How to Get Small Business Loans for Minorities?

Basics of SME Loans

-Small Business Loans
-Small Business Finance
-Small Administration Loans
-Business Development Loans
-Government Business Loans
-VA Small Business Loans
-Business Acquisition Loans
-Basic SBA 7a Loans

Types of SME Loans

-Secured Business Loans
-Unsecured Business Loans
-Long term and Short term
-Minority Business Loans
-Fast Business Loans
-Free Business Loans
-Small Business Loans Online
-SBA Micro Loan Program
-Export Working Capital

Eligibility criteria for small business loans for minorities

As with every bank loan the eligibility criteria for this one also varies according to banks. For example Wells Fargo Bank, one of the leaders to women and ethnic minorities including Latino, Americans of African origin and business women, has its own set of regulations.

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You must have a profitable business and must have spent at least two years to demonstrate that you have gained insights into the field of business. You should have the personal as well as business credit intact and impeccable. The most point blank of all the things is that you should not have filed for bankruptcy in the last ten years.

The rest of the criteria set out by SBA are that the business should be 51% owned and managed by people of ethnic and racial minority or women. The average revenue for the preceding three years should not be more than $5 million and employee strength not to exceed 100 all put together. In some cases a collateral security may be required; however this will not be the only reason for its denial if at al

So what are the options?

As an entrepreneur you have many options to choose from. You can do a kind of survey in the loan market to make your decision. You have verified that the government loans are guaranteed by SBA (One of the major reasons for banks to get mo tivated). However SBA can guarantee the loans up to the limit of $75,000 only. This limits some banks asking for 75% guarantee to limit loans to just a million dollar.

There are private institutions such as the Small Biz Lending company. This institution can lend loans to minority business as per SBA guide lines as well as out side it also. You are advised to check their terms and clauses when you are in the decision making process. The self help groups that are spread through out the country will certainly come in handy when you are still in the process. They have come up with the intention of educating minority groups including women about their rights and options. The help groups walk you through preparing the proposal, documentation and presentation.

Interest rate consideration

The last option you need to weigh before you sign on the dotted line is the interest rate. Both fixed and variable rates are available. The rates will not cross 2.25 % for fixed type for less than 7 years maturity and the highest interest rate here is 4.75 % for prime plus four for amounts up to $ 50,000. Add to it the fees levied by the lender of up to 3.875 % plus the service charge of 0.5 % only.

In fact, a key finding of a study report by Kauffman Foundation is that minority business loans are very successful! Need any more proof of a government program's efficiency?