By Caroline Knecht
Though financial times have been tough, a variety of business capital options are available to diverse businesses to help them expand or even get off the ground. It takes money to make more money in the world of business. Getting that initial seed is increasingly difficult in the post-recession economy, and more so for minority- and women-owned businesses. According to the National Small Business Association, only 59 percent of small businesses obtain sufficient financing for their needs. Whether it is to start a new business or expand on an existing enterprise, securing capital is a vital component to the success of any business. The current status of the American economy has closed or restricted many traditional outlets to capital. Banks are much more conservative with their lending, investors and venture capitalists are often hesitant to get involved. A recent study found that women business owners were more likely than men to use home equity and personal lines of credit to fund their businesses. Use of these finances are traditionally frowned upon, but have become obvious and easy-to-access options for many business owners or prospective entrepreneurs. Fortunately, there are an increasing number of alternative means to secure funding for small and diverse businesses without resorting to personal lines of credit. Securing capital can be the ticket to taking your business to the next level in 2012. Here are a few ways to think outside the confines of traditional business lending and help your business grow to its potential.
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SBA Loans
Organizations
Loans from the Small Business Administration (SBA) have been a popular choice for small businesses for decades. SBA-backed loans took a sharp hit in the recession, but the Small Business Jobs Act created more funds, higher loan limits, allocations for commercial real estate refinancing, and more opportunities for small businesses. Small businesses can improve their chances for approval with a wellwritten business plan, personal assets that can be used as collateral. The number of SBA loans is again on the rise, so it’s worth applying even if you have been denied previously or if your business needs have changed.
M/WBEs can often receive capital assistance from business and vocational organizations that they are members of, namely the Minority Business Development Agency (MBDA). The MBDA is opening 30 MBDA Development Centers across the country. These centers can assist you with securing capital through lenders, SBA loans and even grants. Last year, MBCs helped their clients gain access to more than $800 million in financial packages, including working capital, equity investments, and bonding.
MBEConnect Profiles I Winter Issue
Turn to your local Chamber of Commerce, as well as the United States Hispanic Chamber of Commerce, National mbeconnectmagazine.com