Most business owners in the country face different challenges daily. However, being among the nation’s 4.1 million minority business owners, these challenges come with extra hurdles. According to a Minority Business Development Agency (MBDA) report, most minority entrepreneurs rely on short-term debts to finance their businesses.
Today’s economy makes it hard to receive loans as borrowing costs skyrockets in the long run. That’s in addition to other challenges such as discrimination and lack of social capital, among others. Albeit, the ray of hope shines brightly as fintech lenders such as Camino Financial offer lots of financial resources, including loan quotes and access to business consultations.
Challenges Minority Business Owners Face
Some challenges you may face as a minority business owner include;
Access to Capital
Capital plays a major part in ensuring the success of a business, and this aspect is one of the various challenges minority entrepreneurs tend to face. A study by MBDA shows that minority businesses are less likely to access loans than their non-minority counterparts. Also, it has been shown that the loan value for minority business owners is lower than that for non-minority entrepreneurs.
With the great difficulty in accessing these funds, the success of the business tilts toward an unfavorable aspect. As such, the MBDA advises these business owners to show their positive net worth and audited financial statements when applying for loans. The future increase of the U.S economy is largely dependent on these minority firms, which will tend to the majority in the long run. Leading fintech institutions prioritize the importance of this by creating opportunities for these minority business owners to access capital easily.
Access to Skill Development
Over time, it has been discovered that business owners with high education experiences tend to yield higher sales and profit compared to those with little education. A historical gap exists between minorities and non-minorities as far as skill development is concerned. The lower educational level has, no doubt, led to entrepreneurship barriers.
Aside from the typical classroom education, minorities also face a barrier in relevant skills and experiences needed to boost entrepreneurship strategies. Minority business owners are also less likely to use technological advancement, unlike in the case of non-minority owners.
Lack of Social Capital
Another challenge faced by minorities in the business world is the absence of social capital. The ability to access a strong network of mentors, advisors, colleagues, peers, and other business owners is essential for minority entrepreneurs to grow their businesses.
However, there are resources designed by organizations such as the Asian American chamber, the U.S Black Chamber, and the Hispanic Chamber of Commerce. These networking chapters offer resources for these business owners to harness the social capital of other minorities to improve their businesses.
Support and Opportunities for Non-minority Business Entrepreneurs
While there are so many challenges minority business owners face, there are some resources that organizations design for their support. They include;
- The U.S Small Business Administration (SBA) offers funding opportunities for minority entrepreneurs to guide them at each development stage of their business.
- The Native Business Development Institute gives grants to improve economic growth among the Alaskan and Native American entrepreneurs.
- The Minority Business Development Agency grants reward that average $300,000 for renewable project grants.
- The U.S Department of Health and Human Services gives grants to businesses that aim to improve health issues among disenfranchised populations.
There are lots of strategies you could implement to boost your business as a minority entrepreneur. One of the opportunities is to partner with Camino Financial to access capital and financial consultation.
By signing up, you get to manage your business solutions and loans conveniently from your mobile-friendly member account. In association with this leading fintech lending institution, you get to remove the barrier to your business success.