How do you determine if your small business is a minority? The answer is simple. Are you an Asian, Hispanic, Pacific Islander, African Indian or Alaska Native, or African American, and are you the sole owner of your business? If so, your business qualifies for a minority. The same rule can apply if you have 51% of your business owners who are a minority (or more). People who hare in the minority are in luck when it comes to minority small business loans. Women also qualify for minority small business.

There are funds that people set aside to lend to minority small business owners. If you find yourself in the category of being a minority, you’re actually far, far ahead of the game. The Minority Business Act is a federal agency which says, “Hey, we want to help those who are a minority small business get ahead.” People who are interested in small businesses and are in the minority have access to a special set of loans.

What do you need to keep in mind when applying for these loans? They look to see the loan can be repaid (i.e., that you have a way to pay it back and that you’ll pay it back on time). They look at your sales records that you have on file (so be sure to bring a lot of sales records with you!). If your business is fresh up from the ground they’ll want to see your business plan. Even if you aren’t just starting your business, it might not hurt to have some of the small business loans complete.

What do borrowers look for? They look for everything. They look at your personal spending habits (where does that money go every morning – to coffee?). They look at your credit record (which could hurt you if it’s low; so if it’s low, be prepared to apply for multiple loans). They look at any real estate that you have (that doesn’t mean they’re going to want to see your house – that means they need to know that you have one), your liquid assets, your tax returns (yuck – you just want to show everyone those, right?) – and your personal financial statements. (Another yuck).

Before you start applying for minority small business loans keep all those in mind. You do not want to have to find them later. It’s actually a good idea to keep all of the above in a fireproof box at your house for future records. Also include a detailed plan of how you’re going to repay the lender if you can – lenders always like to see this.

When you finally get the desired loan, check the following: what date the loan will be due, how much you must pay per month, the interest rate, and what happens if the loan is late. If you’ve checked all of those and you agree with the terms (if they aren’t on the paper, ask questions and demand that they be in the contract), then you’re free to sign the loan of your choosing.
Good luck securing your minority small business loan!