Small Business Loans for Minority Entrepreneurs

Getting small business loans for minority entrepreneurs can be a good way to save money on financing and get the money that you need to start a new business. If you are an entrepreneur and you are a minority, you may qualify for a small business loan. Here are a few things to consider about small business loans.

SBA Loans

If you are in a minority class, you may want to consider checking out the Small Business Administration. The Small Business Administration, or SBA, is a government agency that guarantees loans for small business owners. They do not lend the money directly, instead they work in tandem with other lenders. When you apply for a loan with an SBA lender and are approved, the SBA will stand behind that loan. This means that it reduces the amount of risk for the lender. Because of this, you can often qualify for a loan when you would ordinarily be unable to qualify.

The SBA does not have a specific program that is designed for minority business owners. However, they have a "color blind" policy that means they look at every application as if it were the same. This increases your odds of getting approval for a small business loan. 

SBA Business Development Program

Another resource that you might want to check out that is offered by the SBA is the 8(a) Business Development Program. This is a conference a program that provides training for new entrepreneurs. It also gives an opportunity to contract with government projects to increase business opportunities. 

Minority Business Development Agency

The Minority Business Development Agency or MBDA is a government agency that tries to help minority business owners. They also do not lend money directly, but they do have a network of resources for minority entrepreneurs. If you work with the MBDA, they can introduce you to local lending programs. Many times, these lenders have some great programs in place and are willing to lend you the money that you need at a low interest rate.

Ethnic-Specific Lending

Another option that you might want to look at is ethnic-specific lending avenues. Depending on what minority you fit into, there may be some options out there for you to consider that will provide you with an opportunity for a loan. For example, the United States Hispanic Chamber of Commerce has a program that is designed to provide loans to Hispanic entrepreneurs in the United States. Native Americans and African-Americans also have several lending programs out there that can be taken advantage of. Many of these programs have low interest rates and low down payment requirements. Some of them also have easier approval standards so that anyone with a low or mid-range credit score can still get approved for access to the money that they need.

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