In order for the economy to grow, each citizen has to be empowered in one way or another. Financial power is the root of a stable economy and without it definitely any country cannot thrive. Immigrants, Native Americans, and every other minority group should be given the same, if not better, chance to engage in entrepreneurship in order to sustain themselves. When this is done, there will be an increase in payment, as well as the collection of taxes, which will be reciprocated in the growth of the economy. This is the key to achieving stability.
In the US, however, minority groups have to some extent not been enjoying the business world due to one reason or another. This has made them lag behind. As a fact, though, 15 percent of all the businesses (about 30 million) owned in the US belong to minorities.
One of the challenges that the minority groups have been facing is access to capital to either start or expand their businesses. The procedure for getting approved sometimes requires a lot of documentation and this mostly discourages many of them to sharpen and make use of their entrepreneurial skills.
However, as of now, there are several avenues that have tried to bridge the gap of finance that exists by providing loans to minority-owned businesses. Here is a quick look at the types of loans for minority-owned businesses that any minority may apply to in order to get a quick loan to either start or expand their businesses.
The Black-Business Loan Fund (BBLF)
There is need to create a smooth path for all entrepreneurs with African origin when it comes to starting as well as expanding their business enterprises. This is the main reason why the Black business loan fund was launched. In the recent past, most African Americans have had it rough when it comes to access to capital and this has really been hindering their progress.
In order to qualify for this loan, first of all, one should have at least 51 percent of the total value of the business and the business should have been operational in the last two years. No collateral is needed for these types of loans though. You just need to make an application and that is all. There are two types of loans offered by the Black business loan fund; the direct loans up to a maximum of $100,000 as well as the loan guarantees that also go up to $100,000. If your business is African-American owned, then this could be one of the loans that you can quickly qualify for.
The SBA Community Advantage Loans
The Small Business Administration also plays a key role in ensuring that the minority groups in the US can access loans without necessarily have a huge figure in the balance sheet. This is appropriate for small businesses since most of them do not have an attractive balance in their accounts. Secondly, these community advantage loans do not need anyone to have collateral for the loan. The only thing that maybe could be a hindrance to some extent is the aspect of creditworthiness. The SBA demands that any applicant should not have bad credit.
However, most of the minority groups have good credit and can, therefore, qualify for this loan and boost their businesses. What is needed from you is to identify a lender who can offer you the amount of loan that you need and submit the relevant documents to the SBA or the lender may still take the documents on your behalf. It is actually faster to acquire this loan since the SBA guarantees the lender up to 85 percent of the total money borrowed. The minority-owned business owners can enjoy this type of loan from SBA at any time.
Minority-Owned Business Loans
This is also another great avenue that any minority can apply and get a business loan. The loan is offered by a non-governmental organization called Accion. This is an organization that is fully dedicated to cushioning all minorities regardless of their origin or race. This loan also is not restrictive and thus can be used to do whichever type of business that the borrower may want to engage in. On top of the loan, a minority-owned business loan from Accion comes with entrepreneurial guidelines meant to ensure that the borrower gets a certificate for their business and so on. Minorities can still benefit from the online workshops that this loan program comes with. If your business is African-American owned, Asian-owned Hispanic owned, Native American owned or any other minority group-owned, then a minority-owned business loan program from Accion will be of great benefit to you.
The Business Diversity Lending Program
This is one of the programs that has come to the rescue all the minority-owned businesses from any financial crisis. The aim of the program was ideally to help minority-owned businesses qualify for business loans with ease so as to grow their businesses. This loan is offered by Union bank and for one to qualify; he/she must fall under the category of the minority under the bank’s ethnicity and race category, have business that has been active for the last 2 years, run at least 51 percent of the business and borrow less than 2.5 million USD. This means that all Latinos, Hispanics, American Indian, Asian and African Americans can qualify for the business diversity lending program by Union bank. The requirements are easy to go with and do not demand most from any minority. All you need to do is to apply for the loan online, submit the credentials of your business and wait for the loan to come.
The National-African American Micro Business Loan Fund
Due to the fact that many African-Americans are unable to access traditional loans due to several reasons such as low credit ratings and so forth, the valley economic development center in conjunction with JPMorgan Chase came up with an idea on how to help African-Americans in terms of access to credit or loans. This type of loan is currently dealing with minority African-Americans who are currently living in New York, Chicago and Los Angeles but soon will expand to other areas. All African-Americans can easily access loans between $35,000 and $250,000.
The good thing about these loans is that they do not come with any type of strings attached. It is a flexible business loan that the borrower can use to either expand the business, buy machinery or any other issue that may be at hand. All that you need to do is to make an application for the loan online by filling in your basic details about yourself and the type of business that you intend to run or are currently running. On top of that, you will be required to state the amount of money that you want to borrow and the rest shall follow up.
Business and Industry Guarantee Loan Program
If you are a minority dwelling in rural areas, then you should not look for any other source of business financing other than the Business and Industry Guarantee Loan Program. This is a platform that does provide a government loan guarantee that any minority takes from the lenders. Once you approach a lender who can lend you credit, then fill the documents and present them to the rural development office. The interest rates for the loans are discussed and agreed upon between the lender and the borrower and this program plays no part when it comes to interest rate determination.
However, in order for anyone to qualify for this business loan, he/she has to be creditworthy to start with although the loan will be guaranteed via this program. The borrower must also have collateral that is at least equal to the amount of loan borrowed. It is also crucial to look for a lender who is regulated to avoid any complications with this loan program. Since this loan is guaranteed by the government, every lender will be ready to have a borrower and this is where borrowers need to cross-check and examine whether the lender in question is regulated.
The Hispanic Small Business Loans
The number of Hispanics in the US has been increasing day to day and this means that the number of businesses owned by the Hispanics is also going up. Therefore, the Hispanic community came together to ensure that their fellow brothers and sisters can prosper in the business world by offering soft loans to any Hispanic applicant. Balboa capital as owned and run by Hispanics, therefore, have created and provided a platform to ensure that money or rather capital is available to any Hispanic who wants to either start or expand their business.
Unlike other loans that involve a lot of paperwork and requirements, Balboa capital has waived out any of these complications. The application process is faster as well as the approval. All you need to do is to submit your application online by providing a few details and wait for the approval. That is how simple the process is. No hurdles if you are Hispanic when it comes to getting a business loan.
The ATNI Loan Fund
This is another non-profit community-based loan fund with an aim of supporting Native-American owned businesses to expand and reach their goals by providing quick and easier way to access funds conveniently. The good thing about the ATNI Loan Fund is that it can either give a borrower a full loan or at times act as an intermediary between the borrower and the financial institution. This community-based financier offers different types of business loans depending on the needs of the borrower.
They have direct loans without participation which means that if the financial institution is not available, the ATNI Loan Fund funds 100 percent of the business in the beginning till the enterprise becomes profitable and therefore creditworthy from other institutions. There is also a direct loan with participation whereby a certain amount of money is given by the bank. However, unlike other minority-owned businesses that do not have loan restrictions, the affiliated tribes of Northwest Indians revolving loan comes with certain restrictions in terms of how one can utilize the cash given.
Latino Economic Centre Loans
If you belong to the minority in Minnesota, then Latino Economic Development Centre will be of very much importance to you whenever you want to get a soft loan to expand your business. They offer different types of loans so as to meet different minorities’ preferences. For instance, there is a microenterprise loan that is meant to cater to those who want to engage in small business activities. There is also the cooperative type of loan which applies to those minorities who want to form a cooperative type of business. Moreover, there is also the community real estate development loan for the minorities who own or run a real estate type of business.
The requirements to get these loans include; a business plan, a financial statement of the business for the last two years, a credit history report as well as any other relevant documents if the borrower is running a partnership or a cooperative. Lastly, it would be crucial to know that their loans are restrictive in a way and thus the borrower has to specify how the loan shall be used or what it will be used for.
There are a lot of financial opportunities that most of the minorities are yet to explore. Many organizations are willing to give loans at low-interest rates to minority groups with the aim of improving their lives. The business loans are quickly accessible and do not have a lot of restrictions. It is upon the parties concerned to try and utilize all the loans for minority-owned businesses to expand and grow their businesses.
Also, consider grant opportunities for minority-owned businesses.