Small business loans and funding programs for Hispanics

December 2021

Hello Hispanic Entrepreneurs! Are you a business owner looking to access business funding or fast working capital for your small business? We understand that starting and growing a business it's difficult for everyone. But it can be particularly complicated for Hispanic entrepreneurs. 

Despite being the fastest-growing demographic among entrepreneurs in the United States, Hispanic-owned businesses face challenges in accessing capital and, as a result, remain smaller.  As a result of this lack of funding, numerous organizations and government agencies have assisted Hispanic and minority business owners with loans, grants, and other financing options.

Below we will explain some challenges Hispanic business owners must know about and small business loans for Hispanics to get you started.

Hispanic entrepreneurship challenges

Obtaining business capital will depend on your finances and the ability to navigate the legalities and business funding requirements. Traditional funding options such as small business loans, credit cards, and lines of credit are not easy to obtain. And as a new business owner, you may face even stricter requirements.

The truth is. We know the challenges Hispanic Business owners must face. Below are some essential facts:

  • Statistics have proven there is an existing gap in access to business funding.

  • Stanford Business Study showed that in 2019, Latinos applied for financing: "28% of Latino business owners end up with funding, vs. 48% of white business owners".

  • Despite the language barriers and the funding gaps, Latino entrepreneurs have started small businesses at a higher rate than any other demographic.

We are not discussing the challenge the Hispanic business owners faced to discourage you. On the contrary, we believe every entrepreneur should have the same possibilities and access to resources. Now let's talk about business.

Five small business loans and alternative programs for Hispanics

Below we'll look at several small business loans for Hispanic entrepreneurs that do not require a lot of documentation or have an excellent credit history.

1. Community-based nonprofit groups

These funders offer loans that meet their mission statement, helping Hispanics underserved by traditional business financing to access business funding. They have flexible financial qualification requirements and typically low – or no – interest rates. You will likely need to meet specific conditions such as age, background, experience, or achievements, and there may be restrictions on how you can utilize the funding. There are often many applicants for a limited pool of business funding. You may have to prepare a business plan, a financial proposal, and other documentation.

2. Micro-loans

Nonprofit organizations, government agencies, or community-based investments offer micro-loan opportunities for Hispanic entrepreneurs. There are often restrictions on how you can use these loans:

  • Working capital and business growth are allowed.

  • Repaying existing debt or buying real estate is usually prohibited.

Eligibility requirements for micro-loans tend to be less strict than those required for a traditional bank loan. The borrower doesn't have to worry about putting up collateral. Micro-loans are an excellent option for businesses that don't have great credit. You can borrow up to $50,000 to start or grow a business.

3. Crowdfunding

Taking on debt isn't the only way to raise capital. Crowdfunding serves as a viable alternative to traditional loans. When crowdfunding, businesses accept small investments from their customers until they reach a specific financial milestone. Customers will typically receive special perks such as significant discounts or free products in return for their investment.

Crowdfunding is a great way to raise capital without debt and allows you to raise funds quickly. Look at platforms like Kickstarter but be aware that you are essentially making it easy for family, friends, and fans to loan you small amounts of money. Crowdfunding is unlikely to work for you if you don't have that social circle.

4. Peer-to-peer lending

This option connects small businesses with funders, including individual investors and institutional investment groups such as hedge funds or investment banks. Depending on the platform, peer-to-peer can provide an excellent way for small businesses with solid credit histories to access funding. Consider that you typically need a strong credit rating, where the 700+ range is preferred.

5. Merchant cash advances

If you are already in business – even for just a few months – and have steady revenues but your credit history isn't great, a Merchant Cash Advance, also known as MCA funding or cash advance, maybe the best option. MCA funding focuses primarily on your incoming revenue. Business owners with past bankruptcies or low FICO scores can still be approved.

When paying back to the funder, a predetermined percentage will automatically be deducted from your daily sales until you pay the advance. You must have a business bank account to qualify for a cash advance. Also, you'll have to meet some requirements regarding monthly business revenues. 

How to apply for fast working capital loans today?

If you're looking for business financing to fit your small business needs, a way is to contact One Park Financial. You can check if you prequalify for our fast working capital programs if your business has been open for at least three months and generates a monthly income of $7,500. The application process is typically fast and can be done online by filling out our prequalification form.

One Park Financial supports the Hispanic community! Once you fill out the form and prequalify, we will connect you with a financing expert with whom you can assess the needs of your business and determine the best financing options for your venture. One Park Financial will work with its financial partners to get you an offer. Dare to finance your dreams today!