CEO at Novae, a black-owned fintech serving consumers and small businesses nationwide, emphasizes the importance of access to financial resources for underserved communities. The founder of a financial technology company providing business lending services highlights various funding sources available to entrepreneurs and small business owners, especially relevant in the current economic climate.
Small Business Administration loans have seen significant expansion under the Biden-Harris administration, with recent changes including authorizing new lenders in rural and low-income areas, relaxing credit requirements, and eliminating equity injection requirements for loans over $500,000. These changes have resulted in record gains for small-business loans provided to veterans, people of color, and women entrepreneurs in 2023, a positive step towards greater financial inclusion.
Government contracts present a valuable funding opportunity for small businesses, with almost 25% of contract money allocated to small business owners. While some may feel intimidated by the application process, resources like the SBA’s Empower to Grow program provide assistance to businesses looking to secure government contracts, particularly those in underserved areas.
Alternative financing options such as online loans, merchant cash advances, and crowdfunding have become more accessible to newer and smaller businesses in recent years. While these options can provide quick access to capital, business owners are advised to exercise caution due to potential high interest rates, short payback terms, and other associated risks. Entrepreneurs should carefully review and compare loan terms before deciding on the best financing option for their business.
Staying informed about changes and developments in the financial landscape is crucial for entrepreneurs and small business owners looking to position themselves for growth and success. With a greater variety of funding options available than ever before, businesses have the opportunity to make strategic decisions about their financial future. Seeking guidance from licensed professionals regarding specific financial situations is recommended.
Overall, the message is clear: access to financial resources is essential for the success of businesses, especially those in underserved communities. By taking advantage of various funding sources, including SBA loans, government contracts, and alternative financing options, entrepreneurs and small business owners can navigate the ever-changing financial landscape with confidence and strategic planning. It is crucial for businesses to carefully evaluate loan terms and seek professional advice to make informed decisions about their financial needs.
