BUSINESS CREDIT HOW-TO
How to Build Business Credit
Step 1: Improve Your Business Fundability
a. Lexis Nexis Reports
b. Business Name
b. Business Phone Number
d. How to Obtain a 411 Listing
e. Business Address
f. Business Website
g. Business Email
h. The Secretary of State’s Office
i. Business Bank Account
j. Your EIN and Business Entity
k. SIC and NAICS Codes
l. Incorporating Your Business
m. DUNS Number
Step 2: Business Credit Reports
Step 3: Obtaining Vendor Credit
Business Revenue Financing
Business Funding and Grants for Minority Entrepreneurs
a. Native Americans
b. African Americans
c. Latino Americans
d. Grants Available to All Minorities
e. Government Grants
How to Build Business Credit
Business Credit Benefits
Building business credit has many benefits. A credit profile can be built for a business that is completely separate from the business owner’s personal predict profile, doubling the borrowing ability. Credit limits and capacity on these business accounts is much higher than with consumer credit. Business credit can also be built very quickly with limits 10-100% of consumer credit , and an initial profile only takes 30-90 days to get set up. When done correctly, business credit can be built without a personal credit check. Business credit can quickly be obtained regardless of personal credit quality, and there is no personal credit reporting of business accounts. Most business credit can be obtained without the owner taking on personal liability, or a personal guarantee, which means in case of default, the business owner’s personal assets can’t be pursued. Anyone can see your business credit reports, so having business credit makes you more credible for: Prospects, clients, competitors, lenders, credit issuers and those interested in buying your company. Almost any business can get business credit as long as it has an EIN number and entity setup. You don’t need collateral or financials to start a business credit account, and you can be a startup business. You just need to know the proper building steps.
3 Steps to Build Your Initial Business Credit Profile
Step 1: Improve Your Fundability
When building an initial business credit profile it’s essential that you meet credit issuer’s criteria. Your personal credit isn’t being used for approval, and you have no business credit yet established. This means that what is on your application is the only thing being reviewed for approval, so your application must be very strong to ensure approval. Have you ever applied for a business credit card and gotten an automated instant approval? Lenders and credit issuers have an unpublished set of standards in their computer system that you must meet in order to get approved for business credit. How fundable your business is will determine if you get automated approvals, or denied. Some fundability factors include: The type of business entity you have, the type of business phone number you use, business phone number, if your business phone number is listed in certain directories, the type of address your business has, the type of business licensing your business has, the congruence of your business records, the types of business lending references you have, whether your business bank account is set up, the way your business website and email are set up, and your EIN, DUNS, and BIN number.
Even if you are fundable, most business loans applications get denied because of potential fraud concerns, not because you don’t qualify. Business Lenders combat fraud by matching your company and application details against other data they have from places such as: LexisNexis, Dun & Bradstreet, Experian, The Small Business Financial Exchange, Equifax, and ChexSystems.
Business Phone Number
How to Obtain a 411 Listing
You must have a professional-looking website and email address. Your business website domain needs to either be yourcompany.com or .net. Never use Wix or Weebly; you will need hosting through a hosting company like GoDaddy. You can buy a domain and set up a website in about a day. Larger hosting companies will provide services to help if you are inexperienced with this. make sure your business is registered with search engines such as YELP.COM, CITYSEARCH.COM, and ZAGAT.COM. It is also essential that your business has registration with 411 information. You also want to make sure that you have a Secure Sockets Layer (SSL), which is standard security technology for establishing an encrypted link between a server and a client. When filling out loan applications, you must know the number of years you have owned your business’s website domain and guarantee that it matches your WhoIS domain listing. Your business website’s search engine ranking and directory listings are also crucial pieces of information for loan applications. Updating your website layout, backlinks, and policies also makes your business seem more credible to credit issuers. Your business website must accept a wide range of credit card companies in order to be seen as credible. Principals listed on your website must match the public record with the Secretary of State, business licenses, and other public data. Consistency is key. Your business website also must have the McAfee, Verisign, and TrustE seal. In the 21st century, it is essential that your business has a strong social media presence. The number of reviews, ratings, check-ins, news coverage, online activity, likes, and followers that your business’s social media page receives will determine your business’s popularity.
Not having an email address or website will make your business appear uncredible. Your email address needs to be on the same domain as your website. Generic professional names work well, such as email@example.com or firstname.lastname@example.org. Don’t use search engines such as Gmail, Yahoo, or AOL to set up your business email. Don’t worry about checking yet another email address, you can have any email forward to any other email.
The Secretary of State’s Office
Business Bank Account
Your EIN and Business Entity
SIC and NAICS Codes
Incorporating Your Business
Aged Shelf Companies
Step 2: Your Business Credit Reports
Business Credit Reports
How to Prevent Declines
Visit: http://www.smartbusinessreports.com/ for a copy of your Smart Business report, which costs around $49-99. Find out how many trade lines are reporting, see if you have a business credit score assigned, see if you have an active Experian Business Profile, and check on recent inquiries.
You can purchase a copy of your Equifax Small Business Credit Report at: http://www.equifax.com/small-business/credit-report/en_sb. It typically takes more time to create a file with Equifax Small Business than D&B and Experian. This is why it is important to apply with the credit providers who report to Equifax.
Dun & Bradstreet
Obtaining a Dun & Bradstreet number (D-U-N-S #) begins the process of building your business credit profile with them. Your D-U-N-S # will also play an important role in enabling your business to borrow without a personal guarantor, and it is free at http://www.dnb.com/. D&B will “roll” this into a package and charge you $2,000 or more. You can also enroll for the DNBi SelfMonitor to monitor your credit during the building process. A subscription for D&B Self Monitoring is $39-99 per month.
Business Credit Scoring Factors
Business credit scoring factors are primarily based on payment history. Personal credit has five different components:
Payment history 35%
Credit mix 10%
Length of Credit History 15%
Accumulation of new credit 10%
These percentages matter because when you try to fix one component of FICO, it hurts another. Because trying to improve one factor hurts another, it is very difficult to get good personal credit scores. It usually takes people into their 40’s or so to get credit scores of 800. Business credit, however, is based primarily on payment history. Dun and Bradstreet scores are strictly based on how you pay.
Expect payment may come early 100
Payment is prompt 80
Payment comes 14 days beyond terms 70
21 days beyond terms 60Payment comes 30 days beyond terms 50
Payment comes 60 days beyond terms 40
Payment comes 90 days beyond terms 30
Payment comes 120 days beyond terms 20
If you get business credit accounts that report to agencies such as D&B, Equifax, and Experian, and you consistently pay your bills on time, you will build a good score which will drive future approvals.
Read and Understand Your Reports
What Influences Your PAYDEX Score?
D&B has created risk categories to make it easier to translate a PAYDEX Score into understandable risk groups:
PAYDEX 80-100: Low risk of late payment
PAYDEX 50-79: Moderate risk of late payment
PAYDEX 0-49: High risk of late payment
Based on changes to your PAYDEX, D&B takes a proactive approach to notify you when a change in your score is bringing you closer to a different risk category.
Improving Your PAYDEX Score
D&B Business Information Reports
Monitoring Your D&B Credit Scores and Reports
Business credit reports are not always perfectly correct. All of the major CRAs, including D&B, are committed to accuracy. However you won’t know there are errors unless you monitor your business credit reports. For D&B only, you can monitor your business credit reports via CreditMonitor, which currently only costs $39 a month. To purchase a business credit monitor, visit: dnb.com/products/small-business/credit-monitor.html. The costs of business credit monitoring can add up fast. At Experian, your best bet would be a Business Credit Advantage Subscription Plan, which currently costs $189 per year. To purchase a Business Credit Advantage Subscription Plan, visit: sbcr.experian.com/pdp.aspx?pg=Sample&link. At Equifax, you would use Equifax Complete, which currently costs $19.95 per month after an offer of 30 days for $4.95.To purchase Equifax Complete, visit: equifax.com/equifax-complete/Equifax. Add all of these plans together for the year and it is $468 for D&B, $189 for Experian, and $224.40 for Equifax for a grand total of $881.40. You can monitor your business credit at D&B, Equifax, and Experian through Credit Suite for considerable savings over what it would cost you at those CRAs all in one place. Credit Suite offers monitoring through the Business Finance Suite. See what credit issuers and lenders see so you can directly improve your scores and get the business credit and funding you need. Visit: creditsuite.com/monitoring.
Correcting Your D&B Credit Scores and Reports
If errors are bringing your score down, then correctly those mistakes will raise your PAYDEX score. Get a Business Information Report from D&B at: dnb.com/products/small-business/business-information-report-snapshot.html. After reviewing your Business Information Report, update the relevant information if there are mistakes or the information is incomplete. At D&B, you can do this at: dnb.com/duns-number/view-update-company-credit-file.html
Disputing Issues With Your D&B Credit Scores and Reports
D&B won’t change your business credit scores without proof. Disputing business credit report errors normally means you have to mail a paper letter. Be sure to include duplicates of any proofs of payment with it. These are documents like receipts and cancelled checks. Never mail the originals, always send copies and keep the original copies. Fixing credit report errors also means you specifically spell out any charges you challenge. Make sure your dispute is as clear as possible. If you need to mail anything in, then use certified mail so that you will have proof that you sent in your dispute. Be specific about the concerns with your report D&B wants you to go through D&B Customer Service to add payment experiences. D&B’s Customer Service contact number can be found at: dandb.com/glossary/paydex.
Step 3: Get Approved for Vendor Credit
There are Five Ways Build Business Credit:
Credit Line Hybrid
D&B Credit Profile
Unsecured Business Financing
You get to use your good personal credit and you don’t mind using a personal guarantee of yourself or guarantor, and you get physical cash credit cards such as Visa cards, MasterCard, or AMEX. With Unsecured Business Financing, you can get up to $150,000 with 0% rates for 6-18 months. You are getting five to eight actual credit lines that report to the business credit reporting agencies. Guarantees and startup businesses are welcome. To get unsecured business financing, vist: creditsuite.com/funding
Credit Suite Monitoring
Vendor Credit Accounts
How to Obtain Vendor Accounts
True Starter Vendors
Laughlin deals with corporate setup and compliance. Their company reports to Experian. Your business’s 411 listing and EIN number are the only materials required. Laughlin reports business credit in 30 to 60 days and offers Net 30 terms.
Quill Office Supplies
Quill Office Supplies sells Office, packing, and cleaning supplies. Quill reports business credit to D&B. You must place an initial order first unless a D&B score is established. Sometimes you will need to place up to 3 orders of $50 or more for them to approve you with no initial credit established.
Gempler’s and Office Depot sell work supplies and products. They report business credit to D&B. You must place an initial order over $50 dollars and select the “Invoice me” option. Then, they will pull your credit. If you are not approved, pre-pay for your order and keep purchasing and choosing the “invoice me” option until you are approved for Net 30 terms.
Reliable Office Supplies
Reliable Office Supplies sells supplies and promotional products. Reliable Office Supplies reports to D&B, Experian, and Equifax. Place an initial order, then request your order be invoiced or billed to your company. They will then pull your credit. If you are not approved, keep ordering and requesting to be invoiced or billed The more orders you place, the better your chance of approval for Net 30 terms
Uline Shipping Supplies
Uline Shipping Supplies sells shipping, packing, and industrial supplies. Uline reports business credit to D&B. You must have your DUNS number, and they will ask for two references and a bank reference. The first few orders might need to be pre-paid to initially get approved for Net 30 terms.
Monopolize Your Marketplace
Monopolize Your Marketplace sells everything you need to know about marketing and business in a 10 audio CD set. They report business credit to Experian. Upon check out, choose “4 equal payments of $59.99” option. The first charge will take place in 30 days. You need a business bank account, EIN number, and deliverable address in order to qualify. Reporting business credit will take approximately 30 to 60 days.
Strategic Network Solutions
Strategic Network Solutions reports business credit to Experian. You will need a DUNS number, business license, and EIN number.
Summa Office Supplies
Summa reports business credit to D&B and Equifax. Summa requires a minimum purchase of $75 to report business credit. Approvals require an EIN number, entity, business address matching everywhere, business license if applicable, business bank account, and a DUNS number.
Wells Fargo has a secured credit card that will help you build initial business credit.
Behalf offers financing for your customers. They will report business credit to Experian, Equifax, and D&B.
Things to Remember
Vendor Credit Tier
Retail Credit Tier
Fleet Credit Tier
Cash Credit Tier
Responsible Credit Management
The Cost of Not Having Business Credit
Without Business Credit, how is Your Company Funded?
Traditional Bank Loans
Using personal credit to fund your business is a terrible idea. But if you don’t have business credit, you may need to explore such an idea. Using your personal credit for business expenses means more inquiries into your personal credit and a higher utilization percentage. Both of these can lower your personal credit scores. If your business fails, and nearly a quarter fail in the first year alone, then you still have business expenses on your personal credit cards. You could be out of business for years and still be paying off your business debts. For more information, visit: national.biz/2019-small-business-failure-rate-startup-statistics-industry
If you have the funds, then you can finance the start of your business, and if you have enough money, you can technically keep donating to the cause until your business becomes profitable. That wait could be for two to three years on average until a business turns profitable. Consider brand-new industries, which need to convince their prospects that they are providing a necessary good or service. That may take a very long time. If you have thousands of dollars just lying around, and you can afford to keep them tied up for years, then this could work. For more information, visit: freshbooks.com/hub/startup/how-long-does-it-take-business-to-be-profitable
Angels are much more informal investors than Venture Capitals. Angels tend to invest less and they often want a smaller percentage of the business in exchange for an investment. But you are still trading some of your control of the business for the money you need. Angels tend to be people you know well or people you don’t know if you are good at networking and can make a compelling case to relative strangers. Depending on angel investing means you are depending on investors having some discretionary income to plow into the business. This means it isn’t going to be an option for many people. It helps if your angels are at least middle class when it comes to income and savings. Angel investing needs some numbers behind it to really work out. But how many people have around $5,000 to just invest in an unproven business? After all, before the pandemic, the Federal Reserve estimated over a third of all Americans can’t cover a $400 emergency expense. For more information, visit: fool.com/the-ascent/banks/articles/does-average-american-save-money
Five dollars here and there is exactly how crowdfunding operates. You need to have success with crowdfunding, which is often a winner take all proposition. According to Stratista, the success rate for kickstarter businesses is only about one third. For more information, visit: statista.com/statistics/235405/kickstarter-project-funding-success-rate. Crowdfunding may be helpful, but don’t literally bet your business on it. Much like Venture Capital, straightforward businesses probably won’t do well. For example, a beauty salon is probably not going to do well on Kickstarter unless it’s goal is extremely modest.
You could try getting business funding from the Small Business Administration, however SBA Loans are hard to get. Plus, you need to have exhausted other means of raising funds first. For more information, visit: sba.gov/partners/lenders/7a-loan-program/terms-conditions-eligibility
Beyond the PPP, the SBA has other loan programs. But they have their own eligibility requirements and good business credit can help you get them. The Community Advantage program is good for small businesses in underserved markets. There is also Express Bridge, but your business has to be located within a declared disaster area. For more information, visit: sba.gov/partners/lenders/7a-loan-program/pilot-loan-programs
Grants usually do not have to be paid back, and the size of grants varies widely. You can check the USDA for rural grants, and grants.gov for more urban projects. Grants tend to have rather narrow applications. There tend to be grants for education and medical projects and certain types of developmental projects, but grants tend to not be for simply running a business. The US government won’t give out grant money for starting businesses as these are grants, not loans. Grants are also extremely competitive. Your business may obtain more government grants if you are a member of a minority or a veteran. You can also try state, city, and county governments. You may have more luck with helping to develop and gentrify local areas. Community and urban development tend to be popular angles for state and local grants. States and cities might provide grants to start businesses. It never hurts to check and ask.
Without Business Credit, How Does Any Business Know If Your Company Is Reliable?
Business Credit Can Fix These Problems
Business Revenue Financing
Revenue Lending Features
Benefits of Revenue Lending
Business Revenue Lending
Revenue Lending “Lender Sweet Spot”
Revenue Lending Lender Preferred Deals
High Risk Industries for Revenue Lending
Certain documents are required for revenue lending qualification, such as proof of U.S. citizenship, drivers license, social security card, voters registration card, birth certificate, permanent resident alien card, and medicare enrollment card. A signed application and agreement with a voided business check are essential documents in revenue lending approval.
You must provide three years of your business lease or proof of ownership and a full federal tax return, personal required if sole proprietorship, and business required if corporate.
Another Great Revenue Option: Purchases of Future Receivables
The Small Business Financial Exchange
Membership in the SBFE
SBFE Members and Data
Anyone who has the capacity to report information to the SBFE about their small business lending may become a member of the SBFE. Both types of financial institutions, including banks, credit unions and alternative lenders, are members. Doing business with exchange partners will benefit you, but if you do not do it correctly, it can also harm you. When you do business with members of the SBFE, you remove the risk of not getting any business credit. However, if you do not treat your business properly, it will not be favorable for the report representatives to get to your business. Members agree to report positive and negative facts at the same time. For more information, visit: sbfe.org/small-business-resources
SBFE Members (Lenders and Credit Providers)
SBFE Certified Members
SBA Members and Data Products
SBFE data-driven goods may be purchased by members. These products are produced by SBFE Accredited Vendors and offered by them. These commodities are then used for decision-making on credit. They are used to screen portfolios as well. For more information, visit: sbfe.org/certified-vendors
Why Should Merchant Acquirers Become Members?
SBFE data can enhance the ability of a merchant to price offerings efficiently by improving their risk management ability. They would be able to view the current activity of borrowing and a merchant’s debt status. The early warning signs that a merchant may be in financial trouble might be missing without the use of SBFE data-driven products. To verify the existence of a small company, merchants may use SBFE data-driven products. Information on one of the largest repositories of commercial data in U.S. industry, including name, address and contact information, can be accessed.. For more information, visit: sbfe.org/membership/merchant-acquirers
What Kind of Data do They Have on a Business?
How the Small Business Finance Exchange Can Help Your Business
Which Actions Can a Business Take?
You are accountable for your business credit as a small company. What data ends up on your business credit sheet, you power. You will regularly pay your bills on time, do business with members of the SBFE, and invite businesses you do business with to join the SBFE.
If you are registered, you can enter the SBFE, but your own data can not be self-reported. Through joining the SBFE, if you are lacking in that area, you can make better credit decisions for your business and add some credit. A company may take business credit actions that include obtaining vendor credit, obtaining business credit cards, applying for Credit Line Hybrid, and monitoring your business credit information.
There are multiple ways to monitor credit. One choice is to ask one of the business credit reporting agencies, including D&B or Equifax, for a business credit report, however this is expensive. Joining a credit monitoring program, like the one given by Credit Suite, is a more affordable option. Get continuous access, including your credit score and what affects it, to the data on your study. You can pay 90% less than it would cost you through the business CRA’s through visiting: creditsuite.com/business-credit-monitoring. Use the data you obtain from credit monitoring to search for ways to construct your business credit and refute any errors. Give a thorough summary of what is wrong to the department and inform them what the right data is. Send in copies of all available support products and retain the originals.
Business Funding and Grants for Minority Entrepreneurs
Challenges Minority Business Owners Face
Lower Net Worth
In general, the level of wealth for Latino and African Americans is 11 to 16 times less than for Caucasians. White business owners typically have more working capital when they start their businesses.
Lack of Collateral
For the most part, banks are not as likely to approve loans to applicants with less collateral to use against a loan. Lower net worth means less home ownership and fewer high-value assets to sell if a loan goes into default. This combination of less security and net worth means that banks will likely issue smaller loans that need to be paid back quickly., if they issue loans at all.
Businesses owned by minorities in locations that have not traditionally supported new business are not likely to get funding. This could also be an issue for anyone trying for a loan for a business in a poor location.
Little to No Credit History
Credit is a huge factor for banks when considering loans applications. Minority business owners tend to have lower credit scores when starting a business. Banks and other traditional lenders are also more likely to want to do business with entrepreneurs who they already know.
Small Business Grants for Women
Amber Grants for Women: ambergrantsforwomen.com/get-an-amber-grant/apply-now
The Amber Grant provides $4,000 monthly for qualified female entrepreneurs. The Amber Grant has a monthly application which requires the owner to share the story of how their business was created. The application fee is $15 and automatically enters the owner into a $25,000 grant at the end of the year.
The Cartier Women’s Initiative Award: cartierwomensinitiative.com
The Cartier Women’s Initiative Award is designed for women running early-stage companies for approximately two to three years. Early stage business refers to a business that has not made profits and revenue yet, or the business may still be a concept. The project must be an entirely original for-profit business creation, wholly conceived by the team. The business also must be incorporated in order to get approved. The project leader must be a woman in the capacity of Founder, Director General Manager, or Project Leader, and the main shareholder, CEO, or Chairman must be a woman in order to get approved. Up to two co-founders will be accepted, provided they are both women, and they will be expected to represent their project to the CWIA throughout the awards. Seven laureates from each region will receive $100,000, and the fourteen finalists will each receive $30,000 in prize money. A standard business needs $10,000 to get their business off the ground, so this is an amazing opportunity to affordably get your business started.
Grameen offers microloans specifically for women, which range from $2,000 to $15,000. Grameen also offers financial training and support programs for free. The company reports payments to Equifax and Experian. These loans help borrowers build credit, and Grameen boasts a 99% repayment rate.
Small Business Funding for Native American Entrepreneurs
First Nations Development Institute: firstnations.com/grantmaking
The mission of the First Nations Development Institute is to offer grants that help Alaska Natives, Native Hawaiians, and Native Americans. This organization helps with the application process in addition to providing funds. Currently, there are no open grants opportunities for this year, but that could change in the near future. For the latest information, visit their website.
Rural Business Development Grants
Rural Business Development Grants for Native Tribes offers technical assistance and training as well as funding for small rural businesses. Federally-recognized tribes are eligible and opportunity grants are limited to up to 10 percent of the total company’s annual funding.
Small Business Funding for African American Entrepreneurs
National Black MBA Association Scale-Up Pitch Challenge: nbmbaa.org/scale-up-pitch-challenge
The purpose of the National Black MBA Association Scale-Up Pitch Challenge is to help newer businesses that have an African founder who maintains equal ownership. The grand prize is $50,000, second prize is $10,000, third prize is $1,500, and the people’s choice prize is $1,000.
The Lemon-AID Foundation: marcuslemonis.com/lemon-aid-foundation
The foundation offers help to underserved communities and small businesses through the form of loans and equity investments. The foundation also intends to make grants to other charitable organizations with similar goals and missions. Entrepreneurs will be required to know their business well and be prepared to share numbers and prove why they qualify for Lemon-AID when applying.
Small Business Funding for Latino Entrepreneurs
Camino Financial: caminofinancial.com
Camino Financial specializes in loaning to Latinx-owned businesses. This organization offers awards up to $400,000. Camino Financial also offers instant quotes and funding within 24 hours.
Small Business Funding for Members of all Minorities
Union Bank: unionbank.com/business/lending/diversity-lending
Union Bank is one of only a few banks in the country to have a special purpose credit program under the Equal Credit Opportunity Act. Their Business Diversity lending Program is meant to empower women, minority, and veteran owned businesses. Union Bank’s products are meant for small businesses that are looking for loans of up to $2.5 million. To qualify, your business cannot have annual sales of over $20 million. Union Bank offers fixed rate, unsecured or secured term loans with terms of up to 7 years for UCC- and equipment-secured loans. Loans for up to 25 years for owner-occupied commercial real estate financing. Variable-rate, unsecured, or secured lines of credit subject to annual renewal. Get fixed-rate, unsecured or secured term loan with terms of up to 7 years for UCC- and equipment-secured loans. You can also get certification through them. Certification as a Woman Business Enterprise (WBE), Veteran Business Enterprise (VBE), or Minority Business Enterprise (MBE) may lead to government or large corporation contracts. If your company is privately held and at least 51% owned by a woman, verteran, or minority who is a U.S. citizen or legal resident, you can apply for WBE or MBE certification.
Accion has a microlending program meant to target low to moderate income business owners who are having a hard time accessing capital through traditional channels. Member organizations offer small business loans from $300,000 to $1,000,000. Funding is for pre existing businesses and startups. You can use the loan money for: Buying inventory; Buying or leasing equipment; Professional expenses, Hiring employees, and financing any expenses involved with being an entrepreneur. To qualify for a loan, you must: Be no more than 30 days late on any bills, loans, credit cards, or any other payment. If you are late, the total balance must be under $3,000; Not have any mortgage-rate adjustments due during the term of the loan; Not have declared bankruptcy in the past 12 months; Not have had any late rent or mortgage payments in the past 12 months; and not have gone through foreclosure in the past 24 months. Startups must have less than $3,000 in past-due debt, present two most recent pay stubs, a business plan with a 12 month cash flow projection, and a partner referral, such as SCORE or SBDC.
National Minority Supplier Development Council: bcfcapital.com/borrowers
This is a non-profit corporate membership organization that supports minority-owned businesses. The NMSDC has a grant program called the Business Consortium Fund, which is intended to support certified minority-owned businesses.
Backstage Capital: http://backstaecapital.com/apply/
This is a venture capital fund. Backstage Capital invests in businesses owned by women, people of color, and the LGBTQ community. Backstage Capital’s Entrepreneur Investment applications are viewed on a rolling basis. They have invested in more than 150 companies led by underrepresented founders.
The Foundation for Business Equity: fbequity.org
The Business Equity Initiative supports and provides funding for Black and Lantino Business owners. During the COVID-19 outbreak and current economic conditions, they provided an emergency fund to Black and Latino businesses in Massachusetts. This organization also works with economic partners on loan payment deferrals.
The Local Initiatives Support Corporation (ILSC): https://www.lisc.org/covid-19/small-business-assistance/resources/
ILSC is a non-profit organization that aims to revitalize communities in need through their programs. They support African American and minority-owned businesses across the country through its Small Business Relief grant program. They also offer mentorship and support services for small businesses by state.
Government Minority Grants
SBA Community Advantage Loans: sba.gov/funding-programs/loans
SBA Community Advantage Loans for Members of All Minorities is designed for small business owners who might not qualify for traditional financing. This organization encourages local, mission-based lenders like nonprofit organizations to make loans of up to $250,000. The SBA guarantees up to 85% of the loan and the interest is prime+6%. This is a good option for minority entrepreneurs who need a large amount of capital.
SBA Bailout Funding Under the CARES Act: congress.gov/bill/116th-congress/senate-bill/3548
SBA Bailout Funding under the CARES Act for all entrepreneurs addresses economic impacts of the COVID-19 outbreak. The bill authorizes emergency loans to distressed businesses. The bill establishes and provides funding for, forgivable bridge loans and provides additional funding for grants and technical assistance. Congress is currently discussing whether to add more money to the program.
Community Connect Grants: rd.usda.gov/programs-services/community-connect-grants
For entrepreneurs living in or operating businesses in rural areas without internet broadband speed of 10 Mbps or more, this Department of Agriculture grant can be used to help fix that.
Kiva is not just for minority entrepreneurs. Their mission is to provide business capital to underserved communities. Loans are crowdfunded in increments of $25. These loans are offered for 0% interest, for up to $10,000. Borrowers can market their goods or services to over 1.6 million lenders around the globe.
NIH Small Business Innovation Research (SBIR):
SBIR is a government initiative related to the Small Business Technology Transfer (SBTT). One goal of SBIR and STTR programs is encouraging innovation and entrepreneurship by socially and economically disadvantaged and women-owned small businesses. Eleven eligible government agencies must set aside some of their budgets so domestic businesses can engage in R&D with a strong potential for technological commercialization. Participating agencies include:
The Agriculture Department; The Commerce Department’s National Institute of Standards & Technology; Defense Department; Education Department; Department of Health and Human Services; Homeland Security; Transportation Department; Environmental Protection Agency; NASA; and the National Science Foundation.