Small Business Loans for Immigrant Business Owners

Written by Banks Editorial Team
4 min. read
Written by Banks Editorial Team
4 min. read

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Moving to a different country requires a lot of ambition and the qualities of a successful business owner. It’s no wonder that immigrants own over 20% of U.S. businesses despite accounting for less than 15% of America’s population. Every business relies on money to grow and continue operating. A small business loan can provide extra resources that keep your business afloat or help you expand. We will discuss some loans you can use to finance your business.

Small Business Loans

Starting a Business as an Immigrant in the U.S.

Starting a business in the United States is challenging enough already. Only 25% of companies stay open for over 15 years. Immigrants also have to jump over several hurdles to get into the country, establish a new residence and become part of their communities. Starting a business can help you become known in the community and hire people who need jobs. A company is an incredibly fulfilling venture, and a loan can help you get started or act as a layer of defense.

Can Immigrant Business Owners Get a Business Loan in The U.S.?

Most immigrant business owners in the United States can qualify for a loan. Every immigrant who is now a U.S. citizen can apply for a loan. Green card holders can also get financing for their businesses. Lenders can find additional ways to qualify you if you do not have a green card and are not yet a U.S. citizen. The SBA details some ways you could be eligible for a business loan if you do not have a green card.

Funding Options for Immigrant Business Owners

Immigrant business owners can obtain funding through several types of loans. You can review loans that match your needs and compare their terms. A loan is a popular path to financing, but it’s not your only option. Immigrant business owners can use these programs and grants to get additional funds.

Wilson/Fish Alternative Program for Refugees

The U.S. Department of Health and Human Services provides financing for immigrant-owned businesses. You won’t have to pay back the proceeds. However, you must have a letter of asylum or proof of immigration to get funds from the department.

Microenterprise Development Program or Refugees

This program primarily helps immigrants start businesses, but some funds also go to immigrants with existing companies. The U.S. Department of Health and Human Services provides this financing. Immigrants in the program also receive business training that can help them manage their money and reach new customers. In addition, the program offers grants and micro loans up to $15,000.

Rural Business Development Grant

Immigrants in rural parts of the United States can qualify for this grant. The U.S. Department of Agriculture and Rural Development gives these grants to small businesses with 50 or fewer employees and under $1 million in revenue. This grant can help with commercial real estate, capital, and other assets. You don’t have to be a farmer to qualify for this grant. 

Minority Business Development Agency

This federal agency secures billions of dollars to minority-owned businesses each year. Each state has MBDA centers you can contact for additional details on how you can qualify.

State Minority Business Grants

Some states run minority business grant programs separate from the Minority Business Development Agency. Grants.gov lists available grants, and you can filter the results to display minority business grants in your state.

Small Business Loans

Community Development Financial Institutions (CDFIs)

The CDFI provides financial support to business owners in distressed communities. CDFI lenders aim to reach people that traditional financing doesn’t adequately reach. You can access the CDFI’s database to find local financial institutions that are a part of this program.

Other Types of Available Business Loans

Immigrant business owners have many choices for a loan. You can explore these choices to get financing for your company. 

SBA Loans

The Small Business Administration partners with lenders to provide business owners with financing. These loans have attractive rates and terms, but they’re harder to obtain. Most lenders offering SBA 7(a) loans will want you to have a 640 credit score or higher.

Term Loans

Business term loans help companies address long-term expenses and goals. You will receive a lump sum upfront and pay it back over monthly installments. Most of these loans have 12-36 terms, but some term loans are longer. A shorter loan term results in lower interest payments and helps you become debt-free sooner. Longer loan terms cost less per month, but you’ll be in debt longer and pay more interest in the long term. Businesses tight on cash flow often pick longer terms to protect their profits. 

Term loans can provide adequate financing to expand your company. You can use the money on initiatives that will pay themselves back in the future. Biz2credit gives term loans ranging from $25,000 to $500,000. You can receive a loan from Biz2Credit within 72 hours. You may have to wait over a month to obtain financing from a traditional bank. A Biz2Credit term loan quickly gives you the funds to grow or maintain your business. You can submit a loan request on their website and receive approval in as little as 24 hours.

Business Lines of Credit

Business lines of credit provide your business with a revolving funding source. A business owner and lender agree on a credit limit and interest rate for unpaid debt. You only pay interest on a line of credit when you borrow against it. Some business owners accumulate lines of credit and never borrow against them until it becomes necessary. As a result, business owners have more time to assess how much funds they need and when to access the line of credit. 

After paying off your line of credit, you can continue using it. You won’t have to approach a lender each time you want to borrow against your business lines of credit. However, business lines of credit have higher interest rates than conventional loans.

Equipment Loans

Some businesses invest in equipment and use financing to acquire assets. Equipment loans use the equipment as collateral, resulting in lower interest rates. Lenders assess the equipment’s condition when assigning term lengths. For example, a piece of equipment that may last three years usually gets financing for a 3-year loan term. When providing loan amounts and interest rates, lenders will consider the equipment and your credit score.

Working Capital Loans

Businesses use working capital loans to cover operating expenses and grow their businesses. This financial product covers short-term costs. Biz2credit offers working capital loans between $25,000 and $2 million. You can receive an approval within 24 hours and funds as fast as 72 hours after getting approved. Biz2credit does not conduct a hard inquiry on your credit. Working capital loans typically come with higher interest rates but do not require collateral. 

Merchant Cash Advances

Lenders provide you with funds and use a percentage of your company’s credit card transactions for repayment. Loan repayments happen automatically, and you can receive the funds quickly. Merchant cash advances, some with higher interest rates, and the lender may impose restrictions on your company. Business owners can’t incentivize customers to use cash via discounts and other perks.

Business Credit Cards

A business credit card can help you cover short-term expenses. You can tap into your revolving line of credit and pay it back on your schedule. Business cards work well for short-term costs that you can quickly repay. Credit cards have double-digit interest rates, making it best to avoid accumulating unpaid debt. 

Biz2Credit

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