Capital For Minority Business Startup: Start Up Capital

Start Up Capital - Minority Business Owners

By Business Editor

For the minority business owner, there is a plethora of available funding sources, as this article explains ...

Finding funding to have start-up capital for your new business is a difficult thing for anyone. Likely, you'll be searching for options to provide sources of income to get your business off the ground, and that can include personal savings, retirement funds, or even tapping into your credit cards. Sometimes, these options aren't enough to provide the money you need and looking at alternative ways to raise start-up capital becomes necessary.

Friends and family are an excellent source of revenue, if they are in the position to contribute. However, many people simply do not have the money or desire to invest. Thus, it is often necessary to look for outside sources of capital.

Traditional routes of funding have become quite difficult for new entrepreneurs to obtain. Banks and venture capital firms generally prefer to invest in more well-established companies, which carry a lower risk. Angel investors are an available option; however, angels can be difficult to find, and they constitute only a small percentage of the total funding acquired each year.

Fortunately, the minority business owner will find a plethora of available funding sources. The Small Business Administration serves as guarantor for a variety of small business loans. One of their programs is specifically designed for the minority entrepreneur. Various other organizations also offer programs for minorities in addition to their regular loans. Additionally, some grants and loans are offered through religious organizations, alumni groups, and other sources. The amounts of money are often low, but combining several of these sources can provide sufficient capital for startup.

Though great strides have been made, minorities are still underrepresented in the ranks of business ownership. The Service Corp of Retired Executives is an excellent resource for any new entrepreneur. With the ability to choose your counselor, it is possible to choose a mentor who understands the particular challenges that minority entrepreneurs face.

Qualifying for a minority funding program generally requires a person of ethnic minority to hold controlling interest in the company. Therefore, the structure that you choose for your company's organization is critical. If you have partners who are not of ethnic minority, it is important that you retain controlling interest. Your SCORE counselor can help you decide the best structure for your company. It is important that these basic decisions be made before the company is officially formed, as changing the organization's structure can be difficult and time consuming.

Finding startup capital for your new business might be difficult, but there are many possibilities to explore. Look into the requirements of funding programs your business fits with and apply for as many of these sources as possible. Small amounts can add up or be combined with other funding sources for maximum potential. Working with an advisor will also be helpful and can provide you with good strategies applicable both now and to long-term goals.

Next article: Startup Capital Tips - Use The Small Business Administration

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For more information about Business Startup-related resources, see our Business resources section, subscribe to our Business Newsletter containing news, updates and insider tips, or go to more articles about Capital For Minority Business Startup.

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