Microloans surging in Silicon Valley

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Associated Press

Posted on September 22, 2013 at 9:01 AM

Updated Sunday, Sep 22 at 11:01 AM

SAN JOSE, Calif. (AP) — A daycare provider needed cribs and high chairs. A coffee truck needed a generator. A couple renting party supplies needed to move into a storefront.

When these Silicon Valley small businesses needed cash, and fast, they didn't find help at a bank. They turned instead to a type of financing more commonly associated with buying a sewing machine for a Guatemalan tailor or a tractor for an African farmer.

Microlending, a decades old form of financing for the world's poorest, is now booming in Silicon Valley.

The region leads the country for microlending as a growing echelon of would-be businesspersons who can't qualify for traditional bank loans meets money from cash-rich techies and firms who want to donate in innovative ways.

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