How Microloans Help Entrepreneurs with Less Than Perfect Credit Start and Grow Their Business
Ever since the Great Recession began 2007, more and more minority entrepreneurs are opting to start their own business. According to a recent study conducted by four college professors, “Business Credit for U.S.Subprime Borrowers: How Much Does it Matter for Entrepreneurial Success”, self employment amongst minority entrepreneurs grew nearly 30% between 2000 and 2011. Nearly 22% of all self-employed individuals are minorities. This is encouraging news for minority entrepreneurs who want to start a business however many of them have been classified as “Subprime borrowers” by traditional banks.
Subprime borrowers often have less than perfect credit and traditional banks make it seem difficult if not impossible to obtain adequate financing to start or grow their business. Some may be discouraged by this but all is not lost. If you’re a minority entrepreneur, the key is educating yourself on what business financing options are available to you with your less than perfect credit history. According to the same study, minority entrepreneurs with less than perfect credit can benefit greatly from applying for and obtaining microloans to start and grow their business. The study also revealed the following:
· There are lenders that lend to minority entrepreneurs who are considered Subprime borrowers.
· These lenders often have less stringent credit criteria for approving loans therefore enabling minority entrepreneurs with less than perfect credit to get approved for funding that would otherwise be impossible to obtain from traditional banks.
· Minority entrepreneurs have a better chance at obtaining microfinancing from micro lenders to help them start or grow their business than they do obtaining small business loans from traditional banks.
The study also found that minority entrepreneurs with less than perfect credit experienced the following benefits from working with micro lenders to obtain microfinancing:
· Long-term financial success.
· Higher survival and sustainability rates.
· Higher revenue generation.
· The ability to create more jobs and hire more employees.
Take the First Step - Where to Go to Apply for Microloans
Now that you know you still have access to funding as a minority entrepreneur with less than perfect credit and understand the benefits you can experience by obtaining microloans, it’s important to know where to go to obtain that financing. Minority entrepreneurs can obtain microloans from Subprime lenders in their area and also organizations such as Accion USA
Tom GazawayTom Gazaway is the founder and CEO of Hawkeye Management. He is widely known as the country’s foremost expert at unsecured lending solutions for small business owners. Tom has written for Small Business Trends, Dun & Bradstreet Credibility Corp, SCORE, and has written many reports, white papers, and eBooks about small business credit and financing that are available at his Business Finance Lounge.
His company provides unsecured business funding and working capital solutions for both start-up and established business owners throughout the United States.
In 2013, Hawkeye Management made the Inc 500 list of the 500 fastest growing privately held companies in the United States. In addition to making Inc Magazine’s Inc 500 list, they were also named as one of the 50 fastest growing companies in the PA, NJ, DE tri-state area by Smart CEO Magazine.
Tom grew up in Marshalltown, Iowa and received his B.A. degree in Economics & Finance from Westmont College in Santa Barbara, CA. Currently, Tom lives in Blackwood, New Jersey with his wife Melanie and their three sons.