Starting a business is can be very different for anyone of any ethnicity. However, the plight that many minority women face when attempting to start and grow a small business is often multiplied times ten in comparison to non-minorities. There are many factors that can contribute to the greater level of difficulty minority women entrepreneurs face including lack of support and resources, lack of industry connections, and most importantly lack of startup capital. Capital can seem very elusive for minority women entrepreneurs who don’t know about the programs available specifically for them (and where to go to take advantage of those programs). There are many organizations that help minority women entrepreneurs fund and grow successful small businesses and most of those organizations are microloan lenders.
For example, the microloan lender Accion US offers the “Elizabeth Street Capital Program” for minority women entrepreneurs. The program provides small business loans and mentoring services to minority women entrepreneurs. The average small business loan that can be obtained through the program is between $500 and $50,000. You can call (866) 245-0783 to apply or apply online here.
According to a recent study, “Business Microloans for U.S. Subprime Borrowers” increased access to capital amongst minorities have greatly contributed to their success in owning a small business. The study was compiled based on data obtained from Accion Texas, a microloan lender. The participants that were studied were borrowers who were approved for microloans from Accion Texas during 2006 – 2011. The study found that minorities benefited the most from microloans received from Accion Texas during 2006-2011, especially those that were educated and/or had less than perfect credit.
Get Prepared: You’ve Got Requirements to Meet
Getting a microloan is just like getting any other type of financing. You’ll need to meet the lenders requirements to be considered for approval. Most microloan have lower minimum personal credit score requirements than traditional lenders. For example, Accion US has a minimum credit score requirement of 575. Other microloan lenders have minimum credit score requirements of as low as 500. Depending on the lender, other minimum requirements may include (but are not limited to):
A full business plan with marketing plan at least 3 years of financial projections
No foreclosures in the last 24 months
Bankruptcies must be discharged for at least one year
Employed for at least 6 months or in business for at least 6 months
The most important requirement that will contribute to you getting approved for a microloan is having a full business plan with a marketing plan at least 3 years of financial projections. You’ll have to provide this along with your application. It’s the only way lenders will know whether or not you have a viable business idea. So it’s best to have your business plan prepared before you apply. There are companies out there that offers services to minority women entrepreneurs who need help putting together a business plan to submit with a microloan application. For example, QT Business Solutions, a microloan preparation package service provider can help you put together a business plan, marketing plan, and financial plan and guide you on which microloan lenders to apply to in your area.
Get Started: Microloan Sources are In Every State
Microloan lenders are literally in every state. They are truly a hidden gem! You can find many microloan lenders in your area by contacting your Local SBA District Office or by checking the SBA list of microloan lenders online.
Brittni Abiolu is the Owner & Publisher of www.CapitaLinker.com. Through her website, she serves to educate entrepreneurs and small business owners on how to increase their chances of obtaining capital in the simplest way possible and how to find and connect with the most appropriate funding sources. You can connect with Brittni on Linkedin, Google+, Twitter, Facebook, and Pintrest.