The Best Financing and Funding Options for Hispanic Business Owners
The U.S. Census Bureau has announced that Hispanics now represent the most rapidly growing segment of the country’s economy. According to the U.S. Hispanic Chamber of Commerce, Latino-owned businesses have grown 31.6% since 2012, more than double the growth of all American businesses.
With small business loans for Hispanics, as well as other economic opportunities, these business owners are getting more tools they need to run their businesses. Governmental and other resources that specifically support Hispanics and offer small business loans and grants for Hispanics have contributed to the growth of businesses launched by Hispanic entrepreneurs. Despite that, there are still barriers to entry and success for Hispanic business owners.
In this article, we’ll cover some of the major business loans and grants for Hispanic-owned businesses. With these options, you should feel more supported along your journey to entrepreneurship.
Small Business Loans for Hispanics
Here are some of the best loan options for Hispanic-owned businesses:
The U.S. Small Business Administration (SBA) teams up with local nonprofit lenders to make SBA microloans of up to $50,000 available to business owners. Many of the nonprofit intermediaries do outreach with Hispanic and other minority communities of business owners. These government-backed business loans come with low interest rates and six-year terms.
SBA Community Advantage Loans
This is another SBA program, providing up to $250,000 in capital, specifically designed to meet the needs of business owners in underserved communities. As a group that has been historically underfunded, Hispanic business owners can qualify for SBA community advantage loans by showing good credit and a strong business plan. The business’s asset size and collateral will not affect loan eligibility.
Accion is a microfinance organization that supports Hispanic businesses, among other minority-owned businesses. Providing loans of up to $50,000, its fully automated platform has made it very easy for Hispanic business owner to apply for loans. Accion also provides low-income business owners access to financial education and capital.
Opportunity Fund is a nonprofit organization similar to Accion. They provide microloans and community advantage loans in partnership with the SBA. They offer loans in as few as five days, and there’s an easy online application. For those navigating the language still, Opportunity Fund even has a Spanish version of their website. Opportunity Fund is currently active in 13 states with high Hispanic populations, including California, Florida, and New York.
The owners of Camino Financial launched their lending business specifically to help Hispanic entrepreneurs, after their mother struggled with financing for her chain of Mexican restaurants. Camino Financial works with small business owners who have a credit score of at least 550, that have been operating for at least nine months, and that generate sales of at least $30,000 per year. If you meet those requirements, you can get funding in as little as two business days.
Kiva has a unique business model to get $10,000 zero-interest loans into the hands of business owners around the world. Interested applicants must market their business to the community of 1.6 million individual lenders. These lenders can then choose to lend your company as little as $25 (and as much as $10,000), and you’ll have up to three years to repay them.
Grants for Hispanic-Owned Businesses
When you get a small business loan, you have to pay it back with interest. You don’t have to pay back a small business grant, but grants are also much more competitive than loans.
Here are some private and government grants for Hispanic small businesses:
This website is the largest repository of federal government grants. Most federal agencies that provide grants list the information on this website. Businesses in the technology or science fields are especially likely to come across opportunities here.
Small Business Innovation Research and Technology Transfer
The SBIR and STTR programs are government grants from five different federal government agencies. These grants are focused around tech and science and have a competitive application cycle. However, if you’re able to qualify, you could receive up to $1.15 million in capital.
USDA Rural Business Grants
Hispanic business owners who live in a rural area might be eligible for grants from the U.S. Department of Agriculture. These grants are available for starting or expanding a small business. You must have fewer than 50 employees and annual gross revenues under $1 million. You should contact your local USDA office for application details.
National Association of the Self-Employed
Small business owners can receive a grant of up to $4,000 through the National Association for the Self-Employed (NASE). You need to become of NASE before you can apply and demonstrate how the grant would help you achieve your business goals.
Amber Grant for Women
Hispanic women often face additional obstacles, related to both ethnicity and gender. The Amber Grant provides $10,000 in funding to 12 deserving female business owners each year. The 12 recipients compete for the annual $25,000 grand prize.
More Resources for Hispanic Business Owners
In your search for capital, here are additional resources for Hispanic-owned small businesses:
Minority Business Development Agency
If you wish to be connected with loan programs or other resources that help you penetrate new markets, you can contact local MBDA centers. Business specialists are available to assist Hispanic business owners compete for a contract, secure loans, identify a strategic partner, etc.
U.S. Hispanic Chamber of Commerce
Contacting your local U.S. Hispanic Chamber of Commerce can be helpful in your efforts to take out a business loan. Many of the chapters work with lenders and banks to administer loan programs for Hispanic business owners.
SCORE is a resource sponsored by the government and partly funded by the SBA. The site is available in Spanish and is designed to help Hispanic business owners grow their operations and navigate regulations that every business owner must understand. You can take advantage of business workshops or even find a mentor to help you create a business plan or navigate funding challenges.
The Latino Coalition
The Latino Coalition is a membership organization that provides helpful resources for Latino business owners. They do a lot of advocacy, lobby all levels of government on policies that will help Latino-owned businesses thrive. They also arrange networking events, which can lead to funding if you make the right connections, plus discounted business goods and services.
The Bottom Line
One of the most challenging aspects of starting any business is securing financing. Fortunately, there are numerous options for Hispanic business owners who need capital to launch or expand their business. Typically, loans are easier to get when you’re first starting out. Grants can be highly competitive. But no matter what means you use, the result will be a healthier business. After obtaining sufficient financing, you’ll be in a better position to help your business succeed over the long term.
Sally Lauckner is the editor-in-chief of the Fundera Ledger and the editorial director at Fundera.
Sally has over a decade of experience in print and online journalism. Previously she was the senior editor at SmartAsset—a Y Combinator-backed fintech startup that provides personal finance advice. There she edited articles and data reports on topics including taxes, mortgages, banking, credit cards, investing, insurance, and retirement planning. She has also held various editorial roles at AOL.com, Huffington Post, and Glamour magazine. Her work has also appeared in Marie Claire, Teen Vogue, and Cosmopolitan magazines.