How to Get a Minority Loan

Minority loans benefit both women and ethnic minorities.

Going into business is a worthwhile endeavor that can be as difficult as it is rewarding. For women and ethnic minorities, there are special programs in place that will help to address those difficulties and set entrepreneurs on their way towards successful business ownership. Minority business loans are designed specifically to help establish diversity in business and encourage the growth of both ethnic minorities and women business owners.

Things You'll Need

• Business plan
• Internet access
• Financial records

Instructions

1. Assess how much money you need. If you don't already have a business established, consider what type of business you are starting and what the costs will be. There are several ways to determine what your financial needs may be. Speak with people who are familiar with the type of business you plan on starting, such as suppliers or other people who have successfully started a business similar to yours. Set up an appointment to speak with a local Service Corps of Retired Executives (SCORE) counselor who has experience with starting your particular type of business and can give you insight.

2. Write out a business plan. Lenders want to know that you have thoroughly thought out and planned a course of action for your business. When creating your business plan there are several key factors that you must include. Your business goals, a description of your business, a detailed analysis of the market, your marketing plan, the legal structure of your business, management profiles, and the short- and long-term financial prospects are all factors that must appear in your business plan.

3. Check your credit score. Your credit score will weigh heavily on any decisions that are made when attempting to obtain a minority business loan. Go to the websites of the three major credit bureaus; Trans Union, Experian and Equifax, and run a credit report and score. Report any disputes or areas of concern immediately to whichever bureau is the source of the disputed information. Use the reporting system on the bureau's website.

4. Fill out a loan application. Go to the Minority Business Development Agency (MBDA) website and click on the "Financial" link. From there, go down to the section on loans and review each link to determine the type of loan that is best for your business. The application process will vary from one lender and lending program to another, but you should expect to provide personal and business information, the amount of money you are requesting, the purpose of the loan and your banking account information.

5. Provide copies of your supporting documents. The documents will be determined by whether you are applying for a new business loan or a loan for an existing business. Make copies of your last three personal and business tax returns. Provide copies of your business income statements during the past three years as well as your personal income statements. You must also supply a listing of your accounts receivable and payable agings if applicable.

Tips & Warnings

• Failure to supply the proper documentation may prevent you from obtaining a loan.

References

• Minority Business Development Agency: Financing
• SBA: Write a Business Plan

Resources

• SCORE: Ask SCORE
• Experian
• Trans Union
• Equifax