How to Get Business Loans for Minorities. A start up business rarely has the independent resources to get it off the ground. Most businesses have to look for small business loans. For minority entrepreneurs, there are additional services that can aid in the search for funding. These resources can be public or private, and are obtainable to every small minority startup business.
Items you will need
- Business plan
- Credit report
- Startup capital
Finding the Loan.
Start with the Small Business Administration or SBA. The SBA has many resources for people looking to start their own business, including minority business loans. The agency can assist you from creating a business plan to the grand opening. They also guarantee loans for all types of small businesses.
Try federal resources. The Minority Business Development Agency or MBDA provides valuable information for small business owners. The organization's site has links to state and local resources. It also has information on the process of starting a business and obtaining financing. There are even links to unconventional lenders for those who have flawed financial histories.
Check the nonprofits. There are nonprofit organizations who provide financing and assistance to minority entrepreneurs. You can find them through the MBDA.
Applying for a Loan.
Polish your business plan. Lenders will want to know the details pertaining to your business before they invest. They will ask questions on the product, marketability and plans for the loan proceeds. This information should be included in a good business plan.
Get a copy of your credit report. Check it for mistakes, and clean it up as much as possible. Your credit rating will play a role in the lender's decision and may also determine how much interest you're charged.
Gather your assets. The lender will want to see that you are personally invested in the business. They will want to see that you have capital, collateral or a guarantor. The SBA can help you with all of this.
Practice your pitch. According to "The Five C's of Credit Analysis," published by the MBDA, character is just as important as the capital. The lender must see that you have what it takes to grow a business into a success. They need to believe that you are trustworthy, responsible, and knowledgeable.
The SBA has many resources to help your with your business plan, including people who can give you feedback. They also have templates, so that you won't have to struggle over the basics. These services are free, so take advantage of them.