No Revenue Startup Loans for Minorities
With over 11 million minority-owned businesses in the U.S. generating more than $1.8 trillion annually, minority-owned business owners are rapidly seizing success. Before, there was a severe lack of opportunity. The Difference? Minority-owned businesses now have access to unique loan options, especially no-revenue startup loans, to help their businesses thrive.
Some of these options have always been available by large banks and lending companies. But unfortunately, these corporations seek alternatives that will make them the most personal profit and not what’s best for the overall economy. They see numbers, not people, and are especially reluctant to lend to disadvantaged or minority-owned businesses with minimal income.
The problem with that approach is it takes money to generate revenue and sustain your business. In fact, a recent survey found that out of 1,500 minority-owned companies, about 38.6% found lack of funding a significant bottleneck in growth. We at BitX Funding understand this predicament and want you to stay informed on the options you, as a minority business owner, have to access no-revenue startup loans.
What Are Minority Small Business Loans?
Loans and lending programs directed towards servicing businesses with at least 51% minority ownership qualify for minority small business loans. The purpose of these loans is to even the playing field and offer disadvantaged companies a chance to succeed. Some of these loans have more stringent requirements, such as all employees being of a given minority. Make sure to check the fine print and additional requirements when applying, especially for no-revenue options.
There aren’t any loans designed for specific minorities. Instead, various lending programs such as the Small Business Association (SBA) and non-for-profits offer financing options for minority-owned businesses in general. In some cases, you may get better opportunities from more traditional loans, so it’s always good to know your options. For instance, the SBA 7(a) program is an excellent option for minorities while being open to all small businesses.
Getting the Right No-revenue Startup Loan is Easy if You Know Your Options
There are a wealth of small business loan options if you know what’s available. The problem is the immense amount of options. To help you weed through the various lending programs, we’ve created this list of financing options with no income. Just remember that to qualify for startup loans you need a minimum of $50,000 in verifiable personal income, the income needs to be approved, and a FICO credit score greater than 700 is required to be approved.
SBA 8(a) Business Development Program
The SBA 8(a) business development program offers small business loans to small disadvantaged businesses. The program requires you to:
- Be a small business according to SBA’s size standards
- Not previously participated in the program
- Have at least 51% of the company owned by U.S. minority
- Demonstrate good character and potential
While the most practical option for minority business owners, the SBA 8(a) program has the most stringent requirements for revenue gain. The program doesn’t assign loans personally. Instead, it allows 8(a) certified businesses to be eligible for 5% of all federal contracting dollars without competition. For startup businesses, this remains a viable option. However, it may not offer resources as quickly as the methods below.
SBA Microloan Program
Another option from the SBA is the microloan program, designed specifically for minority startups. The revenue is minimal, offering an average of $13,000 per business. Despite this, it remains an excellent option to get the income necessary to launch your startup to success.
The loans aren’t given out directly by the SBA. SBA intermediary microlenders, usually community-based non-profits, offer assistance. Often these loans will come with required training on how to launch a startup business, making the resources a valuable option.
For minority business owners willing to do some research and hunt for specific options, grants are an excellent way to go. Grants come in many shapes, sizes, and periods. As a minority business owner, you have a unique niche to take advantage of and a much smaller pool of competitors. All that’s required is to search for grants relevant to your business, including non-revenue startup loan options, and apply with the requisite paperwork.
Getting the necessary cash flow can be challenging for businesses that use invoices to collect revenue over long periods. Invoice financing offers a way to get immediate benefit from customers, especially those who take their time paying. You take a loan against the outstanding invoice, getting up to 90% of the value upfront. The invoice is now the responsibility of the lender, who the customer pays. As a result, you receive the remaining money minus the lender fee when the customer pays the invoice.
For these reasons, invoice financing is an excellent option in place of a no-revenue startup loan when cash flow is incoming but not consistent.
No Revenue Startup Loans with BitX Funding
At BitX Funding, we’ve worked with hundreds of businesses and gotten them the funding they need to thrive in our growing economy. We know the difficulties involved in securing finance for a startup. Further, we understand and empathize with the position many minority business owners face in being unnecessarily denied revenue by more traditional lenders. That’s why we’re here to make sure you get the resources you need.
Our mission is to make sure small business owners have the revenue and resources to make a difference in the world. We want you to stay informed of your options and make the best decisions with the information available. Once you know what loan you need, we can offer assistance and set you up with a provider in as little as 24 hours. If you’re interested, call us at 800-824-2407 or contact us today!
Published by the Labate.io in Westport, CT
Written by Chris Davies