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Endeavoring to foster both the establishment of and the growth of minority-owned businesses in America, a federal agency was created under the U.S. Department of Commerce – The Minority Business Development Agency (MBDA).
What does the MBDA do?
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It aims at helping minority and female business owners obtain financing
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It does not directly provide funds
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It coordinates resources for those who are eligible
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It provides contact information on banks and other funding sources
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It provides female and minority members one-on-one help in developing suitable small-business-loan applications, business plans, financial plans, and marketing
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It guides them through the process of closing a business loan
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It functions as a business referral service
Are there any differences in programs for Women and programs for Minorities?
The women’s program is comprised of only non-profit intermediaries.
The minority program uses both non-profit and for-profit intermediaries.
What basic criteria do women and minorities need to meet?
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The business must be at least 51% owned, operated and managed by minorities or women
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The business must have average annual sales of under $5 million for the past three years
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The business must have fewer than 100 employees, including affiliates
What other basic information do women and minorities need to know?
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The loan term for working capital loans cannot exceed 7 years, except when a longer term may be needed to ensure repayment – and then it can only be up to 10 years
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Fixed asset loans for assets other than real estate are limited to the life of these assets, not to exceed 25 years
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Loan interest rates are negotiated between the business and the lender, but are subject to the maximum guidelines established by the SBA.
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The SBA charges its partner lenders a guaranty and servicing fee for each approved loan
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These fees are often passed on to the business owner
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An annualized servicing fee is also charged (0.5%) and applied to the outstanding balance of the SBA guaranteed portion of the loan
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Under certain circumstances the SBA will guaranty up to 80% of loans less than $100,000, or up to 75% of loans between $100,000 and $750,000
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Loan applications are submitted to the SBA
How can I get more information and help on these programs?
If you think one of the Programs for Women or Minorities can enhance your Cash Flow, or if you feel there are other ways one of these programs would benefit your business, e-mail us at
CashFlow@NowFinancing.com.
A more detailed explanation of Business Programs for Minorities or Women is provided in the book,
The Entrepreneur’s Guide to Prosperity -- Financing Your Small
Business, by Morris Bocian. |
