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Business Loans for Minorities. Black Business Loans, Hispanic Business
Loans, and Minority Business Contracts with the Government or Major
Corporations.
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Minority
Small Business Loans FAQ's
What
are the Fastest Ways to Receive a minority business loan for
small business?
Develop
a business plan. Save your own money and think about getting a home equity
loan if you have good credit and a home.
Take
these steps first because any sophisticated investor will want to know
how much of your own money you have invested in your business, before
they give you any money.
Think
about it, why would anyone invest in your business if you aren't willing
to invest in your own business? A business plan also shows other potential
investors that you are serious and have researched your industry and business
market.
Next
think about getting personal loans from friends and family without getting
further into debt, by offering them a stake in your company, or equity
financing.
Make
sure you have every thing in writing with either family and friends on
both equity or debt loans, because you don't want to risk personal relationships.
Make
sure you inform them that the average business takes 5 years to show a
profit, and that they know the risks - 75% of startup businesses fail.
I have
bad credit so how can I receive a minority small business loan?
Try
to repair your credit. However, if you don't have a lot capital, and you
will have a hard time raising financing because of bad credit, think about
joining a church or community credit union to borrow small amounts of
capital. This way you know you can repay to build up a track record with
these untraditional credit institutions for larger financing sources in
the future.
Next
join small business training programs which make you eligible for financing
after you go through an extensive business development program.
Groups
to seek out for minority small business loans with good track records
are Project
Enterprise in New York, and the legendary Accion
lending program on a global basis.
Accion
is responsible for a lot of the business startups in the U.S. Hispanic
community and now they are expanding their services worldwide into Third
World countries like Africa, Caribbean, and South America. They are open
to help people of all ethnic groups.
What
are the best resources to approach for minority business loans?
Some
of the leading sources to receive minority small business loans are The
Bank of America, Banco Popular, and Wells Fargo banks. Also if you are
making good revenues in your business it is time to look at 2nd stage
financing like Angel Investors at Angel
Forum, and Venture Capitalists. Check out the Business grants section
of this site and also www.grants.gov.
Also
join our ezine Keep it Real Profitable to
get alerts on the latest minority business grant and minority small business
loan alerts along with the top tips on web marketing and search engine
promotion.
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Please
note also see Kamau's Business Blog
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after reading this section
Business
Loans and
Major Contract Articles
-
Growing Your Business with a Line of Credit
-
Growing Your Business and Your Bottom Line Through
Minority Certification
-
How
to Sell to New York State - Including
Great Sources for Any Small or Minority Business Funding.
-
Diversity
2000 Connects Small Business Suppliers with Large Companies.
-
SBA
Plans Matchmaking Sessions for Small Business.
New Business Finance Articles
Growing Your Business with
a Line of Credit
Growing Your Business with a Line of Credit If you think
you can't get funding for your business, think again. Many small businesses
need only small sums of money to get moving or continue operation for
things like meeting payroll, upgrading a website or much needed technology.
Having a line of credit would be a perfect solution for these challenges.
But very often when it comes to asking for help, small business owners
count themselves out of the game before they even try. A line of credit
could put you on the road to fluid cash and success sooner than you think.
What Is A Line Of Credit?
Small business credit line financing, also called an operating
loan, provides a business with money to cover day-to-day expenses. As
funds are used, the established credit line is reduced. Once approved,
you can access your revolving line of credit with a quick phone call or
provided checks.
Where To Find One
Did you know you could qualify for an SBA Express Loan
line of credit through your local bank? The Small Business Administration
(SBA) offers promising businesses that might not otherwise qualify for
business loans the chance to get the money they need to make their business
continue to succeed. The loans are obtained with no collateral and minimal
paperwork. Within 36 hours, you will know if you qualify.
Real Finance Results
Gayle Naftaly, owner of Access Office (www.accessoffice.net)
wanted to grow her business support company by developing a new logo,
website and marketing materials. She was surprised to find out how easy
it was to receive a line of credit at her local bank. She says that a
good credit score was all she needed, and after just a few days she had
the money she needed.
"Business has tripled in gross sales since then with more
clients, bigger clients and I now have better cash flow" says Ms. Naftaly.
What makes a line of credit great is that it stays with you. It is something
you use on an as-needed basis. As Ms. Naftaly says, "If you can manage
money, a line of credit will definitely help you grow your business. You
use it, replenish it and use it again."
Getting Help
Did you know that there are organizations dedicated to
helping you succeed and can help you to obtain a line of credit? And yet
most business owners, mired in the day-to-day activities of running a
business, are not even aware of their existence. One such organization
is ACCION. According to ACCION's New York branch, "ACCION New York contributes
to the economic development of the New York metropolitan region by providing
microloans and business advisory services to individuals and small businesses
that do not have access to traditional sources of credit." On their website,
www.accionnewyork.org , you can read about their mission, success stories
and get contact information. ACCION has offices in various US locations
as well as worldwide.
How To Improve Your Credit Rating
If you cannot qualify for a line of credit due to poor
credit history, there is hope. Begin with cleaning up your current credit.
Negotiate rates and payment plans with each credit entity. Soon you will
receive offers for credit cards, possibly secured. Get one and always
pay on time--always means always. Pay as much above the minimum as possible.
Soon you will find your FICO score (standard measure of credit worthiness)
rising and it won't be long before you can have access to an SBA Express
Loan or line of credit. Getting a line of credit should be an easy part
of your business growth plan.
Growing Your Business and
Your Bottom Line Through
Minority Certification
Are you leaving money on the table? If you are a business
owner who is a woman or a member of a minority and you have not become
certified as a Minority or Women-Owned Business Enterprise (known as M/WBE),
you may be missing out on opportunities.
Reasons to Become Certified
Why do you need certification? Well, maybe you don't.
Certification lets others know that your company is what you say it is-a
minority and/or women-owned business. Chances are your average customer
is not going to ask you for certification. Certification is required,
however, when you want to do business with companies or government agencies
that have supplier diversity programs and want to ensure a level playing
field for women, minority, or disabled-veteran owned businesses. While
you may not have considered this as an avenue for your business, you will
want to be ready to seize an opportunity, should one arise.
M/WBE Certification will also give you the ability to
expose your business to potential customers that you may not have considered
nor had access to before. Many of the qualifying agencies create meet-and-greet
opportunities, directories and notify you of upcoming opportunities. This
alone makes the sacrifice of time and minimal fees, when going through
the certification process, well worth it.
Certification Requirements In order to be eligible for
certification, the basic requirements are:
-
" The business must be at least 51 percent owned,
controlled and actively managed by minority group members (Native
American, Black, Hispanic, Asian- Indian, Asian-Pacific, Aleut, Eskimo,
or Native Hawaiian)"
-
In business for at least one year
How long is my certification valid?
Recertification practices, as well as fees, vary according
to the certifying agency. For example, the state of New Jersey requires
recertification upon your one-year anniversary. However after that first
recertification, your status is valid for five years provided you submit
your supporting documentation by your anniversary date each year.
Certifying Agencies Choosing a certifying agency should
depend upon your type of business and the opportunities you want to seek.
Your city and state government offices have certification processes, help
and opportunities.
There are a myriad of other agencies as well such as the
NY/NJ Supplier Development Council (formerly known as the NY/NJ Purchasing
Council). As per their website, “The Council strives to expand business
opportunities for minority-owned suppliers by linking them with purchasers
in the public and private sector. As an advocate for both its suppliers
and corporate members, The Council fosters relationships between corporate
decision makers and targeted minority suppliers.”
Are All Certifications Recognized By All Agencies And
Companies Seeking M/WBEs?
With all these certifying agencies, you may want to know
if all agencies and companies recognize all certifications. The short
answer is not necessarily. You must check with the requesting agency or
company. For example, in New York there is an agreement between the NYC
Department of Small Business Services and The NY/NJ Minority Supplier
Development council called the New York City Fast Track Certification
How long is my certification valid?
Recertification practices, as well as fees, vary according
to the certifying agency. For example, the state of New Jersey requires
recertification upon your one-year anniversary. However after that first
recertification, your status is valid for five years provided you submit
your supporting documentation by your anniversary date each year.
As posted on their website, “The New York & New Jersey
Minority Supplier Development Council, Inc. ("The Council") and the New
York City Department of Small Business Services (SBS) are now promoting
"Fast Track certifications" that will enable Council-certified suppliers
to increase their contracting opportunities in the public sector.
The City and The Council signed a Memorandum of Understanding
(MOU) in an effort to increase the certification of minority-owned businesses.
Under the agreement, businesses certified by The Council as a Minority-Owned
Business Enterprise (MBE) will receive expedited approval of their certification
applications with the City… Council-certified suppliers will have greater
access to contracting opportunities, better preparation to compete for
City contracts, and extra navigation in the public procurement process.”
This partnership is great news for a small business looking
to expand its opportunities. Many such opportunities exist, but be sure
to ask the certifying agency where the certification will be recognized
and question the companies providing opportunities what certifications
will be accepted. Be sure to do this before making a commitment to become
certified with any agency as many fees, if required, are not refundable.
Getting Help
The process of applying for M/WBE Certification may be
daunting for some. It may require more focus and time than you are able
to spare, but don’t give up.
There is a tremendous amount of assistance available for
you on both a free or fee basis. Each agency provides its own sources
of assistance. In New York City at the official website, www.nyc.gov,
you can find applications, help documents, email addresses and contact
numbers for assistance.
They also provide monthly training seminars where you
can get help from trained certification specialists for free. To get help
and information on M/WBE certification in your locale, begin with your
city and state government. Check their websites or call for help. Your
local libraries will be able to assist as well.
The internet is a cornucopia of information. Use any of
the various search engines such as Google (www.google.com) and Yahoo (www.yahoo.com).
Changing the word phrases as you search, i.e. minority certification,
mbe agencies, or minority business opportunities, will pull up different
results giving you a wider array of information.
There are also tremendous local organizations that are
ready and willing to give you assistance. Begin with the Small Business
Administration and their local arms known as SBDCs or Small Business Development
Centers, often times located within the city colleges (SBA.gov).
Your local library is a tremendous resource as well.
There are times when all you need is someone to pull you
through the process. An executive, administrative or virtual (remote)
assistant can work wonders in this area, from researching the qualifying
agencies and fees to helping you to complete each step of the application.
Choose someone thorough and detailed because a detained
application can cost you time, money and missed opportunity. If you are
qualified for certification and you don’t get this done you’ve left money
on the table, possibly thousands of dollars or more. Can you afford not
to become M/WBE Certified?
Are Business Plans
Important to Get Funding?
It would be much easier to simply say that in every situation,
a business plan is an integral part of your attempt to get funding for
your business. But the truth is there are plenty of examples of business
owners who have successfully secured funding without having to present
a business plan first.
Whether or not you'll need a business plan in order to
secure funding really depends on where you plan to seek that funding.
Although every situation is different, the times when you'll likely need
to be prepared with a business plan include when you're seeking business
funding from investors such as Venture Capitalists and Angel investors,
from a government-sponsored program, and from a bank.
If you have an extremely rich relative or friend who has
so much extra money that he or she doesn't mind the possibility of wasting
several thousand dollars or more, you'll probably be able to get your
hands on that person's money without having to produce a business plan.
Don't laugh or shrug this off as nonsense because such a scenario happens
more often than you can imagine!
You might also be able to secure a business line of credit
from the bank where you've set up your business accounts without having
to first present a business plan. But a line of credit is much like a
credit card with a high interest rate and it's not something you'll want
to use to make expensive purchases.
Why do you need a business plan?
If you know right now that you're not one of those lucky
few who have access to unlimited funding with no strings attached or that
you'll need a larger, more affordable source of funding than a business
line of credit, you had better get started on your business plan.
You've probably heard by now that a business plan acts
as a blueprint or a roadmap for your business and it's true - a business
plan can help your business stay on track. Putting together your business
plan actually forces you to get the "idea" of you business out
of your head and onto paper. Oftentimes, the process of developing a business
plan can result in your ability to see your business in an entirely different
perspective. The process will also help identify potential risks so that
you're better prepared to deal with them should they arise.
Why do banks and investors need a business plan?
Basically, those whom you're asking to invest in the future
of your business want proof that the business is viable or that your plans
to expand are worthwhile. After you present your case, they'll scrutinize
it, and double-check all your projections. They'll try to find holes and
miscalculations now before putting their money at risk.
Before putting together your business plan, it's a good
idea to think about your intended audience. You may want to put more emphasis
on certain sections depending upon who will be looking at it.
For example, if you seek funding from Venture Capitalists,
you had better put together a compelling Executive Summary. VCs receive
hundreds of business plans a month and with each one being in the neighborhood
of 50 pages long, they simply don't have enough time to read through every
one that crosses their desks.
Most often, they'll stop reading at the Executive Summary
and if they don't like what they've read, they'll toss your hard work
in the shredder! If they do continue reading, they'll probably next focus
on the team you've put together. Many VCs believe that with the right
management team, any business is capable of producing a healthy return
on their investment.
A representative from a bank on the other hand likely will
focus on the business plan's financial details. Bank representatives will
carefully evaluate your projections to ensure they are based in reality.
What they're going to care about most is that your business will have
the cash flow it needs on a consistent basis in order to repay the loan
obligation.
It's better to have than to not have
Even if you've read or have been told that your request
for funding won't require a business plan, it always is a good idea to
put one together anyway. Whether you're just starting your new business
venture or you're planning a major expansion, by doing so, you're showing
that you're taking your business venture seriously. And if you take your
business seriously, others will be more inclined to do so, too.
How to Prepare a Business Plan
The simple answer to the question of how to prepare a business
plan can be summed up in one word - carefully. A business plan is one
of the most important documents you'll ever produce for your business
and it's the one that's going to help you get the funding, the expertise,
and the direction your business needs to succeed.
There are several approaches you can take when preparing
a business plan. You can hire someone to put it together. You can purchase
software or you can do it the old-fashioned way - by typing the information
into your word processor and using spreadsheets to calculate your figures
and produce your charts and graphs.
Hiring Someone
If there is money in your budget, you might consider hiring
someone to write your business plan for you. With prices ranging from
$1,000 or so up to $20,000 the most difficult part of this approach is
going to be finding a qualified individual that you can trust to handle
the task. If you decide to hire someone, don't think for one minute that
you won't be involved in the process because you will.
Whoever prepares your business plan will need to gather
from you the basic information necessary to put the business plan together.
He or she will need to know about your product or service, what you believe
is the market for your product or service, the names and qualifications
of the members of your executive and management team, your advertising
plans and more. You'll have to read the final product for accuracy and
to make sure it delivers the appropriate message and you'll want to proofread
it, too.
Preparing the business plan yourself
Although it will take a huge chunk of your time, putting
together your own business plan is an excellent opportunity to gain an
in-depth knowledge of where your business is at right now and where you
want it to be in the future. It's alright if you don't know the first
thing about putting a business plan together because there's certainly
no shortage of sources you can turn to for help. Libraries and bookstores
have plenty of books that offer examples and advice. You'll also find
an abundance of information online and through the Small Business Association
and other organizations that support business ventures.
If you choose the "do-it-yourself" route, be
sure to allow yourself ample time to complete this task. If you need your
business plan in 2 days and you haven't yet started, you had better believe
in miracles! Actually you won't need a miracle, but you might not end
up with as good a business plan as you need and that could present a problem
for you.
If you allow enough time, the overall task will be easier
if you break it down into manageable chunks. That's going to be easy because
every business plan consists of the same basic sections: executive summary,
market research, competition, management team, financial information,
etc. Working on a section at a time will help you stay focused.
Although it's the first section in the Table of Contents,
consider writing the Executive Summary last. This section needs to be
strong, persuasive, and complete and you might find it easier to summarize
and express the information needed in this section after you've finished
compiling the entire document. Like it or not, some of the people who
read your business plan may not go beyond this point so as far as importance
goes, the Executive Summary ranks high.
Your readers will also appreciate it if you incorporate
bullet points, graphics, charts and other formatting when it makes sense
to do so. This will help to break up the text and make the document easier
to read. Don't use a fancy font and use bolding and italics only as necessary
to help stress a point.
Always allow someone else (other than an investor) to read
your finished product. That person should be someone who can point out
sections that sound confusing or that don't make sense. After incorporating
any changes that person makes, put the business plan aside for a few days.
Then reread it to make sure it presents your business in the best possible
light and finally, proofread it carefully.
Use software
Software won't eliminate the task of thinking about your
business, but it will take you through the development process step-by-step.
Most business plan software works by requiring you to "fill in the
blanks." When you're finished, you push a button and the software
incorporates what you've written into the stored, standardized text that
will makes up the bulk of the business plan.
Now that you know how to prepare a business plan, chose
the method that'll work best for you and get started!
How to Establish Business Credit
by the vTeam, Kamau Austin Publisher of Raise
Business Cash Fast and Raise
Cash Fast
If you think that between all your personal credit cards
you’ve got plenty of available credit to use as you need to run
your business, you’re making a huge mistake. Using your personal
credit to run your business is a bad idea since you’ll be personally
responsible for any business debt you incur. This might not be something
you’re worrying about right now, but the day may come when your
business cannot repay that debt.
Personal Credit Score vs. Business Credit Score
Another reason why it’s not a good idea to use your
personal credit for business purposes is because doing so may damage your
personal credit score. Among other things, the more over-extended you
are, the lower your personal credit score. Personal credit scores range
from a low of 350 to a high of 850 and the lower your score, the higher
a risk you’ll pose to lenders. To offset that risk, lenders charge
you higher rates of interest which means home and auto loans and credit
card purchases will cost more.
Your business can have a credit score too and the most
common business credit score is D&B’s PAYDEX score which is
used to indicate the degree to which a business is likely to be delinquent
making payments to its creditors.
Instead of focusing solely on a 3-digit number which ranges
from a low of 101 to a high of 670, this business credit rating system
also identifies a “Class” value of 1 – 5 and a “Percentile”
value of 1 – 100. In general the lower the number, the greater the
risk of delinquency.
To calculate a D&B business score, payment data from
the creditors you do business with is gathered and compiled and based
on that information, the business credit rating is calculated. This system
works great for those businesses that have already established credit
and are actively purchasing and paying bills.
But few creditors are going to sell your business something
on credit until the business has established a good track record of payments.
So in a sense, the D&B credit score is like putting the cart before
the horse. That’s why it’s important to start establishing
business credit before you even go into business.
How to Establish Credit for Your Business
First of all, your business should be set up as a separate
entity with a separate business address. That’s what incorporating
is all about. If you don’t know the difference between a LLC and
a subchapter S corporation, then you probably skipped the step of putting
together a business plan.
If so, then before you can go any further, you’ve
got to take a step backwards. It’s an important step so quit trying
to avoid it. A business plan has several purposes. Most importantly, it
forces you to take a serious look at what you intend to do and how you
intend to do it. If you can make your business look good on paper, you
increase the chances that your business will do well in the real world.
The business plan is also what’s going to help you
attract investors; those individuals who will give your business the capital
it needs to get off the ground. Besides putting together the business
plan, make sure you’ve applied for a business Tax ID number and
any business certificates and licenses you’ll need to properly operate
your business.
Making Business Purchases
Once you’ve secured funding, you’re ready to
make purchases. With some effort, you may be able to find creditors willing
to extend credit to your business based on your personal credit history.
Try and focus your efforts on larger companies that regularly report credit
activity to the credit reporting bureaus like D&B and Equifax. Then,
start making business purchases from these companies but more importantly,
start developing a pattern of making regular on time payments.
If you aren’t having luck finding the type of creditors
described above, then applying for a small business loan is another effective
way to build business credit. Again, that business plan is what you’ll
need to help secure that loan. You’ll be able to make purchases
using the funds from your loan and your business will begin building credit
as you repay the loan on time and as agreed.
Soon enough, you’ll be building business credit and
you’ll be able to use these creditors and lenders as references
on the credit applications you fill out in the future on behalf of your
business!
When Should You Apply
For a Business Loan?
by the vTeam, Kamau Austin Publisher of Raise
Business Cash Fast and Raise
Cash Fast
There's this saying that "It takes money to make money"
and whether you believe it or not, it's true. If you already have an established
business or you are planning to start a new venture of your own, there
will come a point when you will need money to operate or expand that business.
Perhaps you've reached that point already.
There are all sorts of reasons why your business might
be ready for a business loan including for the sole purpose of establishing
and building credit. It's very likely in fact that the list of reasons
for needing a business loan is nearly as long as the list of the different
types of businesses that people own and operate. And just as you would
find if you were applying for a personal loan, once you start shopping
for a business loan you'll quickly realize that you have several options
from which to choose.
In an effort to simplify matters, financial institutions
like to think of business loans in terms of longevity which is why you'll
often see business loans categorized as short-term, intermediate, or long
term loans.
Short term business loans - provide immediate
working capital that a business can use to help get a business off the
ground or past temporary cash flow problems that result from seasonal
fluctuations or when a business loses one of its bigger revenue generators.
Loans of this nature usually are repaid within a year.
Intermediate loans - provide a business
with the capital it needs to operate on a day-to-day basis. It can be
used to cover payroll, to purchase new equipment such as computers or
filing cabinets and chairs, to buy inventory, or expand a product line.
Intermediate loans typically are repaid within 1 to 3 years.
Long-term loans - are typically taken
by established businesses that are planning to expand. Such funds are
commonly used to acquire land, other property and even other businesses.
If you're in the apartment rental business, you might seek a long term
business loan to make needed repairs and updates to the complex. Long
term business loans typically are installment loans with a 3 - 7 year
repayment period.
Government backed business loans - are
another funding source that can be used for any of the purposes mentioned
above. These loans are, up to a certain limit, guaranteed by the granting
body. Since these loans often have favorable rates, sometimes they're
used for refinancing purposes.
If you've decided that now is the time to apply for a business
loan, you might not want to head over to your neighborhood bank quite
yet. Along with your loan application, you most likely will be asked to
provide additional documentation. If you haven't gathered together the
documents you'll need to support your request for funding, now is the
time to make that project your highest priority.
Of course, every lending decision is unique but most business
loan applications will need:
Loan Request
You definitely want to give this some thought before approaching
a lender. You've got to be prepared to clearly and concisely explain the
amount of money you are seeking and what your business intends to do with
it. Never make the mistake of requesting "the most the bank will
lend my business." Lenders also will want to see that you are committed
to success which is why they'll expect you to put up some of your own
money.
Business Plan
New businesses as well as existing ones will be expected
to submit a comprehensive business plan along with the loan request. Lenders
will look at the market for your product, your management team, and they'll
want to see that you're projecting sufficient cash flow to repay the business
loan you seek.
Financial papers
Established businesses will need to show income tax returns
for the past 3 (and perhaps 5) years, a complete list of assets and liabilities,
and credit references. A new business won't have these documents therefore
the business owner will probably be required to provide personal equivalents.
Incorporation papers, a list of collateral, and other materials
may also be required to complete your business loan application package.
Your lender will advise you as needed. To keep the loan approval process
moving along, you'll want to quickly produce any and all additional documentation
the lender requires.
Good luck!
Financing outside the Box
by the vTeam, Kamau Austin Publisher of Raise
Business Cash Fast and Raise
Cash Fast
It used to be that the only place a new or existing business
could turn when it needed money was a bank. Fortunately, that's all changed
and nowadays business owners have several funding sources available to
them.
That's good news especially if your company is just starting
out or if a previous request for funding has been denied. In addition
to financial institutions, venture capitalists, friends and relatives,
and your personal savings account, here are several other financing options
that may be suitable for your business venture.
Angel Investors
Angel investors are groups of private investors that provide
seed money for young, start-up businesses. These investors are typically
made up of groups of friends or business associates that prefer to align
themselves with the types of businesses with which they have experience.
You won't find a formal network of angel investors as they tend to operate
at a regional level, preferring to be in close proximity to the business
they're financing.
If you're looking for angel investors, you'll have to make
your intentions known and some good places to start are at area business
incubators, colleges, nonprofit organizations and state or regional agencies
that focus on business development. You might also locate suitable angel
investors through venture capitalists.
Angel investors take on the role of silent partner and
in exchange for their willingness to invest in risky start-up ventures
they expect to be paid around 20 - 25% of the revenue or equity. Many
prefer to take an active role in the business, either as consultants or
mentors or as part of the Board of Directors. Their relationships with
entrepreneurial ventures typically last no longer than 5 - 10 years and
most will finance around $500,000 and on occasion, up to $1-million.
Factors
Factoring is an arrangement whereby a company sells its
Accounts Receivables to a company that specializes in factoring. The company
sells its AR at a discount, which is usually about 80%, in exchange for
cash. The factoring company then becomes responsible for collecting on
the accounts receivables at the full value. After the factor has collected
all monies, it delivers to the company the balance minus its fee. The
fee that factors charge typically ranges between one and a half to five
percent of the face value of the Account Receivables.
The company that sells its receivables benefits because
it is able to get cash quickly - often within 10 days - which is much
faster than waiting for a business loan to be approved. The factor benefits
too because the money it makes is pretty much without risk. Rather than
worrying about the company's current financial condition, a factor cares
more about the creditworthiness of the customers that the company it purchased
the receivables from does business with.
SBA Financing
SBA financing is another source your small business can
turn to when it needs funding. It's an especially attractive loan option
if you are operating a very small business or a woman- or minority-owned
business. SBA loans are guaranteed by the government in the event of default.
There are many benefits of securing a loan through the
SBA including lower down payment requirements and lower interest rates.
The interest rates offered are typically a few percentage points over
prime. Depending on the type of financing secured, there may not be any
prepayment penalties either.
There aren't any restrictions on the way you can use the
SBA financing therefore it can be a cost saving solution if you need to
refinance existing debt. And unlike bank loans which on average often
have to be repaid within 3 years you can get up to 11 ½ years to
repay an SBA loan. With a longer repayment period, your monthly payments
will be much lower. That means you'll have more money each month to put
to good use.
Another benefit if SBA financing is that you may be able
to apply through its Low Doc program. This program offers loans up to
$100,000 and has been designed to expedite the loan process by minimizing
the amount of documentation needed and shortening the application form.
As a business owner you will continually be challenged
to come up with solutions to the problems that are sure to arise with
every new day. If one of your challenges is securing business funding,
perhaps you'll find the perfect solution in one of the three financing
options presented here.
Resources
to Gain Government and
Major Corporate Contracts
These
Sites are a Great Starting Point to Research Government Contacts
www.fedbizopps.gov
- This is a great resource to begin your research into government contracts.
www.sba.gov
- The Small Business Administration.
www.exim.gov.
- to obtain money to export and sell products to foreign countries, check
out the Export-Import Bank of the United States, or The Overseas Private
Investment Corporation (OPIC) at www.opic.gov.
www.dla.mil
- great resource to become a seller to the US government focusing more
on military type of buyers.
www.sba.gov/INV -
Find venture capital for a new or existing business, at the Small Business
Investment Company (SBIC). These are privately-organized and privately-managed
investment firms that are licensed by the Small Business Administration
(SBA). They have their own capital, and with funds borrowed at favorable
rates through the federal government, SBICs provide venture capital to
small independent businesses, both new and established.
*** Register as a Minority
Business with IBM and
AT&T and all Federal Minority Business contracts ***
==================================
Major Minority Contracts with IBM
contact Ms. Javette Jenkins at: javette@us.ibm.com
Major Minority Contracts with AT&T contact Mr. Fernando
Hernandez at: fhernandez@att.com
Microsoft contact: G Winston Smith
winstons@microsoft.com
==================================
"How
to Sell to New York State"
Including
Great Sources for
Any Small or Minority Biz Funding
The following information was given at a seminar given by N.Y. State,
Empire State Development's Division for Small Business, "How to sell
to New York State". However, some of the Links are great for any
small or minority owned firms to get contracts or loans with the government.
If you visit the following sites, they will lead you through the process.
Some of that
$26 billion coming to NYC to rebuild the WTC area has to go to firms that
are certified as W/MBE. The contracts are to go to a diverse group of
businesses to repair the downtown WTC area. Some contracts are slated
for "disadvantaged" businesses.
www.nylovessmallbiz.com
- Empire State Division for Small Business
www.nyscr.com - NY State
Contract Reporter that tells what NY State is buying
www.empire.state.ny.us
- for information on NY state certification
www.sba.gov/gc - the
U.S. Small Business contracting site and federal certification
www.fss.gsa.gov - the Federal Supply
Service for non technology sales
www.fts.gsa.gov -
the Federal Technology service for technology sales
www.nycenet.edu/
selling to NYC board of education
The money is there. Visit those sites and find out who is buying what
you are selling.
"Diversity
2000 Connects
Small Business Suppliers
with Large Companies"
If
you are looking to supply products and services to large corporations
or public agencies, surf over to Diversity 2000 and look into becoming
involved in the bidding process. This web site boasts the largest database
of companies supplying and buying products and services. The site looks
good but like anything on the net, first see if you can a referral before
buying any subscriptions. To see the site Click
Here
SBA
Plans Matchmaking Sessions
for Small Business
In
the hopes of providing an economic boost for small business, the U.S.
Chamber of Commerce and the U.S. Small Business Administration have
launched the Business Matchmaking Program. Sponsored by HP, the program
is designed to bring small businesses together with government agencies
and private companies in face-to-face appointments regarding specific
business opportunities.
This
initiative is expected to give small businesses a chance to win billions
of dollars in government contracts by giving them an opportunity to
get in front of legitimate buyers with legitimate buying needs.
The
matchmaking program will feature two-day regional events in 15 cities
around the country, starting in March. In each region small business
owners will have pre-scheduled, individual appointments with buyers
from federal, state and local government agencies, as well as private
companies. Before the events, small business owners and buyers complete
online profiles to provide information on what each has to offer. Based
on the profiles, the matchmaking system will create the best possible
matches and set appointments.
In
addition to the preset appointments, the matchmaking events will provide
small businesses valuable insight on financing options, access to technology
resources, and educational seminars on a variety of relevant topics,
such as contracting with the federal government, access to capital,
international trade, business planning and marketing. Government agencies
and private companies will also set up exhibits to provide additional
information to attendees.
The
Business Matchmaking Program is also supported by the Hispanic Business
Roundtable, National Black Chamber of Commerce, Women Presidents' Organization.
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