When starting as an entrepreneur for a new startup it can be quite overwhelming. When starting as a minority it can add a whole another dimension to survival and other adaptations. However, when looking for funding it is definitely in your favor with many benefits.
Minorities and Socio-Economic Class
Your background can really benefit you in this area if you come from a low income area, a woman or single mother, or different race.
Apparently minorities get a break in this area because research has told us that minorities simply do not have access to credit as the majority and also get denied more when applying. According to the Institute of Government & Public Affairs on lending in Chicago, even after taking into account such things as credit worthiness; gender and race have a dramatic impact on access to small business loans and size of the credit line being desired.
Small Business Funding
So what are the small business loan options specifically for women and minorities? There are a couple of options available but the borrower needs to have solid credit and most likely some significant collateral for their business. There are significant breaks after the application has been reviewed and approved but simply if you have bad credit it does not matter what bathroom you go to or where your forefathers came from.
Small Business Loans
The US Small Business Administration is a good route to go for women and minorities if a loan is what you have decided to purse for your venture. The paved road for investing is usually to contact the bank you have already laid the groundwork with and apply through the SBA 7(a) or 504 loan program. This program does not actually provide the funds but actually makes sure lenders have money allocated for minorities and people in lesser deserved situations. The SBA also has a Microlender program for loans under $50000 and a Woman owned business program that provides resources for borrowers.
Grant opportunities can be more difficult to get if you are truly a startup and not an established business. Obviously it would be a great thing if you did not have to make payments and was able to secure funds that you did not have to pay back.
Grant Funding for Minorities
- Minority Business Development Agency– is an agency of the U.S. Department of Commerce that promotes the growth of minority-owned business through the mobilization and advancement of public and private sector programs, policy, and research.
- National Minority Development Supplier Council– is the global leader in advancing business opportunities for certified Asian, Black, Hispanic and Native American businesses and also includes access to the Business Consortium fund that offers different options of funding programs to minorities.
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Grant Funding for Women
- Applying to the Amber Grant is quite easy and requires little paperwork compared to contemporary funding applications. The Amber Grant awards $500-$2500 dollars to young female entrepreneurs to fulfill their dreams of starting their own business.
- Halstead Bead Incorporated– This grant is offered to females that want to start their own jewelry business and every year they offer $6000 in cash and supplies to go towards the winner’s future endeavor.
Grant Funding For Rural Areas
- Operation Hope for Small Business Empowerment Program– This program helps people and normally minorities in low socioeconomic areas to find help with financing and other related resources. They are known as a non-profit private banker for the working poor.
- Rural Business Development Grants– Grants range from $10000 to $500000 and they provide technical assistance, training, and other activities related to leading to the development or expansion of small and emerging businesses in rural areas.