Secure the Loan You Need Small Business Loans for Latinos
Starting and growing a business takes work for everyone. The stakes are high, and comfort is low, but the reward is to be your very own boss. It can be challenging for a Hispanic business owner. There are cultural, language, and even statistical barriers to getting through.
Despite being the fastest-growing demographic among entrepreneurs in the United States, Hispanic-owned businesses need help accessing capital. As a result of this lack of funding, numerous organizations and government agencies have assisted Hispanic and minority business owners with loans, grants, and other financing options.
However, with the rise of alternative business financing, small business owners now have more options to consider. The key is knowing where to look. This article will explain some challenges Hispanic business owners must understand and small business loans for Hispanics, among other business funding alternatives.
Financial Support For Hispanic Entrepreneurs
Acquiring business capital will depend on your finances and the ability to navigate the processes and business funding requirements. Traditional funding options such as term loans, SBA loans, credit cards, and credit lines are usually challenging. Statistically, Hispanic business owners have a harder time than the general population acquiring business financing.
For example, a Stanford Business Study showed that in 2019, Latinos applied for financing: 28% of Latino business owners end up with funding, vs. 48% of general populous business owners. Despite the language barriers and the funding gaps, Latino entrepreneurs have started small businesses at a higher rate than any other demographic.
We are not discussing the challenges the Hispanic business owners faced to discourage you. On the contrary, we believe every entrepreneur should have the same possibilities and access to fast working capital. In the following sections, we will review small business loan options for Hispanic entrepreneurs.
Funding For Latino Owned Small Businesses
Hispanic and Latino entrepreneurs generate jobs, revenue growth, and national cultural diversity. Their importance in our national economy is underrated, and they have undergone many challenges on their way to success. The following funding resources can facilitate access to business loans and other funding programs for Hispanic business owners:
Hispanic-owned small businesses were awarded more than $2.7 billion in funding from the SBA this 2021. There are multiple financial resources aimed at boosting business growth nationwide. If your business qualifies for an SBA-guaranteed loan, it could receive competitive terms and lower down payments. Let's get a grasp on some available options:
CDFI-certified entities provide financial aid and service to communities with trouble accessing funds or generating low income. In addition, their nationwide network offers a wide variety of opportunities for Hispanic-owned businesses and entrepreneurs to grow their businesses.
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The first step to qualify for this working capital, network, and mentoring opportunities is to get a CDFI Certification that meets several requirements, among them being a financing entity with a primary mission of promoting community development. You can check more details at the official CDFI site.
Other official and privately-owned Minority-owned business certifications can give you access to federal aid and private grants! If you're curious about the options and eligibility requirements, you can find more information in our Minority-owned business certification guide.
If you're looking for a funding alternative based on your business's potential and success and doesn't require a perfect credit score, then a Merchant Cash Advance (or MCA for short) could be a great choice.
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An MCA is an advance on your anticipated future revenue and is paid back with an automated withdrawal from your business account. The amount is typically a set percentage of income based on a set time and depends on the success of your business, facilitating the repayment period through slow business cycles.
One Park Financials' funding programs are ideal for eager entrepreneurs with poor credit scores but excellent performing businesses. You can check if you pre-qualify for one of our fast-working capital programs if your company has been open for at least three months and generates a monthly income of $7, 500.
Another alternative funding option for Hispanic entrepreneurs is selling unpaid invoices (or receivables) to a third-party factoring company. Through invoice factoring, the factoring company collects payment directly from your customers.
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Eligibility requirements vary depending on the factoring company, but funding payments typically take place in two parts. The business receives the first part of the funding when you reach an agreement. You receive the second part when the company collects payment from its clients. To get a step-by-step guide on this process, check out how invoice factoring works.
Unlike other funding options, a grant doesn't require repayment, but you often must go through a challenging selection process to stand out from the rest of the candidates. Below are the best options aimed at Hispanic business owners and Minority-owned businesses. While we do not work with business grants, we encourage you to try. Here are four different grant programs you could apply to:
The Hispanic community doesn't fall behind in being at the forefront of entrepreneurship in the US. This powerful force owns 4.4 million businesses nationwide and generates $700 billion in revenue annually.
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Whatever funding option works for your business, don't be afraid to step out of your comfort zone to search for the fast working capital you deserve!
At One Park Financial, we are committed to helping Hispanic business owners fulfill their business goals. The first step is filling out our online form. Once you pre-qualify, we will connect you with a financing expert with whom you can assess the needs of your business and determine the best financing options for your venture. One Park Financial will work with its financial partners to get you an offer. Dare to finance your dreams today!
Disclaimer: The content of this post has been prepared for informational purposes only. It is not intended to provide and should not be relied on for tax, legal, or accounting advice. Consult with your tax, legal, and accounting advisor before engaging in any transaction.It can be fairly common for Latinos in the United States not to be able to access a business loan, but Hispanic small business grants are a great financing alternative.
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There is an estimate that Latino business owners have 22% less opportunity of qualifying for a loan, compared to business owners who do not belong to this minority.
This is still a problem, even though there are more than 4.37 million businesses owned by Hispanics in the country, which contribute to the national economy about $700 billion per year. Imagine how much that number could multiply if these entrepreneurs had the right means of financing.
Although this gap seems to be getting narrower for Latinos (especially in recent years), it remains a challenge to meet the requirements of banks and other lenders.
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In many cases, accessing capital to finance a small business becomes a matter of creativity. Latinos are recursive , and we take advantage of any opportunity, such as Hispanic small business grants offered by federal agencies or private entities.
In this article, we explain what grants are, we talk about the minimum requirements that you must fill to request one of them, and of course, we highlight several grant programs available to Latinos.
Although you can apply for a small business loan to capitalize on your company, you can compete for one of the different grants for small businesses that are offered in the country and get additional resources.
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Broadly speaking, grants are financial incentives offered by federal agencies, foundations, and private organizations, which in many cases just want to help small businesses in minority groups or with economic problems.
With these resources, they also seek to reward initiatives that excel in certain areas, and with the potential to become successful ventures.
Unlike a loan, you do not need to repay the money of a grant. The downside is that it can be challenging to qualify for these small business grants.
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First of all, you must comply with precise requirements, and there might be regulations on how you can invest the money. Secondly, you have to compete with hundreds of entrepreneurs and business owners who want to help their businesses thrive .
There are several grants available you can apply for, but we have selected some of the most important small business grants for Latinos.
In this list, you will find public and private initiatives aimed at financing all kinds of businesses in different sectors of the economy (some of them focused on helping minority-owned businesses, including the Latino community.)
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The United States Department of Agriculture (USDA) offers grants to small business owners that live in rural areas. You can use the funds to start or expand a small business.
To access this funding, your business must have fewer than 50 employees, generate an annual income of less than $1 million, and be in one of the eligible rural areas.
You should go to the nearest USDA office to obtain information about the application process and to find out about other grant programs offered by the agency.
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This association, known as NASE, gives grants of up to $4, 000. Their Growth Grant Program allows small business owners to request funds to finance their specific needs.
Some of its beneficiaries, according to the association, have invested the money in computers, equipment for agriculture, hiring employees, or marketing for their businesses. Since 2006, NASE has delivered almost $1 million in grants.
To apply for one of these grants for small businesses,