every business needs a large, long-term loan. In fact, many small business owners are turned away by traditional banks simply because the funding amount they’re seeking is considered too small to justify the bank’s time or risk. That leaves growing businesses stuck, needing capital, but not in six-figure chunks.
At CFG Merchant Solutions, we help fill that gap. Through flexible small-dollar funding options, often referred to as microloans, we support everyday business needs without the barriers commonly found in traditional lending.
What Is Microlending?
A microloan is a form of small business financing designed for lower funding amounts, typically under $100,000. Most microloans fall in the range of $10,000–$15,000 and are structured as short-term funding solutions, often repaid within 6 to 12 months.
Microloans are ideal for businesses that need quick access to working capital but don’t require (or qualify for) a large traditional loan. Unlike banks, alternative lenders like CFG Merchant Solutions take a broader view of your business, looking at cash flow, performance, and growth potential rather than just credit scores.
Why Traditional Banks Often Decline Small-Dollar Loans
Banks and institutional lenders are often hesitant to offer smaller loans for two main reasons:
- Perceived Risk: Early-stage and small businesses tend to experience fluctuating revenue, which banks often see as higher risk.
- Low Return on Investment: Smaller loan amounts generate less interest income, making them less attractive for traditional lenders to underwrite.
As a result, many qualified business owners are left without options—even when they have strong operations and clear growth plans.
Types of Microloan Uses
Microloans can be used in a variety of ways depending on where your business is headed.
Growth & Expansion Funding
If you’re adding a new service, expanding into a new location, or investing in marketing to reach more customers, a microloan can help fuel that next phase without overextending your finances.
Inventory Support
For retail, wholesale, and product-based businesses, microloans can help ensure shelves stay stocked, especially during busy or seasonal periods when demand spikes.
Emergency Working Capital
Unexpected equipment repairs, delayed receivables, or economic slowdowns happen. Microloans can provide fast access to capital when timing matters most.
At CFG Merchant Solutions, we focus on solutions that align with how your business actually operates, not one-size-fits-all financing.
How Microlending Works at CFG Merchant Solutions
Microlending is designed to be fast, flexible, and accessible.
Here’s what the process typically looks like:
- Complete a simple online application
- Share basic business information and funding needs
- Receive a funding decision, often within days
- Access capital to use for your business priorities
Funds can be used for equipment, payroll, inventory, marketing, or other operating expenses, giving you the freedom to deploy capital where it matters most.
Benefits of Microloans
Microloans open the door to financing for many businesses that don’t qualify for traditional loans.
Key advantages include:
- Accessible funding for newer or smaller businesses
- Faster approval compared to bank or SBA loans
- Opportunity to build business credit over time
- Shorter repayment terms with clear timelines
- More personalized guidance from alternative lenders
Because microloans are growth-focused, lenders often look beyond past credit challenges and place greater emphasis on where your business is headed.
Microloans also play an important role in expanding access to capital for underserved entrepreneurs, including women-owned and minority-owned businesses, who are statistically less likely to receive bank financing.
Potential Drawbacks to Consider
While microloans are useful, they aren’t perfect for every situation.
- Funding amounts are smaller than traditional loans
- Costs may be higher than bank financing
- Shorter terms mean higher periodic payments
- Missed payments can still impact your credit
If your business needs a large, long-term investment, such as purchasing real estate, a microloan may not be the right fit.
Is a Microloan Right for Your Business?
Microloans are best suited for businesses that:
- Need a smaller amount of capital
- Want fast access to funds
- Are investing in growth-related expenses
- Have limited traditional financing options
Before applying, consider:
- How much funding do you actually need
- How the funds will drive growth or stability
- Whether other financing options may offer better terms
How to Qualify for a Microloan with CFG Merchant Solutions
Our approach is centered on business performance and future potential—not rigid checklists.
While requirements vary, we generally look for:
- A clear use of funds tied to business growth
- Consistent revenue or cash flow
- Time in business beyond the startup phase
- A business owner committed to scaling responsibly
We believe funding should support momentum, not slow it down with unnecessary obstacles.
Microloan FAQs
What are examples of microloan uses?
Payroll, inventory purchases, equipment upgrades, marketing campaigns, emergency expenses, and short-term expansion initiatives.
What are the pros and cons of microloans?
Pros include fast access, flexibility, and accessibility. Cons include smaller funding amounts and higher costs compared to traditional bank loans.
What is the average microloan amount?
Most microloans range between $10,000 and $15,000, though amounts vary based on business performance and needs.