In the USA, microenterprises exist in almost every community, from construction businesses to restaurants. These micro-enterprises provide millions of families in rural areas with jobs and security towards a better life.
Many entrepreneurs have great business ideas but do not have the needed funds or financial help to make their ideas into reality.
According to recent research, most new businesses that employ more than 5 workers do not survive for more than 2 years, and only half survive at least 5 years. Microenterprise development helps these small businesses to survive.
The movement has grown in response to unemployment and poverty. A small business requiring only 5 employees and do not need more than $35 000 for a startup can apply for microenterprise development.
According to recent studies, there are more than 20 million microenterprises currently active in the US, providing roughly 16.5% of employment in the country. This is not including farm employment. The impact of the movement has greatly advanced the national economy, especially towards poorer individuals with good skills.
Most of these enterprise programs are managed by public entities and nonprofit organizations. The goal of these entities and organizations is to feed the community with economical growth by providing employment in the communities.
These organizations do not only provide financing solutions to small businesses but also offer technical support to local entrepreneurs in order to reach their goals in an easier way. In a lot of ways, microfinancing stands between the limited funds that the entrepreneur has and what the whole project would cost to get started.
Micro funds are available for many different needs in business, whether it being a startup or even an existing business needing a piece of machinery or help towards expanding their business.
The movement has helped many struggling individuals with microenterprises to survive and get through the recessions and the recent pandemic which saw many businesses close down or barely keeping their doors open.
Providing this development program towards poorer communities also helps to grow the economical side of these communities by creating more jobs and financial freedom towards normal living costs.
It provides microlending towards small businesses to ensure growth and success. These microloans can be used for any reasonable plan which will create a positive workflow towards a whole community. Nonprofit organizations contribute with microloans throughout the US.
Peer to Peer microfinancing is the most commonly used method for funding business ideas and struggling businesses where the owners do not have a good credit score or collateral. Another aspect of peer-to-peer microfinancing is that the business owners sometimes need less capital than the minimum amount the bank is willing to provide.