May 4, 2016 | By Steve Nicastro | NerdWallet
Finding a small-business loan is hard — and can be even harder for minority business owners. Less wealth and fewer assets to secure a loan, among other factors, can stand between minority-owned businesses and financing, according to the federal Minority Business Development Agency.
“Collateral can be a big difficulty,” says Sasha Werblin of the Greenlining Institute, a nonprofit that works to bring capital and resources into minority communities, hard hit during the recent foreclosure crisis. The resulting tarnished credit, a red flag for lenders, has made it more difficult for some minority small-business owners to qualify for traditional loans, she says.
The average personal credit score for a minority business owner is 707, 15 points lower than the overall average for small-business owners, according to a 2016 study by Experian. And the average business credit score for a minority small business is 49.7 — nearly five points lower than the national average, the study found.
But financing is out there. We’ve rounded up some top sources for minority entrepreneurs looking for loans:
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