Over the last several years, many small business owners – regardless of their backgrounds – have probably noticed that it hasn’t been easy for them to obtain financing from traditional lenders for a number of reasons. However, it seems that the U.S. Small Business Association is now redoubling efforts to increase opportunities for entrepreneurs to find the funding they need, and this is especially true of minorities who run their own companies.
The SBA recently decided to renew its ongoing partnership with the Minority Business Roundtable, an organization designed to help small businesses run by minorities to succeed, according to a report from the government agency. Already in the 2014 fiscal year, the SBA signed off on small business financing to more than 15,600 minority-owned independent companies, with the value of those loans totaling some $6.5 billion. In all, these accounted for about 28 percent of all lending the agency did, including 12.9 percent of all its microloans.
“The Urban Institute recently conducted a study that found that women and minority-owned businesses are three to five times more likely to be approved for an SBA-backed loan than a conventional loan. We know that providing lending and access to federal contracts to minority businesses can lift up entire communities,” said SBA Administrator Maria Contreras-Sweet. “I’m determined to get more loans and federal contracts into the hands of entrepreneurs who reflect the diversity of America.”
Other assistance extended
Meanwhile, the SBA has also tried to improve the ways in which it offers lending to economically disadvantaged companies, the vast majority of which are owned by minorities, the report said. That continued a trend seen in the 2013 fiscal year, when the federal government awarded more than 8.6 percent of its total contracts to businesses falling into this designation, and those deals were worth about $30.6 billion altogether.
Owners of any background who want to put together a solid financial situation, which will allow them to better qualify for financing of any kind, might want to consider the ways in which cutting costs for expenses such as small business insurance can help them. For instance, if they can find more affordable errors and omissions insurance coverage, they might be able to free up thousands of dollars per year that can be contributed toward improving other aspects of the company.