Small Business Advice: Finding Start Up Financing For A Woman Or Minority

An overview of ways to find start up financing for a woman or minority including a brief resource list.

Finding start up financing can be a challenge, but if you are a woman or a minority, there are organizations created specifically to aid you in your endeavor. However, in order that your financing attempt is as successful as possible, before you begin the financial search, you should be able to answer the following questions:

1) What is the purpose/mission of your business?

2) What qualifies you to start and run this business?

3) Have you had training in this field?

4) Do you know your target audience?

5) Who is your competition and what do you have that they don't?

6) How will you price your products and/or services?

7) How long will it take you to break even?

These questions should all be easily answerable if you've done your homework. That homework would be in the form of a Business Plan. A business plan is a formalized version of your business idea. It operates for your business, the same way a resume represents your achievements to date, and the only difference is that your business plan is a forecast of your company's accomplishments. Said plan details your ideas, goals, market research, the amount of funds needed, and an estimated time frame of repayment of any loans obtained.

The purpose of a business plan is to help accurately define the goals and purpose of the business and how they are going to be accomplished. This plan helps to foolproof your business by planning for unforeseen circumstances. It is also a necessity when applying for a loan from a bank, investor or lender. A consultation with experts in the same field is recommended before submitting.

The following is a list of financing options:

Personal Savings:

Use of personal savings is an option that offers little or no risk. It encourages the idea of careful spending. It also shows the business in a good light if/when additional financing is needed.

Credit Cards:

A personal credit card is another viable method of financing. It is a good way to keep track of business expenses. To avoid accounting complications, it is recommended that the card used be designated solely for business purposes.

Family and/or Friends:

Another untapped resource is family and/or friends. Make a formal presentation utilizing the above-mentioned business plan. Discuss repayment terms and be prepared to put it in writing. Depending upon the formation of the business, the loan could be deemed as stock purchased.


A grant is money designated by an individual or organization to finance an endeavor. A grant need not be repaid. However, your endeavor needs to fit the stipulations of the grantor, one of which includes the business being a non-profit organization. The best way to find a fit is to visit a university or large reference library where you can obtain access to a directory of foundations. With this tool, you can research the mission, their interest, and grant application guidelines.

Micro Loans

A micro loan is a loan of anywhere from $500 to $25,000. Your business might qualify for a micro-loan. Micro loan programs offer up to $25,000 to small businesses with little or no capital. Repayment terms run the gamut of three months to three years. Check the economic development department for your city for the latest information.

Before contemplating a loan, it is important to ensure that your financial history is in order. To do so, obtain a copy of your credit report. If the report shows any late payments within a three-month period, it is recommended that you wait until you have at least a six-month period with no late payments listed.

The above information is just a brief synopsis of financing options available for businesses owned by women or minorities. For in-depth details, the following list is a suggested starting point for further research in your funding endeavors:

- Your local reference library for foundation directory information.

- Small Business Administration (SBA), an independent agency of the United States government established by Congress in 1953. Its function is to assist small businesses to obtain financing and learn proper business management. Consult your phone book for local listing. They may also be found online.

- Service Corps Of Retired Executives (SCORE) is a nonprofit association that supplies FREE, confidential business advice/mentorship to entrepreneurs nationwide. The association offers workshops at little or no cost via chapter offices. Counselors consist of current and/or retired entrepreneurs and executives who volunteer their services via phone, email or face-to-face. SCORE works closely with the SBA. They may be found online.

- Count Me In

Count Me In for Women's Economic Independence is a fairly new entity that makes small business loans and provides scholarships for training to women. They may be found online.

- Digital Women- Women with Their Modems Running

Specifically geared towards women in business or women about to start a business. They may be found online.

- Diversity 2000

This website sports a free database of Minority and Women Business Enterprises (M/WBE's) and contact information for Fortune 1000 companies. Upon formation of your company, registration as a supplier is free of charge. They may be found online.

- Minority Business Development Agency (MBDA)

A part of the U.S. Commerce department, this Federal agency is specifically geared to assist in the formation; development and expansion of U.S. based minority-owned businesses. They assist with business plans on an individual basis, marketing as well as financial planning. They can be found online.

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