Small Business Loans for Minority Women Entrepreneurs

loans for minority business

Loans for minority business women and entrepreneurs may seem non-existent to some, but if you know where to go and who to talk to you will find that they are out there.

Women who are minority entrepreneurs are often at a disadvantage when it comes to having the necessary resources to start and grow a successful business. So it’s no surprise to me when I hear them say small business loans for women just don’t sound realistic. In fact, the lack of resources for women who are minority entrepreneurs was recently discussed in an article written by the multi-million dollar heiress of the Washington Post, Katherine Weymouth.

The Disadvantage

In the article, Katherine discusses the plight of minority women entrepreneurs by using Facebook Chief Operating Officer, Sheryl Sandberg’s new book, “Lean In,” as a reference. In the book ‘Lean In,” Sheryl says she is writing the book for any woman who wants to take her career to the next level.

However, most of the women who will be able to relate to what she says are women who have a choice on when and how much to work — a choice that most minority women entrepreneurs do not have. Most of the information is for women who have the financial resources and support to take them to the next level in their careers.

Katherine posed a question regarding Sheryl’s book and that question is: How do you lean in, when you don’t have someone to lean on?

Build Your Own Network

The fact of the matter is minority women entrepreneurs are going to have to build their own network of resources to “lean on,” especially if they want to obtain a small business loan.

Small business loans for women are offered through many SBA microloan programs. SBA microloans are mainly offered by local community based, nonprofit micro-lending organizations that provide up to $50,000 to entrepreneurs in disadvantaged communities. Minority women are often considered disadvantaged because they simply don’t have access to the financial resources and support needed to start and build successful businesses.

If you’re a minority woman entrepreneur and you’re in need of small business loan for women, you should definitely consider applying for an SBA microloan. An SBA microloan may be just what you need to get your business off the ground and take you career to the next level.

The Statistics

Consider these statistics (PDF), complied by Opportunity Fund and the Accion U.S. Network, a microloan lender who provides small business loans for women, when deciding whether or not an SBA microloan may be right for you:

  • 97% of the entrepreneurs who received microloans, were still operating their business two years later as a result of obtaining the funding.
  • 54% of the entrepreneurs who received microloans, were able to hire an average of 5.6 employees as result of obtaining the funding.
  • 32% of the entrepreneurs who received microloans, said their revenues increased as a result of obtaining the funding and 41% said the increase in revenue met or exceeded their expectations.

With statistics like that, it sure seems that a microloan is worth considering if you are looking to grow your business.

If you’re looking for loans for minority business women, then a microloan can definitely be a step in the right direction. Check with your local SBA district office to find a microloan lender in your area and you may be glad you did.

Coin Photo via Shutterstock

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Tom Gazaway


Tom Gazaway Tom Gazaway is President of Hawkeye Management, a firm that specializes in providing unsecured working capital for small business owners. Through their pre-qualification process and detailed analytics, they match small business owners with lenders who will issue business credit without collateral. Tom also blogs at Business Finance Lounge.

22 Reactions

  1. As a woman, I am glad that opportunities like these are open to women. It is getting harder and harder to conduct some good business if you are a woman. There are still some bias towards men business owners. Things like these always bring women entrepreneurs some hope.

  2. Its a great effort by SBA team towards rehabilitating women entrepreneurs, i feel more such ways should come to help women’s to rise & shine in a business, since financial assistance has always been held as prime requirement to progress.

    • Yes, I agree Steve, but its not as easy as it sounds …getting a loan with ANY bank or SBA isn’t easy…unless of course you have STELLAR credit and 6-12 months of profits….at least thats what I’m finding here in California. (believe me, Iv’e tried all of them – now I’m going for “unconventional” types of funding where they’ll look at more than just my CREDIT, CREDIT & CREDIT SCORE…They’ll also take into account my progress and profits past 3 mos, the $$ that I have personally invested (already), and my business plan/financials that I worked so long & hard on….Wish me Luck! :)
      Suzanne~

      • Suzanne, I certainly wish you the best of luck. At this time last year, I was talking to lenders and the SBA. I filed for incorporation, started the process of beginning a business, wrote the full business plan with 1 year, 3 year, and 5 year goals, and even had my first 6 months financial projections with quotes for inventory, building, repairs, and renovations……..I am still working from home and having to by small amounts of inventory with my own funding and struggling to find the lenders’ support without $30K or more to put upfront.
        Waiting on the Lord in Alabama,
        Shannon

      • Good luck Suzanne. It’s definitely not easy finding funding. If you strike out on your own then you may want to consider working with a company or individual who specializes in small business financing. Those companies and people should have most of all of the primary debt options as part of their arsenal. There are about 10-12 primary debt options that are out there. Keep us posted and we’re crossing our fingers for you.
        Shannon, I hope and wish the best for you as well and give you my same thoughts I gave Suzanne. If you strike out on your own you may want to find someone or a company who can assist you with finding your funding.
        There are obviously no guarantees but at least you’ll know you’ve tried all the commonly used bank and non-bank funding channels.
        Tom

      • What other “unconventional” methods are you using

  3. Thanks Steve, I agree.

  4. Talk about focusing on a niche specific group! I think this is great and reading this post makes me think of how far we have come as a society and how other countries around the world should view this as a real opportunity fro growth.

    • Thanks Ed. It seems to me we’ve perhaps come a long way but we still have a long way to go in this area. Thanks for reading and for your comments.

  5. So, after reading this article it sounds as if you are saying that since I am NOT a minority woman, I pretty much have access to financial help for my new start-up that minorities do not?……I WISH!!
    I also have to pre-qualify for any loan, including SBA loans (and they are NOT easy to get!!)…I’ve tried. So far, even though I’m in my first year of my start-up and have some sales under my belt along with a completed Business Plan w/Financials, no-one will even consider me for a loan as my CREDIT is not over 750…That’s the biggest challenge Iv’e been facing….As a woman (white, middle class), I’m having the same challenges as every other woman who’s trying to get a new business funded…MAYBE YOU GUYS HAVE SOME REAL-LIFE SUGGESTIONS FOR ALL WOMEN?!
    Thanks! :)
    Suzanne Rogers~

    • Hi Suzanne,

      Not all SBA loans require you to have good credit. With SBA Microloans, you can often have as low as a 500 personal credit score or lower. SBA Microloans can go up to $50,000 but the average for startups is around $13,000. Visit the SBA website to find your Local SBA district office: http://www.sba.gov/tools/local-assistance/districtoffices. They will help you find microloan lenders in your area. You should also check out http://www.qtbizsolutions.com, they help business owners in all 50 states obtain SBA microloans (even with less than perfect credit). Lastly, check out http://www.opportunityfund.org/. The are a non-profit in California that works with low income and sub-prime borrowers. I hope this helps! Good luck.

      • Great information Brittni. It really is difficult for any woman, minority or not, to get the SBA to help with loans. Nevertheless, we do not give up. The information you have provided is very useful.

      • Thanks Brittni, very good and useful information. Resources like that are invaluable. Thanks again for reading and for joining the conversation.

  6. It is good that women are being looked after in this niche. I have to say from experience that obtaining finance can be tricky as woman.

  7. If you’re looking for loans for minority business women, then a microloan can definitely be a step in the right direction. Business women need to be empowered with financial help to get started.

  8. I totally agree that women are at a disadvantage when starting/running their own business. My wife struggled to get the finance she needed to buy new equipment and expand. Knowing that these microloans are available will give women the support they deserve!

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