One of the specialized and targeted business loan type that is highly supported by government is the Minority Business Loan. This type of loan was developed for small and medium entrepreneurs representing minority groups or women. It was established to inspire business ownership and encourage growth of companies owned and operated by these social niches.
Many of the applicants for minority business loans are borrowers who have been disapproved by many other financing institutions. It is important for these individuals and businesses to be aware that there are several government sectors that have financial allocations for funding minority business loans.
The American government realizes the difficulty associated with loan applications and approvals for individuals and businesses in general. It is also acknowledged that it is even more complicated and challenging for minority groups to seek loans. It is for this reason that the Minority Business Development Agency was established.
The MBDA is a member of the US Department of Commerce and is the only national agency developed with a sole objective to encourage the institution and progress of businesses owned by minorities in the United States of America. It is through integration of public and private resources that MBDA is able to work towards its goal.
A group of Business Resource Centers, Minority Business Development Centers and Native American Business Development Centers that are found all over America is funded by MBDA. These institutions offer personal help for minority entrepreneurs in their effort to avail of Minority Business Loans as well as in the overall success of their business. Mentoring individuals in writing business plans, marketing and basic management extends assistance to the interested parties. Technical and financial planning are likewise supported.
In relation to Minority Business Loans, MBDA knows that the first key element of business success for any minority entrepreneur is getting approvals for minority business loans. Therefore, the initial guidance provided by MBDA comprises training on the preparation of approvable loan and grant applications. The MBDA leads the entrepreneur on successful business plan presentations in order to project a viable endeavor worthy of the financing support.
Minority Business Loans are customized and directed towards women and minority business operators. ‘Women’ in this sense is meant for those who come from underprivileged communities. Several banks, federal agencies and private businesses have allied together to provide for these groups business funding. However, it must be noted that minority business loans are different from minority business grants. Minority Business loans, just like any other loan, need to be paid back.
The basic criteria for qualifying for a minority business loan include:
- The borrower must be a member of a minority group
- The borrower’s intended use of the funds should be geared towards starting a minority business or expanding an existing one
- The business effort must be situated in a target and minority-populated region
Working on a minority loan funding requires careful preparation. The most important of which is the element of the Business Plan. So, if you are among those interested, take the time to research and prepare. Loan applications may present difficulty unless appropriate preparation is done.
E. Linares is Chief Visionary Architect at Commercial Magnet:: the new face of the online lending marketplace where borrowers and lenders connect; 6 points of service to help build your wealth! Commercial Magnet is the entrepreneurial platform that takes business owners from start to funding. Find out how a Business Loan or Working Capital can help fuel your business at http://www.commercialmagnet.com.