Link to El Nuevo Herald column in Spanish: Here

Over the last three weeks we have been addressing an issue recently reported on by the U.S. Department of Commerce Minority Business Development Agency regarding disparities in access to financial capital between minority and non-minority companies in the United States. If you didn’t have a chance to read either of the last two columns, you can access them at www.elnuevoherald.com/columnistas/manny-garcia-tunon. Today’s column is the third and final part of this series where we not only address the problem, but offer potential solutions and an open forum to discuss your experiences, questions or concerns. I am pleased to report that the responses I have received thus far have been extremely positive and solutions-oriented – a clear indication that our Hispanic community continually and proactively strives for ever-greater improvement and effectiveness. Whereas last week we looked at various sources of capital, this week we will focus on the requirements typically sought by lenders of borrowers and the local and national agencies and resources available to assist business owners with the process.

Typical Lender Requirements

Exact documentation will vary, so be sure to research your lenders’ requirements before submitting your information. It is important that the information you provide be presented as professionally as possible which includes proper formatting, editing, and using correct English. Common requirements include the following:

• Purpose of the loan.
• Description of your business.
• Financial statements (typically three years for an existing business).
• List your existing business debts.
• List your existing business’ accounts receivable and accounts payable.
• Amount of investment in the business by the owner(s).
• Projections of income, expenses and cash flow as well as the assumptions.
• Personal financial statements on the principal owners.
• Resume(s) of the principal owners and managers.

Available Resources

The Small Business Administration (www.sba.gov/espanol)

SBA does not directly loan capital to small businesses, but sets the guidelines for loans, which are then made by its partners (lenders, community development organizations, and microlending institutions). SBA guarantees that these loans will be repaid, thus eliminating some of the risk to the lending partners. Some of SBA’s guaranteed loan programs include:

7(a) Loan Program:

This is SBA’s primary and most flexible loan program, with financing guaranteed for a variety of general business purposes. It is designed for start-up and existing small businesses, and is delivered through commercial lending institutions. For a list of local 7(a) lenders visit www.smallbusiness3.com/financing

CDC/504 Loan Program:

This program provides long-term, fixed-rate financing to acquire fixed assets, such as real estate or equipment, for expansion or modernization. The financing is provided by Certified Development Companies (CDCs) which are private, non-profit corporations set up to contribute to the economic development of their communities. For a list of 504 Loan providers visit www.smallbusiness3.com/financing.

Microloan Program:

This program provides small, short-term loans up to $35,000 for working capital or the purchase of inventory, supplies, furniture, fixtures, machinery and/or equipment. It is designed for small businesses and not-for-profit child-care centers needing small-scale financing and technical assistance for start-up or expansion, and is delivered through specially designated intermediary lenders (nonprofit organizations with experience in lending and technical assistance).

Small Business Investment Company (SBIC) Program

SBA’s Small Business Investment Company (SBIC) Program offers long-term loans and venture capital to small firms. SBICs are privately-owned investment companies which are licensed and regulated by SBA. In addition to facilitating the difficult process of obtaining venture capital, SBA provides financial assistance to SBICs to stimulate and supplement the flow of private equity and long-term loan funds to small companies. Venture capitalists participate in the SBIC program to supplement their own private capital with funds borrowed at favorable rates through SBA’s guarantee of SBIC debentures, which are sold to private investors.

The Minority Business Development Agency (MBDA)

The Minority Business Development Agency (MBDA) is part of the U.S. Department of Commerce and is the only federal agency created specifically to foster the establishment and growth of minority-owned businesses in America. To review MBDA programs please visit: www.mbda.gov.

The Minority Business Roundtable (MBRT)

MBRT is a non-profit, national membership organization for CEOs of African-American-, Hispanic-American-, Asian-American-, and Native-American-owned top-tier businesses, representing a variety of trades and industries. Members hold positions equivalent to chief executive officer (CEO) or chairperson in their respective businesses. MBRT functions as the vehicle for its members to analyze and help formulate effective public policies that impact minority-owned businesses. You can visit their website at www.mbrt.net.

Tags: business, business resources, Entrepreneur, Entrepreneurial, Entrepreneurship, hispanic business, inspiration, Perspective

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