An In-Depth Guide To Latino And Hispanic Small Business Loans

Camino Financial30 Jan 2024
An In-Depth Guide To Latino And Hispanic Small Business Loans
We are going to explore Latino and Hispanic Small Business Loans. We'll also delve into the resources and lending options available to minority entrepreneurs looking to start or expand their enterprises. Our article aims to empower you with information, providing a clear understanding of the lending landscape and potential routes to secure the financial support vital for your business's success. Let's demystify the process and harness the power of these loans to fuel your entrepreneurial dreams.

The Best 10 Hispanic And Latino Small Business Lenders

Here are some of the best lenders who offer loans to Latinx business owners. While not all are exclusive to Hispanic owners, they are still great options for the Latino community.

Camino Financial

Camino Financial's logo Our process is 100% online, allowing you to apply anywhere, anytime.
We say "yes" when other lenders say "no."
We offer:
  • Amounts: $10,000 - $50,000
  • Terms: 24 months
  • Interest rates: fixed interest rates
  • Type of payment: monthly payments
Our eligibility requirements are very easy to meet. For example, some of our minimum credit criteria are:
  • Time in business: at least 12 months
  • Minimum FICO score: 670
  • Average annual revenue: at least $30,000
Plus, we don't have any penalties if you pay early, and we don't require collateral. Are you ready to start an application? Apply For A Business Loan!

Small Business Administration (SBA)

SBA logo They offer:
  • Amounts: starting at $5,000 and up to $5 million
  • Terms: depending on the type of loan, but they are long
  • Interest rates: different interest rates based on the loan type, but they are some of the lowest in the market
  • Minimum credit score: you need an excellent credit score to apply
They have stringent requirements. There are several types of SBA loans, each with its own terms and conditions. Some of the most common types of SBA loans include:
  • 7(a) loans
  • 504 loans
  • Express loans
  • Microloans

Accion Opportunity Fund

Accion Opportunity Fund logo Accion Opportunity Fund is a non-profit supporting small businesses that are often overlooked. They offer:
  • Amounts: from $5,000 and up to $150,000
  • Terms: 3 to 7 years
  • Interest rates: starting at 5.99%
  • Minimum credit score: at least 600
They also provide tools and resources to help your business grow.

Wells Fargo

wells fargo logo Wells Fargo is one of the largest banking and financial services institutions in the United States. As a business lender, Wells Fargo provides various lending services to small, medium, and large businesses.
  • Amounts: up to $150,000
  • Terms: 1 to 7 years
  • Interest rates: 6.25% to 22.99%
  • Minimum credit score: 660

CDC Small Business Finance

CDC Small Business Finance logo CDC Small Business Finance is a non-profit organization that offers loans to businesses that may not qualify for traditional bank loans. They offer:
  • Amounts: $20,000 to $350,000
  • Terms: 5 to 10 years
  • Interest rates: Prime + 4.50% to 5.00%
  • Minimum credit score: at least 620

Latino Economic Development Center (LEDC)

Latino Economic Development Center logo LEDC is a non-profit organization that helps low- to moderate-income Latinos and other underserved communities. They offer:
  • Amounts: $1,000 to $250,000
  • Terms: 6 months to 10 years
  • Interest rates: starting at 6.5%
  • Minimum credit score: good or fair credit
They also offer training and help to make your business a success.

Funding Circle

funding circle logo Funding Circle is a peer-to-peer lending marketplace that allows investors to lend money directly to small and medium-sized enterprises.
  • Amounts: $10,000 to $500,000
  • Term: 6 months to 7 years
  • Interest rates: 8.9% to 35.9%
  • Minimum credit score: 660

Access To Capital For Entrepreneurs, Inc. (ACE)

Access to Capital for Entrepreneurs logo ACE is a non-profit community lender that offers loans and business advice. They offer:
  • Amounts: up to $250,000
  • Terms: 5 to 10 years
  • Interest rates: 6% to 10%
  • Minimum credit score: good credit history

DreamSpring

dreamspring logo DreamSpring is a non-profit that helps underserved business owners. They offer:
  • Amounts: $1,000 to $250,000
  • Terms: 24 to 72 months
  • Interest rates: 2.5% to 3%
  • Minimum credit score: 600
Their goal is to help business owners create jobs and build up their communities.

OnDeck

ondeck logo OnDeck is an online lender that offers term loans to business owners in various industries, providing quick and easy access to funding.
  • Amounts: $5,000 to $250,000
  • Terms: 6 to 24 months
  • Interest rates: 52.6% to 60.9% APR
  • Minimum credit score: 620

Hispanic Small Business Loan Eligibility Criteria

Generally, to receive loan approval, you will need to meet some common requirements:
  • Time In Business. Many lenders require that a business has been in operation for a certain period, typically at least one to two years. At Camino Financial, you only need 12 months.
  • Credit Score. A higher score generally suggests you're less of a risk to the lender. Usually, lenders require a score of at least 680. At Camino Financial, you only need a minimum FICO score of 670
  • Business Revenue. Lenders will want to see an annual revenue of $50,000 to $150,000 or more. At Camino Financial, you only need an annual revenue of $30,000.
  • Industry. Some lenders might not lend to businesses in specific industries, considering them as high-risk sectors.
  • Legal Compliance. Your business should be legally registered and comply with all relevant local, state, and federal regulations.

How To Apply For A Business Loan

Getting a business loan is a process you can manage with some planning. Here's a simple step-by-step guide to help:
  1. Research Lenders. Find lenders that offer loans for Hispanic business owners. Check their terms, rates, and loan amounts.
  2. Identify Why You Need The Loan. This will help you ensure you apply for the correct amount.
  3. Find Out If You Qualify. It's always better to check a lender's minimum requirements so you only apply with those you have a better possibility of receiving approval.
  4. Gather Your Documents. You will be required to submit various documents, including financial and legal documents.
  5. Apply For The Loan. Complete an application by sharing personal, business, and financial information. Follow the lender's instructions carefully and provide honest and accurate information.
  6. Follow Up. Provide any additional information and documents the lender may need. Examples are:
    • Business and personal tax returns.
    • Business and personal bank statements.
    • Business legal documents (e.g., articles of incorporation, commercial lease, franchise agreement).
  7. Understand The Terms And Sign. Once your loan is approved, ensure you fully understand the loan terms. If you like what the lender offered, sign the contract and wait to receive the capital.
Apply For A Business Loan!

5 Tips for Getting a Business Loan

Securing business loans can be easier with some strategies:
  • Be Aware Of Your Current Financial Situation. This includes knowing your business's revenue and profitability. Lenders will review these figures to determine your ability to repay the loan.
  • Keep Your Business And Personal Credit Scores In Good Shape. This can help you get better loan terms and even gives you a better chance of receiving approval.
  • Make A Strong Business Plan. Even if your preferred lender doesn't require this document, writing one is a good practice.
  • Explain How You'll Use The Loan. Lenders will want to know what the loan is for, so be clear and specific about where the money is going.
  • Consider Bringing On A Co-Signer Or Guarantor. This person agrees to take on the loan repayment if you can't, which can make lenders more comfortable with granting the loan.

The Importance Of The Hispanic/Latino Business Community In The US's Economic Growth

Hispanic and Latino businesses play a crucial role in the US economy. The US Hispanic Chamber of Commerce reports that over 4.37 million Hispanic-owned businesses are in the US, contributing over $700 billion to the economy each year. The growth of Latino-owned businesses is also remarkable. According to Stanford University's State of Latino Entrepreneurship 2020 report, Latino-owned businesses have grown 34% over the past 10 years, compared to a 1% growth for all others. These underserved communities contribute to the economy, create jobs, and foster innovation. This shows the enormous potential of Latino and Hispanic businesses and the importance of lenders offering business loans for Hispanic and Latino owners. For these reasons, organizations and lenders that support Latino and Hispanic-owned businesses through loans and resources are critical. They help these businesses thrive and, in turn, further boost the economy.

5 Grants For Hispanic Business Owners

There are no grant opportunities specifically for Hispanic or Latino business owners, but here we list some great programs you can apply to.
#DidYouKnow Grants are like a gift. They're money given to help your business grow. And the best part? You don't have to pay them back. But remember, you usually have to use them for specific things.
  1. Comcast RISE. They help women and minority-owned businesses. They award a total of 500 grant packages that include business consultations, monetary grants, technology makeovers, and more.
  2. The National Association Of The Self-Employed (NASE). They help self-employed individuals. They offer Growth Grants of $4,000.
  3. Small Business Innovation Research (SBIR) & Small Business Technology Transfer (STTR) Programs. They help businesses in the tech and science industries. They award grants of up to $1.15 million.
  4. USDA Rural Business Grants. They help business owners who live in rural areas. There is no maximum grant amount.
  5. The Amber Grant. They help women-owned businesses. They give $10,000 monthly grants and an annual one of $25,000.
Learn more about Latinx business grant opportunities here.

More Resources For Latino Business Owners

Apart from loans and grants, there are other ways to find money for your business. Let's look at some places that want to help Hispanic business owners.

GRANTS.GOV

GRANTS.GOV can help you find grants given by the government. If you're a Hispanic business owner looking for money, it's a good place to start.

US Hispanic Chamber of Commerce

The US Hispanic Chamber of Commerce wants to see Hispanic-owned businesses succeed. They can teach you about entrepreneurship and connect you with others. They can also help you find business loans for Latinos.

Minority Business Development Agency (MBDA)

The MBDA is part of the US Department of Commerce. They want to help minority-owned businesses, including Hispanics. They can help you find money, contracts, and markets.

Digitalundivided

Digitalundivided helps Latina and Black women start and grow small businesses. They offer programs, advocacy, and partnerships to help you succeed.

The Latino Coalition

The Latino Coalition (TLC) is a non-profit organization that advocates for the interests of Hispanic businesses in the US. They provide training and networking opportunities for Latinx entrepreneurs.

SCORE

SCORE is a non-profit organization funded by the SBA. It gives free mentoring, workshops, and resources so that entrepreneurs can start or grow a business.

National Association Latino Community Asset Builders (NALCAB)

NALCAB is a national network of more than 200 non-profit organizations that serve diverse Latino communities and look to develop their economy.

Community Development Financial Institutions (CDFIs)

Community Development Financial Institutions, or CDFIs, help businesses in communities that need it most. They are like banks that offer affordable financial services and products. CDFIs also advise on how to handle your finances and teach you about running a business. So, with a CDFI, you get the funds you need, plus the knowledge to help your business grow.
#DidYouKnow Camino Financial is a CDFI.

Camino Financial's Blog

Camino Financial not only gives small business loans for Hispanic owners. We also share educational resources on our blog to teach you how to manage money, run a business, and find the proper funding.

The Help Hispanic Small Business Owners Need

Minority business loans have shown themselves as an essential resource for Latinx entrepreneurs, opening the door to possibilities and growth.
At the heart of these financing opportunities is Camino Financial, a dedicated small business lender.
So, if you're looking to fuel your business ambitions, remember that with us, a business loan can be more than a possibility - it can be your next step towards achieving your dreams. Apply For A Business Loan!  

FAQs

What is a minority business loan?

A minority business loan is special funding for business owners who are part of a minority group. Like Latino business loans, these loans help minorities who want to start or grow their businesses.

Can a foreigner get a business loan in the US?

Yes, a foreigner can get a business loan in the US. It might be a bit harder than for a US citizen, but it's doable. Some lenders might ask for things like a visa or a co-signer who lives in America. Others, like the ones offering business loans for Latinos, are more open to working with foreigners.

Can immigrants get a business loan?

Yes, they can! Immigrants can get business loans in the US. There are many groups and programs that want to give loans to Hispanic small business owners and other immigrants. Every lender has its own rules about who can get a loan, but there are definitely options out there.

What qualifies as a Hispanic-owned small business?

A Hispanic-owned small business is usually owned (by at least 51%) by someone who is Hispanic or Latino.

Are there any personal loans specifically for Latinos?

There are no personal loans specifically created for Latinos because, in the US, that could be discrimination against other applicants. That said, there are many lenders and financial institutions that are Hispanic and Latino-owned, like the Latino Community Credit Union, that you can apply with.
 
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