The Small Business Administration has recently announced a new microloan program aimed at helping minority owners and female owners of businesses to receive financing, so as to help grow their companies. Here are some of the particulars about this new microloan program which may be of interest to you.

Purpose of the New SBA Loan Program

The federal government has recognized that there is a shortage of loans being offered by lending organizations. In addition, it is felt that far too few of these loans are reaching eligible minorities and female owners of businesses. A study has shown that women business owners typically start up their companies with about half the capital available to men, and that they’re only able to acquire about 6% of external funding compared to what males can acquire. It’s also known that women make up about 40% of all the small businesses in the US, yet they receive less than 5% of all business loans.

Growth of Minority-Owned Businesses

A great many more minority-owned businesses are springing up around the country, and this has now reached the point where minority owners comprise approximately one-third of all business owners nationwide. However, it is still very difficult for minority owners to acquire the funding they need, because they have fewer collateral assets, and generally lower credit scores as well. This makes it very difficult to obtain funding from conventional banks.

The US Department of Commerce discovered recently that minority-owned businesses are disapproved for loans at a rate three times greater than the national average. The idea behind the new SBA loan program will immediately raise the total limit on available loans from lenders considered to be intermediaries. This will allow for a great many more loans to be distributed to minorities, and it will also increase opportunities for hands-on training to be delivered to minority business owners.

Are You a Minority Person Seeking Business Ownership?

We may be able to help you financially if you’re a minority person seeking business ownership. Contact us at Increase Lending today, so we can discuss some options which you may be eligible for.