Minority Business Loans
Minority business loans provide an opportunity for minority small business owners to receive funding for their business. There are different types that have a variety of terms and amounts, so it’s important to review your options before deciding which to apply for.
SBA (8a) Business Development Program
The SBA (8a) Business Development Program helps qualified minority-owned firms develop and grow their businesses. To be considered, 51% of your business has to be owned and controlled by socially and economically disadvantaged individuals. If accepted into the program, businesses can go to educational programs, receive no-bid government contracts and improve their chances of approval for an SBA loan.
SBA Microloan Program
For loans less than $50,000, the SBA has a microlending program. This program doesn’t specifically apply to minorities, but these smaller-sized loans can be very beneficial for businesses who need some help getting started or expanding. Just like all SBA loans, these microloans are not funded or serviced by the SBA, but rather backed by them.
SBA Community Advantage Program
This program is designed to assist entrepreneurs in underserved areas. It allows non-profits and other smaller, local lenders to make SBA 7(a) loans of up to $250,000 with the 7(a) government guarantee. While also not specific to minority business owners, this program does work to meet the needs of small business owners who don’t qualify for traditional forms of business funding.
CDFI Small Business Loans
Community development financial institutions (CDFIs) are loans that are backed by the federal government to make loans to small business owners who may not receive approval from a traditional lender. Loans through a CDFI vary by institution — some offer personal loans, some offer microloans, and some business loans. The amount of options CDFIs provide and their ability to service business owners who need unique assistance can make CDFI small business loans a viable funding option for minority business owners.
Alternatives to Minority Business Loans
While minority business loans can be beneficial to minority business owners, not all minority business owners will find minority business loans to be the best option for their business. Other types of small business funding can be attractive to minority business owners as well.
Invoice financing is like an advance on your outstanding invoices. A company (called a “factor”) will front you a majority percentage of what your invoice is worth and deliver the rest once the payment is received. The business who receives the money for the invoices will pay the factor interest and fees for the service.
Business credit cards are an extremely popular form of business lending, as there are card types for businesses of all credit ranges. Just like personal credit cards, many business credit cards offer perks and rewards. These rewards are generally business related, so they can be advantageous to your company. While business credit cards can offer higher credit limits than what a business owner can obtain with personal credit, they don’t always offer the working capital that other forms of lending (like a business line of credit) could.
Business lines of credit are similar to business credit cards in that they offer a credit limit for the business to borrow from and allow businesses to only pay interest on the money they draw. They are also similar in that your available credit replenishes as you pay off your balance. The main difference between a line of credit and a business credit card is that a line of credit often offers a higher credit limit, and provides a higher amount that you can use as cash.
What Does Headway Capital Offer?
At Headway Capital, we believe you can accomplish great things with the right support. We’re proud to help hardworking business owners like you accomplish your goals. We do this by offering a business line of credit with no hidden fees.
12, 18 or 24 months
Weekly or monthly
Business line of credit
No Hidden Fees
See our Rates & Terms for details
Clear payment terms, interest does not compound, no penalty for early payoff
1We will not perform a hard credit pull until after you have submitted the application and signed the contract.