Businesses started by low-income individuals or people without credit histories are usually deemed unsuitable by bankers. And the less money you need, the harder it is to find a lender who's interested in investing time in your deal. A new Small Business Administration pilot program, however, could give business owners with restricted access to capital a better shot at borrowing small sums (anywhere up to $25,000). The so-called microloan program, launched this past summer, is aimed squarely at entrepreneurs who can't tap other sources.

In setting up this $15-million pilot program, the SBA decided to bypass banks and work exclusively through nonprofits such as community-development corporations. "Banks just aren't set up to make loans averaging less than $10,000," notes Mike Stamler, an SBA spokesman, "because of the amount of hands-on servicing these loans often take." The agency picked 35 nonprofits from around the country with prior experience initiating microloans and working closely with small borrowers.

"It's really an access-to-capital issue," says Ronald Phillips, president of Coastal Enterprises, in Wiscasset, Maine, one of the participating lenders. "We're hoping this program will make bankers more open to making small loans."

To find out if there's a microlender in your area, call your SBA district office, or the agency's "Answer Desk" at 800-827-5722. -- Bruce G. Posner