With banks continuing to keep a tight rein on credit, American small businesses and would-be entrepreneurs are increasingly turning to nonprofit lenders for financing, reports The Wall Street Journal.

Typically nonprofit lenders have focused on making small grants to entrepreneurs from impoverished neighborhoods in the United States and elsewhere, offering small capital injections at higher interest than banks but with more lenient screening and greater flexibility in repayment.

Kathy Ricci, executive director of the Utah Microenterprise Loan Fund, said the organization doubled its loan volume last year to $1.2-million. “We are seeing more people that perhaps a year ago could have gotten a bank loan,” she said.

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