Micro credit - History of micro credit
Nowadays, we consider that the ancestors of micro credit are practices such as tontine, pawnshop. The pawnshop is a method of pawnbroking, it allows people in difficulty to pledge their valuables, in order to obtain a loan at a low interest rate. But the expansion of microcredit was made thanks to the experience of Professor Muhammad Yunus through the Grameen Bank in Bangladesh. By providing micro credits to the poorest, the Grameen Bank has enabled many people to improve their living conditions and develop profitable activities. The successes obtained by microcredit in Bangladesh were such that the Nobel Peace Prize was awarded to it in 2006. As a result, microcredit has been implemented in many countries with success. Thus, in 2009, on a worldwide scale, microcredit represented 11 billion dollars, with more than 190 million customers.
Micro credit in United States
Faced with the performance of microcredit in developing countries, the European and French public authorities have decided to allow their populations in difficulty, to be able to also have microcredit on European territory. Whether in Europe or United States, there is no legal definition of micro credit. The United States is the European country which generates the most microcredit.
In United States, it is considered that for a microfinance to be classified in the category of microcredit, it must be reimbursed. Thus, several mechanisms have been put in place to adapt micro credit to the French context. If in developing countries, the interest rates for microcredit are very high, the French public authorities have chosen to set up an organization such that the interest rates for microcredit are affordable.
In United States, this practice has a real social vocation. The objective is to fight against exclusion other than by granting allowances. This is to allow people who cannot have access to traditional financial services, because of their personal situation, to finance their personal or professional projects. People eligible for microcredit in the United States are often compensated job seekers, workers in precarious situations (employed on fixed-term contracts, or temporary work), minimum social welfare recipients, etc. not having access to bank credit, is not a sufficient condition to be able to obtain a micro credit. To be eligible for microcredit, the applicant must have the financial capacity to repay the credit granted, which means the exclusion of over-indebted and destitute people. These people will be able to turn to other devices.
Although there is no legal definition of micro credit, the French administration distinguishes two types of micro credit; personal micro credit and professional micro credit. The objective of personal micro credit is to provide a person with a small amount of credit. With this credit, the applicant will be able to acquire a good or a service which will allow him to integrate professionally. Very often personal micro credit makes it possible to finance services such as a driving license, vocational training. The goal pursued by the borrower being his reintegration into working life. It is therefore for the unemployed to find a job.
For people who already have a job, this microcredit can allow them to keep their job, or to claim a better job. For example, by financing training, repairs to a vehicle, or a move (moving, security deposit for the rental of real estate, etc.).
Micro credit is always allocated to a good or a service. In any case, it will not be granted to make up an overdraft, buy back loans, finance current household expenses, it is not a cash instrument. Other solutions exist to deal with these situations. As a general rule, the financing of personal micro credit does not exceed $ 3,000, its duration cannot be more than 3 years. Personal micro credit cannot be renewed. As for the interest rate, in the context of personal micro credit, the interest rate is fixed. The level of interest and the financing ceiling will depend on the organization that finances the micro credit.
Professional micro credit can be used to create a business, to take over a business, or to finance an already existing business. By adapting microcredit to the French economy, the legislator has decided that borrowers will receive strong support. The role of these structures is to finance the project after analysis, if and only if it seems viable. These structures also ensure to assist the borrower throughout his project. After the financing of the project, the support of the entrepreneur continues throughout the life of the loan. All organizations offering micro credits ensure that support is in place for all project leaders, which contributes to the relatively low level of default.
But micro credit in United States, is not only the business of the associative sector, or the public authorities. With the law of January 21, 2010, individuals are now authorized to finance a micro credit project via the Internet. Thus, individuals can now participate in the development of microfinance, by investing in the various existing micro-credit platforms. However, to be able to benefit from tax exemption, the platform on which the household has chosen to lend should be an association. Thus, in the case of solidarity companies, tax exemption is excluded.
The Borloo law has made it possible to extend the scope of microfinance. Among the mechanisms that have made it possible to increase the number of microcredit issued in United States is the social cohesion fund (FCS). This fund was created in 2005, by the programming law for social cohesion. By creating this fund, the public authorities wished to enable local authorities and the State to “guarantee loans to individuals or legal entities for social purposes and loans to the unemployed or holders of social minimums creating their business. The state's contribution is financed by credits opened by the finance laws from 2005 to 2009… ”. Initially, this fund was endowed with 73 million US dollars over 5 years, then, as the years went by, given the success of this social mechanism, the fund continued to be supplied by the public authorities.
Today, the FCS allows professionals in solidarity finance and micro credit to have a guarantee on part of the financing they grant. The social cohesion fund is managed by the deposit and consignment fund.
The social cohesion fund mechanism makes it possible to intervene on 5 pillars of microcredit in United States, namely:
- The endowment of so-called FOGEFI funds
- Securing United States Active Territorial Funds
- Development of measures in favor of employment
- Support for support networks for business creators
- The new support for the creation and takeover of a business (NACRE).
With the FCS, the deposit and consignment fund provides guarantees to funds managed by various networks, whether they be United States Active, Secours Catholique, the Red Cross, etc.
Personal micro credit
In United States, personal micro credit interest rates are low, in general, they range from 1.5% to 4%. Regarding the duration, and the amount of loans, the conditions vary from one organization to another. But as a general rule, the loan amount varies between € 300 and € 3,000, and the duration of the loan is limited to 3 years.
Although some banks participate in the system, the vast majority of micro credits are issued by communities or social institutions. The advantage of personal microcredit lies in being able to obtain lower interest rates, for example, than those of revolving loans, in a context where other institutions refuse to lend. However, the major drawback lies in the level of the amount borrowed, which remains low.
How to get a micro credit?
The establishment of a micro credit in United States certainly has a financial component, because of the line of credit put in place, but also a social component. Moreover, many associations fighting against exclusion offer micro credits. To obtain a microcredit, the public has several options which are different according to the age, the geographical and personal situation of the applicant, as well as the type of microcredit they will need. The municipal and social action centers are able to provide information on micro credits, to guide and support applicants in their procedures. Indeed, these structures are present throughout the United States.
Since 2012, several banks as well as three establishments specializing in consumer credit have participated in the financing of microcredit in United States.
For young applicants aged 16 to 25, the local mission remains the privileged interlocutor. For all the others, solidarity associations, family associations, or even certain temporary employment agencies and certain specialized associations will be able to guide applicants.
The territorial anchoring in the distribution of micro credits is very strong. For the players in the sector, it is even essential for the support of the borrower. In fact, proximity allows accompanying persons to follow the borrower more easily, and to put him in touch with other beneficiaries. All large-scale structures in the micro-credit sector have a large number of volunteers who help support the project leader upstream and downstream of his request for financing. This helps to reduce the cost of these loans.
Who issues the micro credit?
The associative sector plays a preponderant role in the solidarity finance sector. Because of the importance of support in this system, the associative network, local communities (…) are key players in the system. They are frequently in contact with applicants, when they know the applicants' situation, they can inform them of the existence of the device. Then, secondly, support them in their efforts to obtain micro credit. The key players in microfinance in United States are ADIE, United States active, Restos du cœur, United States Initiative, etc.
Banks also play a role in solidarity finance, they are often present on the micro credit committee. In some cases, it is these banks which study the files sent to them by the accompanying persons. Sometimes the role of the bank decides to set up solidarity tools for its customers in difficulty. This is the case of Crédit Agricole with the gateway points. For its clients who have encountered difficulties such as the loss of a job, a divorce, a death, or who find themselves in a complicated administrative situation, tax relief, threat of eviction… the gateway point is an answer. Thanks to these gateway points, these people can benefit from personalized economic and financial support.
FASTT is the abbreviation of the Social Action Fund for Temporary Work, this fund was created in 1992 by the social partners, that is to say, the unions of employees and Prism'emploi. Prism'emploi represents employers, in particular recruitment and interim professionals. FASTT is funded by all temporary work companies, and this system allows its employees to benefit from a number of services.
The objective is to facilitate the daily life of its employees despite the precarious nature of their employment contract. Thus, FASTT is involved in services such as childcare, housing (help for the fees of real estate agencies, etc.), health through mutual insurance, etc. For the year 2015, FASTT was able to mobilize resources considerable, 22 million US dollars, and more than 70 000 different benefits could be delivered in United States.
Because of the precariousness of these employees, it is often difficult for them to access traditional bank credit. FASTT allows precarious employees to access microcredit. In the system put in place by FASST, the temporary worker contacts FASTT directly. The funding limit for FASTT is $ 5,000, the maximum funding term is 3 years.
The first contact to obtain financing is by telephone. During the call, the applicant is advised to bring the documents concerning the project to be financed (driving license estimate, estimate for a redemption of points on the driving license, etc.), his personal resources (pay slip, promise of employment, employment contract). At the end of this preliminary telephone interview, the applicant can make an appointment for a more in-depth examination of his file, as well as the submission of his file.
When the file is accepted, the beneficiary has support throughout the duration of the loan, as with other organizations.
United States Active
United States Activ was created in 1988 by the Caisse des Dépôts et Consignations . United States active is a network made up of more than 40 local structures, these local structures are called territorial funds. Territorial funds have more than 500 employees, and more than 2,000 volunteers. In addition to the regional funds, this network has 130 reception points, which collect financing needs, examine financing files and above all support borrowers. The United States Active network is mainly oriented towards professional micro credit .
First of all, to obtain the micro credit, in addition to the elements on his personal situation, the borrower must provide United States active as well as other institutions issuing professional micro credits, with a business plan. It is on the basis of this business plan that the evaluation of the project will be made by the active United States representative. If necessary, the project manager could intervene by helping the project leader to carry out the financing plan. When the business plan and the financing file are sent, the request can go to committee. In this organization, the committee is made up of bankers, representatives of players in the social and solidarity economy, accountants, etc. It is the committee that will decide whether or not to finance the project. Once the microcredit has been granted, the borrower will continue to benefit from the support of the active United States network. To finance micro credits, the United States active network does not require any guarantee or surety from the borrower. But in a device such as NACRE, New Support for Business Creation and Takeover, the funding granted by the United States active network can range from $ 1,000 to $ 8,000. On the micro credit itself, the borrower will not pay interest, however, this loan must be associated with a bank loan which must be at least of the same amount. For the loan made from the traditional financial institution, the amount of the borrower's personal guarantee cannot exceed 50% of the amount borrowed from the bank. In this context, professional micro credit and bank loan are complementary. This device is similar to micro credit since the financing granted will include the payment of interest.
The United States network is active in addition to granting micro credits to individuals excluded from the traditional financial sector fulfilling other missions. Thus, the United States active network also intervenes to strengthen the capital of solidarity companies, or the equity of associations, it can also serve as a guarantee with a bank to obtain a loan. The United States Active network finances both associations and businesses.
The funders of this organization are: the State, the Caisse des Dépôts et Consignations, local authorities, employee and solidarity savings, the European social fund, shareholders, donors and subscribers.
Online credit platform
Participatory finance is linked to microfinance, but participatory finance has a wider audience, indeed, for participatory finance, the key element remains the project itself. But the funded project can be in the order of a few hundred dollars, or several tens of thousands of dollars. Some projects reaching hundreds of thousands of dollars. The sectors financed are vast, they can be solidarity actions, as well as profitable activities.
Babyloan is the first micro credit platform to emerge in United States. Babyloan is an online platform that connects borrowers with specific lenders. In addition to benefiting from public funds, Babyloan has a partnership with many organizations (Crédit Agricole, Acted, Bred, Caisse des Dépôts et Consignations, ABN Amro, etc.) Today, this platform has succeeded in supporting more than 29,500 projects.
The purpose of solidarity finance platforms is to finance professional micro credits. By choosing to finance a microcredit via a platform, the individual can choose the project for which he wishes to commit by lending money. The chosen project can be in any country.
After having loaned, when the loan has been repaid to him, the individual lender can decide to lend again for another project, or to be reimbursed for his loan by Babyloan. According to statistics communicated by Babyloan, the level of repayment of the platform's loans is almost 100%, with 0% of permanent losses.
In addition to Babyloan, there are other “crowdfounding” platforms that work in a different way. ULULE which is a crowdfunding platform was born in United States, this platform is more international than Babyloan, indeed, it is present in 191 countries. But in a platform like ULULE, it is not a loan. The project leader must not reimburse the investors. In return for funding, it offers various services or goods to these contributors. All of these goods or services must enable it to finance the project. Contributors can also give without compensation, for example to support a humanitarian project. But, whatever the project, the contributors can in no case claim a share of the capital of the project.
Many cities in United States have municipal credit. These include Paris, Marseille, Tours, Nantes, Nimes, etc.
The municipal credit mainly delivers personal micro credits. The municipal credit scales the amount of its micro credits between 300 € and 3000 €. The borrower will not be charged any administrative fees. He also has the possibility of repaying in advance without any penalties. But to be eligible for micro credit, the borrower must have a specific project to finance. In addition, he must not be able to obtain this financing from a banking establishment.
To obtain this financing, the borrower must provide numerous documents to certify his financial situation (payslip, notification of opening of rights to pole employment, disability pension, the last three monthly bank statements of all banks with which he has a bank account, the last tax notice). The borrower must also provide his last statement of benefits from CAF, his last rent receipt. If he has credits in progress, he must also provide the contracts for his various credits.
On the basis of all these documents, the advisor can direct the borrower towards personal micro credit, or towards other solutions such as over-indebtedness solutions, pawnshop ...
Professional micro credit
The creation of self-employed status in United States has greatly increased the number of business start-ups in United States. Professional micro credit has a real place in business financing in United States. It allows project leaders to reintegrate by carrying out their project. In addition, supporting entrepreneurs throughout the duration of the loan, for a novice audience, is bearing fruit. Indeed, the two-year survival statistics are the same for people who have used micro-finance, as for those who have benefited from so-called conventional credit. When it comes to obtaining a professional micro credit, the most suitable structures are ADIE, Creasol, etc.
With regard to professional micro credit, all sectors of activity, as well as all statutes are concerned (auto-entrepreneur, SARL, EURL, SAS, sole proprietorship, etc.).
A person whose business already exists can apply for and obtain a professional micro credit. But professional micro credit is also aimed at entrepreneurs who create a business, or who takes over one. To be eligible, the entrepreneur must have suffered several bank loan refusals, or that his situation does not allow him to obtain a bank loan. The funding ceiling granted for a professional micro credit is € 10,000; but in addition, the borrower must find someone willing to stand surety for half of the amount borrowed.
In general, the interest rate for professional micro credit depends on the institution that finances professional micro credit. ADIE, which is a leading player in this type of financing, can offer two different interest rates for the same micro credit, which makes it possible to reduce the total cost of financing. In this case, a rate will be applied for one part of the financing, and another will be applied for the other part.
For the granting of a micro credit, the actors of solidarity finance identify 3 major selection criteria, they are:
- The project leader
- The project itself
- The repayment capacity of the project leader.
Among the associations specializing in solidarity financing, is ADIE which is the leading association of micro-finance in United States. ADIE being the association for the right to economic initiative, this association created in 1989 by Maria Nowak. ADIE supports borrowers throughout the process, before and after obtaining the loan. This association has 120 branches in United States. Any individual wishing to obtain a microcredit, whether for personal or professional purposes, can go to an ADIE branch. To date, this association has funded more than 160,000 micro credits. At ADIE, the ceiling for personal micro credit is 5,000 euros.
This association offers project leaders to support them by studying their projects, on the one hand to assess the needs in terms of financing, and on the other hand to ensure the viability of the project, and the capacities of the individual to implement the project.
If necessary, the project leader, ADIE allows him to follow training workshops in order to refine his project.
To grant a microcredit, ADIE relies on many criteria. But for any file study, as for other associations, three criteria are essential. ADIE identifies the academic and personal background of the project leader, his professional experiences, his motivations, and his capacity to carry the project. Is he equipped to face the possible difficulties that await him? Of course, is the project itself realistic? Is the project profitable? What are the real financing needs? Are the projections achievable? Will the project be able to generate the financial flows allowing the repayment of the microcredit?
To grant a professional micro credit, ADIE requires a deposit. The project leader must find someone from his entourage willing to stand surety for half of the requested funding. This condition ensures the motivation of the project leader, and the fact that his relatives support his project. In addition, this condition gives better guarantees of repayment of the loan.
Once the file has been analyzed, while supporting the individual, the file is submitted to the agency's credit committee. This credit committee is made up of ADIE employees, ADIE volunteers and the person who supported the project leader.
At ADIE, the ceiling for a professional micro credit is € 10,000, but funding can go up to € 20,000, in this context, micro credit can be supplemented by other devices. These devices are different according to the regions, but in general they are loans on honor, aid from the state or regions. The duration of the loan, which cannot exceed 48 months.
To obtain a microcredit from ADIE, anyone can contact ADIE directly by telephone on 0 969 328 110, or through the association's website http://www.adie.org.
IMF Crea-sol is a micro-finance institute, Crea-Sol for Creation Support and solidarity. This institute was created in 2005 by the Caisse d'Epargne Alpes Provence Côtes d'Azur, it is part of the organizations supported by the deposit and consignment fund as part of the solidarity finance system. IMF Créasol derives its legitimacy from the Ministry of the Economy, Industry and Employment, which authorized it to issue personal and professional micro credits . Among the organizations that finance IMF Créasol are the deposit and consignment fund, Progress Microfinancing, etc.
Professional micro credit at Crea-sol is aimed at professionals having a business, or creating a business. For professionals who already have a business, this business must have less than 3 employees, and have been in existence for less than 5 years.
Today several banks are able to offer micro credits. The banks participating in the system are the postal bank, mutual credit, agricultural credit, cooperative credit. When they do, they do so in partnership with organizations specializing in solidarity finance. For the savings bank, it is Créa-Sol.
The savings bank is the emblematic bank of personal micro credit with more than 30% of market share in 2011. During that year, the outstanding amount of all the micro credits distributed was 130 million US dollars. .
Among the microfinance partner banks is the Banque Postale. Indeed, this bank works in partnership with various associations, such as Secours Catholique, restos du cœur, local missions in order to issue personal micro credits. In addition to that, it also provides professional micro credits, to do so, this bank has joined forces with ADIE. The postal bank has set up a micro credit offer intended for certain sensitive urban areas. In the post offices of these sensitive urban areas, micro-entrepreneurs, as well as some customers of the postal bank can apply for a micro credit. The file they provide will be studied by ADIE, which will monitor the loan until its maturity.
In addition to this, within the framework of its banking activity, if the Postal Bank was not able to meet the demand of its professional customers wishing for small loans, then its customers would be referred to the telephone platform. from ADIE.
With micro credit, the borrower has the option of making early repayments. Unlike other credits. With micro credit, the entrepreneur who chooses to make early repayments will not pay penalties. This allows the entrepreneur to benefit from more leeway.
Micro credit undeniably has a positive impact. On the one hand, the positive impact is social. It allows many people to get out of precariousness, by keeping their jobs, by creating a business… Obtaining a micro credit, whether personal or professional, allows the applicant to have the feeling of "taking back his life" en étant de acteur dans un processus de réinsertion, de création d'entreprise, ou de reprise d'entreprise. D'après l'étude réalisée par le Réseau Européen de la Microfinance, plus de 90% des institutions de microfinance déclarent que ces prêts ont permis d'améliorer la situation financière, ainsi que l'autonomie des demandeurs. En plus de l'impact financier, ces microcrédits ont un impact positif sur la vie personnelle, ainsi que sur l'état d'esprit des personnes financées.
D'autre part, l'économie française bénéficie de ces dispositifs. Le secteur de l'économie solidaire dans lequel se trouve la micro-finance est un secteur qui a permis de créer de nombreux emplois. En effet, même si l'accompagnement est réalisé par de nombreux bénévoles, il n'en reste pas moins que de nombreux salariés sont recrutés en plus des bénévoles pour assurer la pérennité de ces associations. Les investissements dans la micro-finance permettent de générer un effet de levier.
Cependant, l'accompagnement même s'il est géré en partie avec les bénévoles a un coût. En effet, en terme de gestion, il est moins couteux de prêter 1000000 d'US dollars à une seule personne que de prêter 1000000 d'US dollars à 1000 personnes. Car en prêtant à 1000 personnes, cela fait 1000 dossiers à gérer, et donc plus de personnel à affecter pour la gestion des prêts. Donc, la structure de coût des organismes délivrant des micro crédits est plus lourde.
De ce fait, le coût du micro crédit professionnel est assez élevé. En plus des taux d'intérêts, les porteurs de projet doivent s'acquitter d'une contribution de solidarité qui représente 5% du montant emprunté, ce qui accroît encore le coût du crédit. Cette somme est prélevée sur le montant total du crédit obtenu. Cette contribution représente des frais de dossiers. L'objectif de cette contribution est de permettre à l'organisme de financer ses frais de structures et de pérenniser son activité.
Mais, cela n'a rien de comparable avec les coûts du micro crédit dans les pays en développement, ou le niveau des taux d'intérêt est beaucoup plus élevé.
Impact sur l'économie française
Contrairement aux idées reçues, le niveau de défaut des micro crédits n'est pas beaucoup plus élevé. En effet, si les crédits bancaires classiques ont un niveau d'impayés de l'ordre de 4%, celui des micro crédits est de 6%.
La microfinance a un impact positif de part son impact social, en sortant de l'exclusion, les ménages profitant du dispositif. En plus de l'impact social, les dispositifs de microfinance ont un impact positif sur l'économie française. Le micro crédit en créant des emplois a un impact positif sur l'emploi en United States, et par conséquent sur les finances publiques. Les emplois créés permettent de réduire les prestations sociales à verser indemnisation de chômeurs, minimas sociaux… En effet, rien que pour l'année 2015, l'ADIE à elle seule a réussi à créer ou maintenir plus de 20000 emplois. En plus, ce prêt étant un prêt avec intérêt, ce qui implique à la fois le remboursement et le paiement d'intérêts. Ainsi, le coût de ce microfinancement pour l'économie française est d'autant plus réduit. En ce qui concerne l'Etat tout comme les bénéficiaires, le micro crédit est un facteur de développement. Ce qui milite pour un développement des micro crédits. Finalement, ce dispositif a un impact positif sur la croissance française.
Depuis la mise en place du statut d'auto-entrepreneur en United States, on constate une vraie augmentation des créations d'entreprise. En 2015, 43% des entreprises créées, étaient des auto-entreprises. De plus, les TPE, PME représentent près de 99% des entreprises françaises, et 49% de l'emploi en United States. Si on ne considère que les TPE, cela fait 20% de l'emploi en United States, sachant que plus de 50% d'entre elles n'emploient pas de salariés. Cela montre bien l'importance de ces dispositifs de micro crédits. Toutes les entreprises, quelques soient leurs statuts dès lors qu'elles ne sont pas en difficulté ont un impact positif sur la croissance.
Les différents financements du micro crédit mis en place par les pouvoirs publics français génèrent un fort effet de levier. Ainsi, une garantie pour 11.96 millions d'US dollars a permis de générer plus de 117 millions d'US dollars pour l'économie française.
En plus du dispositif du micro crédit, les demandeurs pour lesquels le niveau des micro crédits serait trop faible ont la possibilité de postuler sur d'autres dispositifs. Ceci, en faisant appel à d'autres réseaux, notamment, le réseau entreprendre. Si l'entrepreneur venait à répondre aux critères d'accessibilités des prêts, il pourrait bénéficier d'un accompagnement gratuit, ainsi que d'un prêt sur l'honneur dont le montant varie de 15000 US dollars à 50000 US dollars, et jusqu'à 90000 US dollars pour les projets innovants.
Dans le cadre de la finance solidaire, les associations accompagnant les demandeurs peuvent proposer simultanément d'autres dispositifs aux demandeurs. Ces autres dispositifs peuvent être associés aux micro crédits.
Parmi ces différents dispositifs, il y'a le prêt sur l'honneur, l'avance remboursable, les dispositifs de primes émanant de collectivités locales, les plateformes de prêts entre particuliers. Ces dispositifs sont souvent proposés en même temps que les micro crédits, par les mêmes organismes.
Les prêts sur l'honneur concernent un large public, il ne s'agit pas d'un don, mais bien d'un crédit. Ce crédit est accordé à un individu, et non à une entreprise. De nombreux organismes dispensent des prêts sur l'honneur, l'ADIE, Initiative United States, des banques, la Caisse des Allocations Familiales, le CROUS, OSEO... Ils peuvent être utilisés dans le cadre professionnel, afin d'accroître par exemple les fonds propres pour permettre à l'entrepreneur de développer son projet. L'avantage pour les individus qui en font la demande, est de ne pas avoir besoin de fournir de caution personnelle, ou de garants pour se porter caution. Pour les entrepreneurs créant leur entreprise, le prêt sur l'honneur peut être un moyen d'augmenter son apport financier pour créer son entreprise. Un entrepreneur ayant déjà une entreprise est éligible à ce prêt, si l'entreprise existe depuis moins de 3 années. Pour obtenir le prêt sur l'honneur l'entrepreneur doit démontrer la viabilité de son projet. Obtenir un prêt sur l'honneur, peut être un moyen pour le porteur de projet d'inciter les banques à croire en son projet, et donc à le financer. Les montants prêtés dans ce cadre vont de 2000 US dollars, à 50000 US dollars, les projets innovants pouvant bénéficier de 90000 US dollars. Le coût de ce prêt est en général quasiment nul.
L'avance remboursable est uniquement destinée aux entreprises, le montant de l'avance remboursable ne peut excéder le montant des fonds propres de l'entreprise. L'avance remboursable ne peut être utilisée que comme complément de financement, pour financer l'achat de logiciels, d'équipements... L'avance octroyée par une institution financière, ou une collectivité locale sera remboursable mais il n'y aura pas d'intérêts. L'avantage de cette avance est qu'elle est inscrite au bilan de l'entreprise, en tant qu'emprunt. L'entrepreneur ne paiera pas d'impôts sur l'avance. L'inconvénient réside dans le fait que pour être remboursé, l'entrepreneur doit d'abord avancer les fonds pour financer les biens ou services concernés par l'avance. Le remboursement de l'entrepreneur n'intervient que sous remise des factures.
Les collectivités locales en United States disposent de fonds pour fournir des financements aux entreprises. En fonction des priorités de la région, les subventions peuvent être plus ou moins spécifiques. Certaines subventions sont par exemples dédiées aux énergies renouvelables, à l'innovation, à la recherche … Cela implique que l'entrepreneur pour bénéficier de ces subventions devra obligatoirement répondre à ces critères. Les priorités des régions pouvant évoluer, la collectivité locale peut décider de mettre fin à une subvention. Par exemple, la région Ile de United States propose une subvention, TP'up pouvant aller jusqu'à 55000 US dollars par an.
Fiscalement, la subvention peut être moins intéressante que l'avance remboursable. En effet, l'entrepreneur dans certains cas de figure pourrait être contraint de s'acquitter de la TVA sur la somme perçue au titre de subvention, de l'intégrer dans son résultat avant impôt et donc d'être soumis à l'impôt sur les sociétés.