Wednesday, November 29, 2006

Unique Business Loans for Minorities

SBA-like business loans to minority businesses when the bank cannot.

That sums up the Certified Minority Lenders program created by the National Minority Supplier Development Council and the Business Consortium Fund (BCF).

BCF is funded primarily through investments and contributions made by NMSDC corporate members and other organizations including companies who wish to support minority businesses in the United States including Walmart, General Electric, Sears, Boeing and Coca Cola. The targets for these loans are businesses controlled by U.S. citizens who are Asian, Black, Hispanic or Native American who are conducting business with a member of the National Minority Supplier Development Council which is practically any household name in corporate America.

Minority businesses that qualify may have weak cash flow, negative equity, a history of losses and little to no secondary source of repayment. Even with these challenges, a prospective borrower must still have solid management and sales experience in their field. The specific financial requirements will vary from account to account based upon the underwriting criterion of the lender – you had better have a good story and a complete application.

If your business qualifies, you can apply for business loan programs ranging in amount from $100 thousand to $1 million at rates that currently don’t exceed 12%. The loan can be structured as a short term or long term borrowing and proceeds can be used for working capital, contract financing, equipment purchases and other business purposes.

Generally, the borrower must pledge sufficient assets, to the extent they are reasonably available, to secure the business loan. Personal guaranties are required from all principal owners of the business. Liens on personal assets of the principals also may be required.

Sound interesting? If I can help you with an introduction to a lender who can lend nationwide, please give me a call!

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