What is microfunding? A few years ago, I remember being shocked at the idea of people getting a $25 loan to start a business in an underdeveloped country. Twenty five dollars doesn’t seem a lot but microfinance became an instrumental tool that helped many start ups and businesses, energizing massive economies in Western countries.

International microlending followed two roads, one of investment, and the other as a humanitarian cause. Lenders around the world would loan small amounts through international organizations, which would distribute the money among small business owners and start-ups, sometimes expecting compensation and others just to provide someone with an opportunity.

Microlending proved to be a successful chance for all, with excellent repayment rates, and an injection of hope in poor economies where credit is not an option for people without assets. Kiva, for instance, works in 53 countries and has a lending capital of over $150 million. Kiva collects small amounts starting at $25 that become part of an investors’ pool for a selected borrower’s project. With an average of 35,000 lenders a week, Kiva reports a return rate of 98.93%.

Never saw it coming but now microfinance is booming in the United States. High unemployment rate and tightened bank requirements have created amazing opportunities, matching microlenders with people looking to start a small business.

Small business owners as job creators

Small business owners amount for the largest job creation in the United States –they generated 65 percent of net new jobs over the past 17 years. Here are some of the non-profit organizations out there that can be researched if looking for a loan not based on collateral, credit scores or past performance but your passion and dedication to your business:

KIVA They are “a non-profit organization with a mission to connect people through lending to alleviate poverty. Leveraging the internet and a worldwide network of microfinance institutions, Kiva lets individuals lend as little as $25 to help create opportunity around the world.” They envision “a world where all people – even in the most remote areas of the globe – hold the power to create opportunity for themselves and others.”

ACCION USA As a leader in U.S. microfinance, “ACCION USA is committed to bringing affordable small business loans to microentrepreneurs. ACCION USA has provided over $119 million in over 19,000 microloans since inception in 1991, helping to grow small businesses and strengthen the communities they serve.” (Website in English and Spanish)

ACCION International: With offices in Massachusetts and New York City –as well as other international offices- , Accion International is a “private, nonprofit organization with the mission of giving people the financial tools they need to work their way out of poverty. By providing ‘micro’ loans, business training and other financial services to poor men and women who start their own businesses, ACCION helps people work their way up the economic ladder, with dignity and pride.” (Website in English and Spanish)

BOC/Network The Business Outreach Center (BOC) Network is a “micro-enterprise/small business development organization with over a decade-long record of delivering customized business services to under-served entrepreneurs in New York City and, more recently, in Newark, New Jersey, as well as capacity-building services to organizations establishing and operating community and micro-enterprise development programs.”

Grameen Foundation United States: Partnering with a microfinance institution in the United States, Project Enterprise, their mission is to “support and develop entrepreneurs and small businesses in under-resourced communities in New York City. By providing access to business loans, business development services, and networking opportunities, Project Enterprise helps entrepreneurs increase their standard of living, create jobs for their communities, and build financial assets.”

REAP Based in Nebraska, the Rural Enterprise Assistance Project (REAP) is a “program of the Center for Rural Affairs focusing on small business development. REAP consists of four elements including: networking, business management training, credit (micro-loans) and technical assistance.”

Opportunity Fund is a not-for-profit social enterprise “helping thousands of California families build financial stability.  Our strategy combines microloans for small businesses, microsavings accounts, and community real estate financing. Since making our first loan in 1995, our team has deployed over $200 million into our communities.” (Website in English and Spanish)

You can also check the Small Business Administration Microloan Program for a microlending opportunity in your area. Lenders in this program might require some collateral and personal guarantee of the business owner.