Minority Loans and Grants

Steps for Obtaining a Minority Loan or Grant

Money is the life blood of any company. In order for your company to grow and be healthy it must have access to the capital it needs. These are some steps for a minority owned company to acquire the minority loans and grants.

In addition to the generic steps of creating a corporation and writing a business plan you must let the world know that you represent a minority controlled company. Most states have a "Diversity Vendor" program. Register with the diversity office in your state. The state has many minority loans and grants available. In addition, register in the CCR, the central contractor registery (www.ccr.gov). This is a Federal site that keeps a database of businesses available to perform work for the government. After you leave the CCR acquire a DUNS number from Dun and Bradstreet. When that is done you can start looking for money. Minority loans and grants are available from the website www.grants.gov. From grants.gov you can directly locate minority loans and grants made by the Federal government or grants given to the states by the Federal government.

There are minority loans and grants available from the private sector as well. The computer programs Grant Gate and Federal Money Retriever (http://www.grantgate.com/) provides two computer programs that make it easy for you to search for private sources of minority loans and grants. These programs not only locate the organizations that hand out the money but also generate the form-letter necessary to make contact the grant organization and start the funding processes. With the Grant Gate software you can locate organizations that give money in your area and then narrow the search by social status such as minority or veteran status. Both Federal Money Retriever and Grant Gate are free of charge.

Another source of minority loans and grants are social networking sites. Websites like Linkedin and GoBig and LendingClub offer a chance to connect with individuals who are business investors, "Angels" as they are called. The advantage of using an Angel investor is the lack of formality and paperwork overhead. The right Angel won't even require a credit score and won't care about any other business ventures that may have failed. The proper Angel investor can lend strictly on the strength of the business plan. An Angel Investor works out nicely when you only need small amounts of money for such things as equipment purchases or marketing but they can also workout nicely for larger amounts.

Another popular way of generating business capital is real estate financing. If the business owner owns a home they can refinance the home and get the cash out for the business. As an additional benefit, if the loan is structured properly the owner can deduct the loan to the business as an expense of running the company. If the company runs at a loss the owner can write off the loss as a personal expense. There are additional ways of getting the money your company may need up to and including selling shares in the company, family or offshore investors.