Minorities, Women, and Veteran Business Owners – Get Extra Funding Here
By Ronis Gracie,
No matter how poor sales may become or how few customers walk through your door, you still need to pay your staff, maintain your equipment, pay the rent or mortgage, buy inventory, purchase advertising and a multitude of other things as well.
Bringing a partner or investors into the mix is an option, but the trade off is that you lose control over the precious company you have worked so long and hard to build.
If you are a minority, a woman or a U.S. military veteran, your challenges can sometimes seem even more daunting.
Just how can you go about getting the cash you need without compromising your business?
Small Business Loans for Anyone
Although you may represent a minority or a unique group, and you may be eligible for small business loans for minorities, you shouldn’t overlook the many opportunities that are available to all business owners.
These are the old-school lending mechanisms you are probably quite familiar with.
You borrow a set amount of money at a certain interest rate over a fixed period of time.
Everything is quite predictable with these loans, meaning that you can’t change the terms midstream.
However, if you have a good credit history and collateral that you’re willing to lay down, the traditional fixed term loan is a viable option.
If your credit is poor or mediocre and a good portion of your sales are done via credit cards, a merchant cash advance loan can furnish you with the fast cash you need without the necessity of laying down collateral.
In this financial arrangement, the lender gives you the speedy cash you need.
You agree to pay the loan off a little each day by giving the lender a fixed percentage of your credit card sales.
The better your credit card profits, the faster you can pay off the loan.
In addition to the loan amount, you will pay a factor rate as well as other lender and withholding fees.
Think of this as getting cash on the strength of your expected future income.
In these invoice financing or accounts receivable loans, you sell your outstanding invoices to a lender and quickly gain access to a high percentage, usually 80 to 85 percent, of their total value.
The lender keeps the rest in reserve to pay various fees.
Generally each week, you will pay a percentage that includes a factor fee.
When your customer pays for your goods or services, you can pay off the loan.
You receive whatever is left of the original reserve minus fees.
These are not unlike your own personal credit cards.
The lender gives you a maximum amount of cash above which you are not allowed to spend.
These loans can function as excellent safety nets that you only use in the event of an emergency, or they can provide you with ongoing funds.
You don’t pay a dime until you tap into the cash.
Then, you are responsible to pay back only the amount you used plus interest and fees, while still being able to use the remainder of the total amount.
Line of credit loans are not for everyone; they work best for businesses that have an established history and a good credit rating.
Just remember this:
As with your own credit card, your relatively reasonable rates will skyrocket if you exceed your limit or are late with a payment.
Special Loans & Small Business Grants
Your company’s status as a minority-, woman- or veteran-owned business also entitles you to loans that other entrepreneurs are unable to apply for.
These are made possible by the Small Business Administration (SBA), an independent federal agency whose mission is to empower small business owners and thereby strengthen the U.S. economy.
Although this agency does not lend the money, it offers incentives to banks and other financial institutions to do so.
Read below to see if any of these will meet your needs.
The SBA’s 8(1) Business Development Program
This SBA program provides one-on-one counseling, mentoring, training workshops and technical guidance.
In order to qualify, you must be a member of a socially and economically disadvantaged group.
This includes African Americans, Hispanic Americans, Native Americans, Asian Pacific Americans and Subcontinent Asian Americans.
If you are not a member of one of these groups, you may still qualify as long as you document that you have been subject to bias or discrimination and are economically disadvantaged.
Once accepted, you can receive help with developing your business, including obtaining SBA funding.
The SBA’s Mentor-Protégé sub-program matches minority businesses with mentor firms, furnishes technical assistance and helps their protégés compete for federal contracts.
Learn more about Minority Business Loans
Resources for women-owned businesses
The SBA is committed to helping female business owners launch and grow their enterprises in order to compete locally and even globally.
To that end, they provide numerous resources.
The SBA’s Office of Women’s Business Ownership can answer any questions you may have about the Women’s Business Center program or about obtaining the funding that you will need to grow.
Most likely, there is an SBA Women’s Business Center near you.
This educational resource can help you start and grow your business in numerous ways.
If you’re looking to get in on federal contracts, check out the SBA’s Women-Owned Federal Contracting Program, which seeks to level the playing field in this area.
Learn more about Small Business Loans for Women
Loans for Veterans
If you are a U.S. military veteran, the SBA has several programs tailored to meet your unique business start up and maintenance needs.
There are also resources for you if you have a disability.
Operation Boots to Business is a three-step entrepreneurial education program.
Enrollees take classes in Introduction to Entrepreneurship, Foundations of Entrepreneurship and Tips and Techniques for Starting a Business.
Veterans Business Outreach Centers offer training in entrepreneurial development as well as counseling and mentoring for veteran business owners.
If you are considering applying for a SBA loan of any kind, there are plenty of savvy mentors here who can help you.
Overseeing these programs is the Office of Veterans Business Development, which makes veterans’ business programs available, applicable and usable by all veterans, service-disabled veterans, reservists and their dependents or survivors.
Learn more about Small Business Loans for Veterans
If you need funds to start or grow your business, there is good news.
Loans can be found from many sources, as well as small business grants for any imaginable reason.
Whether you take advantage of universally available financial mechanisms or zero in on those designed just for you as a minority, woman or U.S. veteran, you are sure to find something that will give your company the jump-start it needs.
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