Minority Business Loans and How to Get One
People often ask, what are minority business loans? Anyone you ask will probably give you a different definition. Every bank offers different lending products. Before applying, you have to do your research. This will help you to determine what product is right for you. The right product is out there for you. And these products can help you take your business to the next level.
The challenge with today’s lending market is the increased regulatory environment. Bank’s have been forced to tighten their standards. Banks are consolidating their loan products and putting a focus on specific loan products that are lower risk. This is one of the reasons why not all banks offer minority business loans. There are a number of different loan resources in the market today that are offered to minority businesses. These come from all levels of the government. These loans are offered to businesses at all stages of the business lifecycle.
The Small Business Association also offers different low-interest loans to qualifying business owners. These loans often go to woman or members of minority communities. The SBA strives to see small businesses in all different communities succeed.
Often minority business loans come with additional strings attached. They can require those who utilize this type of funding to partake in different learning opportunities. To take minority lending to the next level, some banks offer diversity lending programs. These programs are designed with minority-owned businesses in mind. This funding is meant to help grow their businesses.
What benefits do business development programs offer?
- One-to-one counseling is offered in a variety of ways. Often times business owners who have been through the process before will speak to the newer owner and serve as a mentor to them.
- Training and development workshops are offered to help business owners learn the important skills of running a business.
- Management and leadership training guides business owners to stronger relationships with their employees. Remember you are your own boss now, your employees are looking to you for guidance.
Not only are there minority business loans offered by banks but there are also grants available. These grants are often offered by nonprofits.
What grants are available to minority business owners?
There are several grant options on the market. These grants are for minority-owned businesses with longer histories, start-up businesses, and first-time business owners.
- USDA Grant
- The U.S. Department of Agriculture funds up to $150,000 to businesses.
- A requirement for this grant is the business must be in a rural community.
- This is known as the Rural Business Opportunity Grant.
- SBA Grant
- The SBA offers grants between $50,000 and $250,000 to small businesses (microenterprise organizations) that deliver services to entrepreneurs.
- This is known as the Program for Investment in Entrepreneurs Act.
- This type of grant is for both new and existing businesses.
- State Grants
- State grants will often depend on your business’ revenue stream to determine how much assistance you need.
- In some states if you earn a certain amount in revenue you no longer qualify for a grant.
- Typically, the maximum funding is $50,000.
- Amber Foundation Grant
- These grants are much smaller than the others on this list.
- They range from $500 to $1,500.
- These grants are available to women of all cultural groups.
- The funds can be used for expenses incurred in the start-up of a business.
If you have been turned down for minority business loans in the past, not to worry. We understand that receiving this type of funding can be hard. Every bank has different standards. This can make it confusing to know which bank’s guidelines you qualify for.
There are also other options out there in the market such as grants. And even if you are not approved for a grant, there are still business funding products out there. Your dream of operating your own business does not stop at being told no a few times.
One alternative lending product you may want to consider is a merchant cash advance. There are fewer strings attached than a traditional loan. You can get the cash you need in hand in just three short days. Our product can help you start to develop your business without all the hassle of a business loan. A merchant cash advance focuses on getting cash in your hands fast!
It doesn’t matter whether you have good credit or bad credit. If you are a minority business owner or not. If you have only been in business for a short period of time. All that matters to begin with is that you meet our minimum requirements to start the process. The requirements are simple, have you been in business for over six months? Do you do at least $10,000 a month in sales? If the answer is yes, then you are ready to apply for a Merchant Cash Advance today!