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CHICAGO (TheStreet) -- Microfinance is an economic concept that wins approval across party lines, whether you're a do-gooder type who wants to end Third World poverty or a free-marketer who believes in the transformative power of entrepreneurship. But it's a practice we associate with rural villages in Asia or Africa, where tiny loans help women produce local handcrafts or maybe open a small shop.

Now, however, microfinance has found a new, underserved market: the United States. With banks cracking down on risk, even well-established small businesses are finding it harder to get credit. And few lending institutions are willing to take a chance on startups or expansions of two- or three-person businesses, where the potential profit is minimal.

That's where microlenders see an opportunity. The most high-profile entry into the U.S. market is Grameen America, an offshoot of Bangladesh-based Grameen Bank, whose founder, Muhammad Yunus, won the Nobel Peace Prize for his work. Grameen America has offices in New York and Omaha and plans to expand across the country in the coming years.

Following the Grameen philosophy, the loans are tiny by traditional finance standards -- up to $1,500 -- and aimed at low-income entrepreneurs. Anyone who takes out a loan must agree to save a percentage of their weekly income and meet regularly with a group of other borrowers. (Loans are more likely to be repaid when there is social pressure to do so.)

While Grameen America will undoubtedly help nurture small businesses that otherwise would never get off the ground, it's unlikely to make much of a difference for established companies that are struggling. Like many microlenders, Grameen's mission is to help the poor become self-sufficient. Most American entrepreneurs -- though they may have seen their revenues crash over the past few years -- still don't fit such microlenders' low-income threshold.

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Community-based, nonprofit microlending institutions may be a better bet. While many are geared toward low-income borrowers or those in traditionally underserved minority groups, some are active in reinvigorating areas hard hit by the slowing economy. If you can make a strong case that your business will add jobs in your town, or offer a service that will make your community a more attractive place to live, you'll increase your chances of securing a loan.

The Western Massachusetts Enterprise Fund, for example, offers loans of between $5,000 and $300,000 to companies that increase employment or add to the quality of life in the towns it serves. Opportunity Fund, the largest microlender in California, gives loans of between $1,000 to $100,000 to small businesses; thanks to the advisory and support services offered to borrowers, clients have an 85% business survival rate and a loan repayment rate of 90%. Similar institutions are scattered across the U.S., and if you have strong ties in the community, a local institution may be most receptive to your pitch.

If you have a compelling business story, you might even have luck raising funds online., the website that allows users to lend to entrepreneurs in developing countries, recently set up a pilot program for U.S. businesses. At, a peer-to-peer lending website, would-be borrowers are ranked by creditworthiness and explain why they need a personal loan. While most borrowers are trying to pay off credit card debt or make home repairs, some small-business owners solicit loans there as well. (In the case of Prosper, your credit ranking is crucial: if the site ranks you an "A," you'll pay an interest rate of about 8% on the loan, while "D" borrowers get stuck with a rate of 30%).

Yes, it's a little like Internet dating: You've got to make potential borrowers like you and root for your success. Listings that show some personality are more likely to generate loans than ones that simply list the facts of your business. But whether you go online or turn to a local community-development organization, business owners do have options other than traditional bank financing. The key is to convince the people doing the lending that you're worth the risk.

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