11 Resources For Hispanic Women Entrepreneurs To Get Funding For Expansion
The number of Hispanic and Latino-owned businesses grew by 34 percent over the past 12 years, compared to a negative 7 percent growth in non-Hispanic businesses. And these businesses contribute $800 billion annually to the American economy. The economic outlook of these businesses looks bright, given their double-digit growth and reasons for seeking funding—such as expanding the business or acquiring more capital assets.
According to the State of Latino Entrepreneurship: 2022 Research Report from the Stanford Graduate School of Business, the Stanford Latino Entrepreneurship Initiative (SLEI) Research Program, and the Latino Business Action Network (LBAN), in 2022, three in 10 Latino-owned businesses sought financing.
The top forms of financing requested:
- Business credit cards (11 percent)
- Personal or family savings (10 percent)
- Business loans from national banks (9 percent)
- Personal credit cards (8 percent)
- Business loans/investment from family and friends (5 percent)
The primary reasons for seeking capital:
- Expanding the business (16 percent)
- Meeting operating expenses (12 percent)
- Acquiring additional capital assets (10 percent)
The good news is that Hispanic entrepreneurs are successfully securing small financing amounts at a better-than-average rate. For loans of less than $50,000, Latino-owned businesses received, on average, 64 percent of the money they applied for; white-owned businesses received just 49 percent.
Thankfully, there are small business grants, loans and other funding options for Hispanic entrepreneurs. You can also ask a SCORE mentor for help understanding your options and applying for financing.
Here are 11 funding resources for you to explore.
This directory from Bank of America and Seneca Women is a curated database of U.S.-based funding sources, including loans, equity investments from venture capital firms and angel investors, grants and crowdfunds. It’s available in English and Spanish.
Accion works with small businesses that have been excluded from traditional funding options to offer loans, advice and coaching, educational resources and support networks in English and Spanish.
In addition to offering loans, Accion invests in community service-focused projects that can help transform low-income communities.
Founded by twin brothers who saw their mom lose her chain of Mexican restaurants due to a lack of capital when they were 12 years old, Camino Financial was founded to offer credit to minority-owned micro businesses. The brothers believe that ideas are worth investing in.
According to this financial technology company, its loan approval criteria are more flexible than other financial institutions, and they base their loan terms on your company’s cash flow and credit score and how you plan to use the money. Companies that have been in business for at least nine months and have annual sales of $30,000 (or $2,500 a month) are eligible to apply for a loan.
4. Community Development Financial Institutions Fund (CDFI Fund)
CDFI Funds help expand economic opportunity in economically disadvantaged communities by providing access to financial products and services for local residents and businesses. Run by the U.S. Department of the Treasury, the fund’s programs are offered by banks, credit unions, loan funds, microloan funds, or venture capital providers and invest both federal dollars and private sector capital. Here’s a short list of CDFIs offering financial resources to Hispanic business owners:
5. Grants.gov
Under the federal Office of Management and Budget, Grants.gov is a hub where businesses can find and apply for federal funding opportunities. The comprehensive database provides information on more than 1,000 federal grant programs. It also vets grant applications for federal grant-making agencies.
Grants.gov also provides advice on grant application writing and information on potential fellowships. After registering with the website, business owners can apply for any available grants if their company meets the grant requirements. Be sure to check out the search feature that allows you to specify that you’re looking for grants for Latino entrepreneurs.
6. Hello Alice
Hello Alice’s Small Business Funding Center offers business loans, credit cards and grant opportunities to what it calls the “New Majority,” which are businesses owned by people of color, women, members of the LGBTQ+ community, immigrants, veterans and small business owners with disabilities.
It also works with the U.S. Hispanic Chamber of Commerce as part of the SBA’s Community Navigator Pilot Program, helping small Hispanic- and other minority-owned companies navigate the challenges of business ownership.
The company just launched the $70 million Equitable Access Fund (EAF) with the Global Entrepreneurship Network (GEN), backed primarily by Wells Fargo. EAF will offer credit enhancements, such as guarantees and loan loss reserves, to Hello Alice’s financing partners, increasing their risk tolerance. This, in turn, would allow them to offer credit to disadvantaged small business owners who otherwise couldn’t access it.
Many Hispanic business owners turn to community-based Hispanic-owned lending institutions. Insider compiled a list of these banks and credit unions, arranged by state.
8. Minority Business Development Agency (MBDA)
The MBDA operates out of the U.S. Department of Commerce and is dedicated to the growth and global competitiveness of minority business enterprises through its various business centers and programs. One ongoing initiative is the Access to Capital: Innovative Finance Projects, which promotes alternative funding methods and non-traditional lending sources.
9. U.S. Small Business Administration (SBA)
The SBA offers several financial resources to help small businesses, including Hispanic-owned companies, get the funding they need, including SBA-guaranteed loans. Business owners can use the SBA’s Lender Match tool to find SBA-approved lenders that offer capital options with competitive terms and lower down payments. The types of SBA loans available include:
- SBA 7(a) Loan. The 7(a) loan can be used for short- and long-term working capital, to purchase real estate, to refinance current business debt, and to purchase equipment, machinery, materials, furniture, fixtures, and supplies. The maximum loan amount for a 7(a) loan is $5 million, and eligibility factors are based on what the business does to receive its income, credit history, and where it operates.
- SBA 504 Loan. The 504 loan program provides long-term, fixed-rate financing for major fixed assets such as existing buildings or land, new facilities, and machinery and equipment. These loans are available through Certified Development Companies (CDCs), which are SBA community-based partners. The maximum loan amount for a 504 loan is $5.5 million; however, for some specific energy projects, borrowers can receive a 504 loan for up to $5.5 million per project for up to three projects, not to exceed $16.5 million total.
- SBA Microloan. SBA Microloans provide up to $50,000 for business startup and expansion. Lenders are nonprofit, community-based organizations, and each lender sets its own lending and credit conditions. Microloans can be used when business owners need working capital or to purchase inventory, machinery, equipment, supplies, furniture or fixtures. They can’t be used to buy real estate or pay debts.
10. U.S. Hispanic Chamber of Commerce (USHCC)
The USHCC and its network of more than 250 local chambers and business associations focus on promoting the economic interests of Hispanic-owned small businesses to aid their growth and development. The Hispanic Chamber also maintains a current list of grant and scholarship opportunities, capital and procurement opportunities, and small business resources.
With inclusivity and the state of minority-owned businesses presently a priority for many of the nation’s top corporations, keep your eye out for companies reaching out to help Hispanic small business owners.
For example, Verizon started its Verizon Small Business Digital Ready program to offer Hispanic entrepreneurs resources, grants and mentorship. In April 2023, Verizon Business awarded $10,000 grants to 25 Hispanic small businesses nationwide and mentored small business owners to teach them how to compete with big brands. Register to learn about more grant opportunities.
All lenders have their own criteria and requirements for loans and grants, so be sure to thoroughly research all your options. For more help, check out SCORE’s 12 Resources for Hispanic Entrepreneurs and find a SCORE mentor who can help guide you through business funding options.
This article originally appeared on Score.
