Skip to main content

Minority Business Lending, 2018

Being a minority small business owner can be particularly challenging due to issues that other business owners don't face, like racial and gender discrimination, having low (or no) collateral and having a low credit scores. These factors definitely make it harder to finance a business. There are, however, resources that can help make financing your business easier, given these constraints.

Here are a few:

SBA Loans

While we have not been impressed with the outcome of their efforts focusing on African American businesses, the Small Business Administration (SBA) offers services and programs you need to know about if you are looking to start or fund a minority business. To begin with, SBA’s 8(a) Business Development program is focused on small businesses that are 51% or more owned and controlled by members of disadvantaged subgroups by ethnicity or race. The program offers a plethora of business support services, including financial assistance, business counseling, and mentoring. The SBA also has the Community Advantage Loan Programme which provides credit, management, and technical assistance to small businesses in underserved markets. Qualifying for this program, unlike traditional loan programs, is dependent on the amount of collateral held by or the balance sheet of the business. The program offers management and technical assistance and up to $250,000 in credit with a maximum interest rate of 6%. Business owners looking for smaller loan amounts should consider the SBA microloan program, which provides loans of $50,000 or less.

Private Financial Institutions and Loan Funds

Several private financial institutions and loan funds target minority entrepreneurs. For example, the Business Center for New Americans’ Microloan Program provides loans and microloans to small businesses who are unable to borrow from traditional lenders despite demonstrating an ability to repay a loan. Reasons for rejection can include too small loan amount or a low credit score . These loans range in size from $500 to a maximum of $50,000. The loan term can be for up to three years.

Another option is the Union Bank Business Diversity Lending program for people of Native Hawaiian, Pacific Islander, African American, Asian, American Indian, Alaskan Native, Hispanic or Latino descent. The program helps minority business owners meet financing requirements. The business must have been operating for two years and lending is not available to business with sales exceeding $25 million. The maximum loan amount is $2.5 million.

Online Lenders

This option is for owners with low credit or low capital who need quick short-term loans. Some examples of these include Kabbage, LoanBuilder and Fundbox. See:

https://www.fundera.com/business-loans/guides/minority-business-loans
https://fitsmallbusiness.com/small-business-loans-minorities/
https://www.lendgenius.com/blog/small-business-loans-for-minorities/
https://www.loanbuilder.com/
https://www.kabbage.com/how-it-works/qualifying/
https://www.merchantmaverick.com/best-kabbage-alternatives/

Grants

Grants represent a cheaper way to finance your business since they do not, in most cases, require repayment. While there are several grant programs targeting minority entrepreneurs, there is a lot of competition for them. Further, each grant has strict guidelines concerning eligibility and, upon succeeding, how the money can be spent.

This short guide indicates that there are a range of financing options for minority business owners. Review the data and the websites mentioned and choose the option(s) that suits you best..

Sources

https://www.inc.com/replacemeplease1456242678.html
https://www.minorityfinance.com

Popular posts from this blog

Maternal Health Financing Facility for Black Women: A Solution to an Urgent Problem

Maternal mortality is a significant issue in the United States, with Black women disproportionately affected. Research conducted by the Centers for Disease Control and Prevention (CDC) has shown that Black women are more likely to die from pregnancy-related causes than their white counterparts. However, the issue is not new, and despite the increasing amount of data available, the disparities have remained unaddressed for far too long.  Creative Investment Research (CIR) is among the organizations that believe there is a solution to the problem. Through our proposed impact investing vehicle , the Maternal Health Financing Facility for Black Women (MHFFBW), we aim to tackle the mortality gap and support Black women during childbirth, which will, in turn, benefit their communities. The Facility, based on legally binding financing agreements containing terms and conditions that direct resources to individuals and institutions capable of addressing supply-side conditions at the heart of

Projected Impact of Gun Laws on Corporate Profits in Texas

More Fortune 500 companies are located in Texas than in any other state. Texas successfully used low taxes and minimal regulations as bait to recruit companies like Tesla and Oracle. The state promoted these “advantages” in ads highlighting their “free-market” environment and criticizing the "tax and spend policies of liberal leadership" in Democrat-run states. Four million people migrated to Texas over the past ten years. Our economic models predict a reversal, however. State of Texas corporations on the Fortune 1000 list generate $2.2 trillion in revenue, $158 billion in profit. They have a market value of $3.8 trillion and employ 2.5 million people nationwide. We continue to believe this increased corporate presence in Texas imposes a tax on the nation as a whole. Texas allows anyone 21 or older to carry handguns without training or licenses, and maintains lower gun purchase age limits. Beyond the recent abortion bill, which allows people to sue those who "aid and abe

BRICS Summit 2023: Navigating the Transformation of Global Finance

Recent developments in the global financial landscape have captured the attention of the finance world, promising a new era of integration, transformation, and collaboration. Amidst the excitement, however, it is essential to acknowledge the formidable obstacles that stand in the way of realizing these ambitions. The 2023 BRICS Summit , slated to convene amidst this shifting landscape, is poised to be a significant juncture that could have profound implications for the future of international finance. The resurgence of Bitcoin, marked by an impressive, if smaller, year-to-date price surge, has underscored its enduring relevance. Similar concerns surround the exploration of central bank digital currencies (CBDCs). The UK's digital pound initiative, while forward-looking, raises questions about stability, security, and privacy and potential economic power imbalances. The notion of a BRICS digital currency, potentially extended to include several countries, reflects a desire to chall