What to know when getting a micro loan

Micro loans have helped many owners across the country expand their small businesses.
5:27 | 07/14/21

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Transcript for What to know when getting a micro loan
The program helping small business giving billions to help women secure special funding for the companies and be part of the American dream. Welcome. Reporter: Sheila black is a small business own with a big I started liha in 2013 on 125th street. I literally borrowed the table, grabbed two pieces of fabric and I was open for business. Reporter: In 2018 Sheila converted her streetside shop into a fashion boutique on wheels but struggled to get the small business loan she needed. So many women have been shut out of the financial mainstream and the traditional banks don't give them the opportunity when they don't have good credit and they don't have any classal. Reporter: It is a barrier the nonprofit grameen America is working to break. Offering $2 billion in micro loans, serving 137,000 women nationwide helping small business owners like Sheila thrive. What I'm most proud about liha is that it provides a way for me to live my dream and live independently. Yes, indeed. We have a pair of her beautiful, beautiful earrings right here. They are going home with me. Let's bring in now Bridgewater associates and founding member of grameen America, ray Dalio. I have been looking forward to talking to you about this. I know how passionate you are about the program. Can you ex-blaine to folks what exactly is a micro loan? It's an average of a $4500 loan that makes miracles happen. You saw Sheila. This is an intelligent clever woman who can give to her community and just needed a little bit of enablement and grameen has given away or lent $2 billion to such people on an average of about 4700 each. My god, that is fabulous, right? Right. It brings entrepreneurship and wonderful things to the community is this that was with a "B," billion and so explain about how the loan works. Billion. Well, they go through a process in which the person seeking the loan comes in, goes through a series of exercises and there's a little community of other people receivinghe loan and they sort of make the judgment of who are they going to give the first loan to because they believe that that person is going to be successful. And then they pick that and they build this little community and then they give that micro loan, that little loan that makes this magic happen and then they have that community and it pays back and it grows and 99% repayment rate. Wow. That's better than all the rich folks who are going to banks. They're not as reliable, 99% payment rate and think about this, for every dollar somebody donates to this, it lands -- it keeps going around and around and lends $12 over the next ten years and it keeps going. So it pays for it several. It makes all this wonderful thing happen. Wow. How can't you do it? So I would say if you're interested in supporting it, it's fabulous. Grameen America and also if you're interested in being one of these entrepreneurs with that little bit of help, go for it because it makes the world a better place. It's more the American dream really. I know and I love your passion. I love your passion for this. Okay, we heard from Sheila and now we're going to hear from Mitzi who owns a hair salon here in New York. What advice would you have for entrepreneurs pursuing short-term and long-term visions for their business? What's your advice, ray? Well, first of all, first of all, if -- when you're in a business it's not like going to a regular job in which you get a paycheck and do the same thing all the time. You have to be flexible and imaginative and then you have to make your passion and your work the same thing, like you're into it and it's a rewarding job that way and also you can't forget about the money part so you got to be practical so think about it. When covid comes along and you have to really readapt, you do that and that's what brings you, you know, the success and so that would be my advice, be flexible and imaginative, make your work and your passion the same thing and make sure you get the money part right. Yeah, and love the ride. I know you do. You got to love the ride that you're on in building a business. You got to love the ride and be adaptable. Yeah, and we saw a lot of people pivot after the -- during the pandemic. Ray Dalio, thank you and others for what you're doing to make a true difference for so many. You take care. Hope to see you again, ray. And for more information on the micro loans visit Graen America's website. Now to ginger in Washington.

This transcript has been automatically generated and may not be 100% accurate.

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