If you are a woman or an ethnic minority, you may be entitled to funds earmarked for minority business development. Many businesses and government organizations allocate funds to lend to minority business owners.
The Minority Business Development Agency (MBDA) is the only federal agency created specifically to foster the establishment and growth of minority-owned businesses. MBDA provides funding for a network of Minority Business Development Centers (MBDCs), Native American Business Development Centers (NABDCs), and Business Resource Centers (BRCs) located throughout the country. The centers provide minority entrepreneurs with personalized assistance in writing business plans, marketing, management and technical assistance, and financial planning to secure adequate financing for business ventures.
If you need additional help putting together your loan application package, you can contact your local small business development corporation. These agencies often make loans to applicants who have been denied for regular bank loans. Learn more about What Lenders Look for Before Granting a Small Business Loan.
While the SBA does not offer grants to start or expand small businesses, it does guarantee loans of up to $250,000. Once you’ve been approved for an SBA-guaranteed loan, the next step is to find a lender that is approved by the SBA. Read about SBA Loan Key Requirements.
Almost any bank is a potential lender, although eligibility requirements vary among lending institutions. Of the banks SBA works with, Bank of America has been ranked as a top lender to minority groups.
Wells Fargo is another minority- and woman-friendly bank, having pledged to lend a billion dollars to African-American, Latino, and women-owned business. To qualify, you must be a profitable business, have been in business for at least two years, have good personal and business credit records, and not have declared bankruptcy in the past 10 years. Lines of credit can go from $5,000 to as much as $100,000.
Another option for business loans to minorities are small business investment companies (SBICs). These are privately owned and managed investment firms that offer venture capital and startup financing to small businesses. SBICs are licensed and regulated by the SBA. For more information about SBICs, visit the SBA’s SBIC Web site.