SBA Minority Business Loans

Application for a SBA minority business loan.

Congress created the Small Business Administration (SBA) in 1953 to encourage, assist and protect the interest of small businesses. The SBA's goal is to help Americans get started in their own business and a big plus to that for minorities is the SBA minority business loans programs. Though SBA loans are available for everyone, the SBA gives a great effort in making sure that a great percentage of SBA loans go out to minorities through their SBA minority business loans programs. They have many special programs that are geared toward minorities to make it easier for them to get a loan. This is done by requiring less criteria to obtain their loan which guarantees that they will have just as equal chance as others to obtain business start-up financing as part of their SBA minority business loans. One way the SBA really tries to loan out minority business loans is by using their Guaranteed Loans program.

The way this program works is that the SBA guarantees to the bank that if the borrower doesn't repay the loan then they will pay it back. Chances are that your bank will most probably favor this kind of arrangement because it is risk-free for them. Since the SBA is not in business to compete with private banks, one must first apply for a loan from a private lending institution and get turned down before the SBA will consider their application for a SBA minority business loan. After being refused, the potential borrower can then ask the banker if he's interested in SBA's loan guarantee program and may even bring up to the banker information about SBA minority business loans, which they may or may not be familiar with. If interested, the bank will deal directly with the SBA.

If the bank is not interested, then a person will have to contact the SBA and apply for a loan directly through them. A great percentage of people apply directly through the SBA and it may at times be an advantage dealing directly with them as they can better explain to you the information that you'll need to know about their SBA minority business loans. In addition to providing SBA minority business loans, the SBA also offers management assistance. The SBA wants the small businesses that are started up to succeed (especially the SBA minority business loans) and offer the services of Service Corps of Retired Executives (SCORE) which are made up of retired business executives who volunteer their services to help small business owners solve problems. To contact the SBA for more information about SBA minority business loans you can call the SBA hotline direct at 1-800-827-5722.