Running your own business can be one of the most challenging things you can do. But no matter how much passion you have, your business success sometimes needs more than your personal commitment. Occasionally you may need extra funds to boost working capital or to expand your commercial endeavors. Women entrepreneurs who identify as minorities may face unique challenges when applying for a business loan. Fortunately, there are a number of providers that specifically provide business loans for female minorities. There are also a number of other options worth exploring when you are looking into securing finance for your business.
How To Qualify for Small Business Loans as a Female Minority
Every financial lender varies slightly with their eligibility requirements. However, there are a few general factors that can help you work out if you would qualify for one of the small business loans for female minorities available. Most lenders stipulate that your company needs to be at least 51% owned by a female or minority to qualify. Some lenders require that you need to have been operating for a minimum amount of time. If your current financial assets are in excess of a certain amount this can also result in your application being rejected. Fortunately, there are a lot of resources to help guide you in the process to find the small business loan best suited to the unique needs of your small business. Creating a plan for what you intend to use the funds on can also help, as some loans for female minorities don’t cover all business expenses.
The Best Small Business Loans For Female Minorities
Here is a breakdown of some of the best small business loans for female minorities available. It includes bank loans as well as loans administered by the U.S. Small Business Administration. The SBA is a federal initiative designed to deliver SBA loans for female minorities.
SBA 7(a) Loans
The SBA 7(a) business loan is flexible in that it can be used for a variety of business purposes including to buy real estate, contribute to working capital, refinance business debt, purchase furniture/fixtures/supplies, or expand your business. To apply, you need to contact your local SBA lender and check that you meet the eligibility requirements. The maximum loan amount is $5 million.
SBA 8(a) Loans
The SBA 8(a) is a business development program administered by the U.S. Small Business Administration. The aim of the program is to award federal contracts to disadvantaged businesses. Even though it isn’t technically a loan, there are many benefits to being part of the program including enhanced opportunities to secure federal contracts, get professional assistance in navigating federal contracting, opportunities to form joint ventures, and receive business training and marketing assistance. To qualify, your company needs to be a small business, owned at least 51% by someone who is socially and economically disadvantaged, and with a personal net worth of under $750k. You also need to get your business certified as an 8(a) small business.
The U.S. Small Business Administration microloan program is part of the SBA loans for minorities stimulus. Funds can be accessed to help pay for costs associated with things like working capital, inventory, supplies, fixtures, furnishings, machinery, and equipment. Most SBA loans for women in the SBA Microloans category average around $13,000 with a maximum loan limit of $50,000. To qualify, you will need to contact your local SBA approved microloan intermediary who can help you apply.
Union Bank Diversity Lending
The Union Bank Business Diversity Lending Program is a specialty credit program designed to assist women and minorities secure the finance they need for their small business. They can provide up to $2.5 million in finance. Your company needs to be at least 51% owned by a female or minority and have been operating for at least two years to be eligible.
USDA Business Loans
The U.S. Department of Agriculture offers business loans for female minorities working in rural areas. To be eligible, your business needs to be located in a country area, with a population of less than 50,000 people. They will loan you up to $25 million and can be used to provide working capital, to buy real estate, expand your business, or refinance debt.
Small Business Grants for Female Minorities
Another alternative to securing a loan, or for added finance, is to pursue one of the small business grants for female minorities available in the U.S. Benefits of winning a grant include that you won’t need to repay the funds. Also, often grant recipients get some great exposure which can be a real value-add for your business.
Eileen Fisher Women-Owned Business Grant Program
If your small business has an environmental focus, you could be eligible for the Eileen Fisher Grant Program. This is an annual award with an aim to support women in the pursuit of environmental justice. Their awards usually range between $10,000 to $40,000. Though applications for 2020 have closed, this could still be one to add to your watchlist.
Amber Grants for Women
Every month the Amber Grants for Women awards $10,000 to a female entrepreneur. Additionally, at the end of the year one of these winning grant recipients is awarded an extra $25,000. To apply, all you need to do is fill out an application where you share your business dream.
FedEx Small Business Grant
The FedEx Small Business Grant is an annual contest open to small businesses in the U.S. The grand prize is $50,000 plus an additional $7,500 worth of FedEx office printing services. There are great runner’s up prizes too. Your business must have been operating for at least 6 months to be eligible.
Cartier Women’s Initiative Awards
The Cartier Women’s Initiative is an international female entrepreneurship program. They run two annual awards programs. Their Regional Awards are open to applicants from seven different global regions with finalists winning up to $100,000 in grant money each. Their Science & Technology Pioneer Award offers a winning prize of $100,000 to female entrepreneurs working in the field of science and technology. Winners also qualify for their fellowship program.
Trying to find the best business loan for women is an individual pursuit, because every business has unique needs. But knowing that there are a wealth of resources out there specifically made to help female minorities succeed in business will hopefully help you achieve everything you desire. No matter how big your dreams are for your small business, there is someone there to help you on your journey.
Trying to find the best business loan for women is an individual pursuit, because every business has unique needs. But knowing that there are a wealth of resources out there specifically made to help female minorities succeed in business will hopefully help you achieve everything you desire. Take the time to research the loan options available for you, and also explore if there are any business grants that you could apply for. No matter how big your dreams are for your small business, there is someone there to help you on your journey. Best of luck to the success of your business!