The United States is a country that throughout its history, has facilitated the development of small businesses. There are tools, government support and various sources for access to capital.
However, the key is the order that the entrepreneur has. Starting a business requires planning and many legal processes. Not to mention that even after you get to the right idea about the whole concept, the “money” problem will probably still be very much alive.
Luckily for you, there are numerous ways that you can finance your small business and down below, we will cover different ideas on how you can do so.
Here are some pieces of information that will hopefully help you establish a business in a place that you always wanted.
No Credit Score and No Hope? Enter Hard Money Lenders
These hard money lenders are simply money creditors where the value of real estate secures your loan. They are financed by unique investors (or an investment fund) as opposed to traditional lenders such as banks or credit unions.
The terms are generally about 12 months, but the loan term can be extended to a longer duration of 2 to 5 years. The loan requires monthly payments of only interest and/or some capital with a global amount at the end of the term.
The amount that hard money lenders can grant to the borrower is based primarily on the estimation of the property in question.
The property that is in question may be one that you already own and want to use as a deposit, or it can be some property that you are in the process of acquiring.
Hard money lenders are primarily concerned with the value of the property instead of the borrower’s credit (although the credit remains of some importance to the lender).
Borrowers who cannot obtain regular funding due to a new foreclosure or short sale can still get a hard money loan if they have enough resources on the property that is used as a guarantee.
What Is a Subsidy, and How to Access It?
Although you can apply for a small business loan to capitalize on your company, you can compete for one of the different small business subsidies offered in the country and get additional resources.
There are numerous examples of companies that once were nothing more than an idea for a first start-up project. Hammer Handmade Co. in Naples, Florida based house renovation enterprise that can be a great instance of money well invested in a business that today operates successfully. However, at one point they too needed a piece of subsidy, just like thousands of other companies.
These grants are financial incentives granted by federal agencies, foundations, and private organizations that want to help small businesses belonging to minority groups or those with financial obstacles.
With these resources, they also seek to reward initiatives that stand out in certain areas and with the potential to become successful businesses. Unlike a loan, you don’t have to repay the money from a grant.
The bad news is that it is challenging to qualify for these subsidies.
How Can You Access a Subsidy?
First of all, you must meet reasonably specific requirements, in addition to having rules about how you can invest the money. Secondly, you have to compete with hundreds of entrepreneurs and owners like you, who see these subsidies as an opportunity for their businesses to grow and come afloat.
Given this scenario, there are certain things you can do to improve your chances of getting one of these subsidies for Latinos and other minorities:
- Choose carefully the subsidies for which you want to participate. Make sure you meet all the required requirements. And of course, send your request within the deadline.
- Provide complete and truthful information. Most likely, an incomplete or inaccurate request will be discarded.
- Prepare a business plan. Describe what products or services you sell, what is your target market, what differentiates you from your competition, etc. Also, point out how you plan to invest subsidy funds (taking into account if there are rules for how you can use the money).
- Seek professional advice. If in doubt, ask for guidance from someone who has competed for a subsidy or someone who is a scholar for this subject. You can also look for an expert to help you prepare your business plan, organize and verify the information, or prepare the documents you may need during the process.
Other Resources for Opening Small Businesses by Latinos
In addition to subsidies for small businesses, there are other types of resources that you can go to expand your business.
Websites specializing in grants, federal agencies, chambers of commerce and other organizations offer financial and legal advice, guidance for accessing loans and grants, listings with a large number of grants, and other business opportunities.
All this to make small businesses owned by minority groups succeed.
Obtain a Minority Business Certification
These certifications prove that you, as the business owner, are part of a minority. Having one of these certifications will make you eligible for contracts or jobs with government agencies that require it.
Learn how to certify yourself as a minority business since each certification has a different approach for the different minorities.
But, in general, it can be explained as a company that is controlled, managed and owned by an owner that is least 51% minority.
Despite its contribution to the US economy, it is difficult for Latinos to access financing for their small businesses. Although commercial loans are an alternative for immigrants, subsidies are also another way to raise capital.
Even though the process to apply for a grant is complicated, there are ways in which you can increase your chances of accessing one.
Many money borrowers (be it banks or private lenders) are aware of the financing needs of Latinos and want to offer them all the facilities to access your first loan.
Try to find the borrower that seems to you like the one that genuinely desires on helping minorities and supporting the Latino community to continue contributing and growing the national economy as best as they can.