Non-Traditional Lending Sources for Women- or Minority-Owned Businesses
The number of women- or minority-owned businesses is growing exponentially. However, the number of loans available for these business owners is not keeping up with this rapid growth. Knowing where to look for small business loans is critical for the continued growth and development of these businesses. While your local bank may have adequate loan options, consider investigating some of these non-traditional resources for your financing requirements.
Many of the loan options available from online lenders are similar to those offered by traditional lenders. The biggest advantage is more lenient loan requirements and a rapid loan approval process. Most online lenders tend to be more generous on collateral requirements and flexible with the terms of the loan. Although, it is important to keep in mind that for this flexibility and speed, you may pay a slightly higher interest rate. It is important to take the time to educate yourself on trending interest rates and loan terms.
Microloans are smaller loans offered primarily to women- and minority-owned small businesses. Loan amounts can range from $5,000 to less than $50,000. A variety of lenders offer microloan options, so it is important to find one that best matches your needs. Even non-profit agencies are developing these flexible funding options if your business meets its philanthropical requirements.
Small Business Administration
SBA offers numerous assistance options geared toward women- and minority-owned businesses. From networking centers to small business loans, this is a great resource for any business-related questions you may have. As a certified Women-Owned Business, you have access to all of their loan options, including 7(a), 504 and microloans. In addition, you can gain access to their Federal Contracting Program. Keep in mind that when applying for loans with SBA, the loan approval process can be longer than with traditional lenders.
Small Business Grants
Many government agencies, non-profit enterprises, and private businesses are developing grant programs for women- and minority-owned businesses. You may also consider contacting your state and local chamber of commerce for additional sources of grants. Qualifying for these grants can be a challenging process. The application process can be daunting, but receiving funding with no conditions to repay is worth the effort.
It can take some time to identify the best small business loans for your business needs. With some persistence, networking and creativity, you can obtain financing that allows you to develop your small business into a thriving enterprise.