According to the US Census report, the minority owned small businesses are growing with the ratio of 11.1 million in 2017 driving the US economy forward. However, they still don’t have the equal rights to get funding for new business opportunities. But thanks to alternative lenders, they took this responsibility and are providing funding options to minority owned businesses.
Some Interesting Facts about Minority-Owned Businesses
- Making up 15% of the 28 million small businesses
- Employing 5.9 million workers in US.
- $600 billion in revenues annually.
- Paying interest rates on average 32% higher than their white counterparts.
Funding Programs for Minority Owned Businesses
Here are some of the best business financing program for minority owned businesses helping them to grow by investing in new opportunities.
Minority Business Loans
If being a minority is creating problem in getting funding for your business, minority business loans from alternative lenders is the funding program that can help. This funding program is specifically designed for minority owned businesses in the US. This funding program from alternative lenders involve less stringent requirements. Alternative lenders are making the whole lending process easier for businesses with low credit score and less working capital. They also provide funding at the speed of opportunity.
The Small Business Administration (SBA) plays and important role in providing funding to minority owned businesses in US. They offer multiple resources for minority-owned businesses, which include;
- SBA Community Advantage Loans
- SBA Microloans
- SBA 8(a) Business Development Program
Community Development Financial Institution Loan (CDFI)
The CDFI is focused on providing resources to underprivileged businesses and people to get access to affordable business funding programs. This institution is backed by the US federal government helping businesses that are deprived in getting the funding from traditional lenders.
Minority Business Development Agency (MBDA)
The role of Minority Business Development Agency is to foster the growth and establishment of minority-owned businesses. The agency also provides small business resources and funding to promote the growth of minority owned businesses in the United States.
The agency also provide minority business owners with customized assistance in writing marketing strategies, business plans, management and technical assistance.
Traditional Bank Loan
Traditional bank loans are normally the first place normally small business owners turn to when they are seeking a business loan. For strong borrowers, there can be a lot of advantage to borrowing from a traditional business lender. But the only disadvantage is their long drawn out lending process, which could normally take even weeks or months.
- The owner must qualify as a minority
- Own and manage at least 51% of the business
- Annual sales of $20 million
- Been in business for at least two years
- Borrowing needs of less than $2.5 million
Minority business loans from traditional banks might be good, but they come at high rates and carries long-drawn out lending process. Therefore most of the minority owned business turned to alternative lenders that have flexible rates and terms. If you are an African-American, Hispanic or Asian-American and running a small business in US, a minority business loan can help you to cover your business expenses, cash flow as well as provide you the much needed growth funding.