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NGExpert financial copywriter
Page written by Chris Godfrey. Last reviewed on September 4, 2024. Next review due October 1, 2025.
It’s never easy getting a new venture off the ground or taking an existing business to the next level – lack of cash, limited commercial experience and low customer awareness can hinder even the best idea and preparations. However, if you’re an immigrant entrepreneur, the hurdles to success can be even higher. Being new to the US, immigrants often lack the minimum credit and business histories to get the funds they need to launch or grow a business.
Fortunately, there’s a solution to this problem. Available from non-profits, foundations, organizations and government sources, small business grants for immigrants and minorities can help to get a startup started or expand an existing business. Although qualifying rules can be strict, and the sums available may be smaller than may be found with commercial financing, business grants for immigrants do not need to be repaid and credit scores and other typical loan requirements usually do not apply.
Here’s a selection of the best grants and loans for immigrant business owners to get you on your way:
SBA loans are business loans that are backed by the US Government. Federal support reduces risk for the banks, credit unions and online lenders who offer these loans, which means the funds usually come with lower interest rates and fees than other commercial lending and lenders are often more willing to provide funds to customers with higher risk profiles – which typically includes immigrant and minority business borrowers.
There are many types of SBA loan, but to qualify for any of them, immigrants will need to meet the following criteria:
If you are an LPR, all SBA loan programs may be open to you. If you’re in the process of applying for your Green Card and are not yet an LPR, you may be able to obtain an SBA loan with your valid immigrant visa and customs stamp.
Immigrants who are not US citizens or in the process of applying for their Green Card can get an SBA loan as long as they are legally residing in the US and have a valid ‘appropriate to work’ visa.
All refugees and asylees with LPR status are eligible for SBA loans.
Provided by the US Office of Refugee Resettlement, the Wilson-Fish program is an alternative to traditional state-administered refugee assistance programs. It provides cash and medical assistance to refugees, plus help with employment, case management, English Language Training (ELT) and other social services. Note that the WF program is not available in all states. Check the program overview for further details.
The Micro-Enterprise Development program is designed to assist immigrants in launching or expanding their businesses. The program offers business training and microloans of up to $15,000. It is open to refugees who receive public assistance or subsidies, and/or who lack the financial resources, credit history, or personal assets to qualify for standard business loans. Refugees who are not yet citizens may participate in the program regardless of their date of arrival in the US.
The Program for Investment in Micro-Entrepreneurs (PRIME) is an SBA-backed initiative that provides funds to micro-enterprise lenders such as State/Local/Tribal governments. In turn, these organizations then offer grants and loans to immigrant micro-entrepreneurs to help them start or grow a business. Contact your local government(s) to locate lenders who offer these types of funding.
The Minority Business Development Agency (MBDA) provides a gateway to federal grants and business initiatives that specifically support immigrant and minority entrepreneurs and are part of a total package valued at $500 billion per year. Additionally, MBDA helps organizations run Minority Business Centers across the US, providing services like business advice, help finding contracts, and financial support to immigrant and minority-owned businesses.
The National Association for the Self-Employed (NASE) provides business growth grants of up to $4,000 to members. Since 2006, nearly $1,000,000 has been awarded, with grants used for marketing, advertising, hiring employees, expanding facilities and other specific business needs. All minorities may apply, but you must be a member of NASE to participate. (Membership fees may be applicable).
If you can’t find it here, you may not find it anywhere. Grants.gov is an online goldmine for grants and federal business support initiatives. Provided by the US Office of Management and Budget, the Grants.gov website gives grant seekers access to more than 1,000 grant programs and vets grant applications for federal grant-making agencies.
US Grants is another one-stop portal to find and apply for government grants, stimulus packages and funding opportunities from local, state and federal government agencies. Available small business grants include funding initiatives for organizations that operate in the fields of tech, health, research, sciences, agriculture, the environment, etc.
Business loans may provide an alternative source of funding for your business or new venture. Online lenders will typically be the best option for this type of financing, although you may pay higher interest rates and fees than you would with traditional banks. Credit checks are standard with most commercial financing, but depending on the type of loan you choose, you may not need to provide collateral:
You receive a single, lump-sum cash injection and then pay it back in regular instalments over a fixed period of up to 25 years. Collateral may be required.
A business line of credit is a business loan that functions like a high-value credit card. Borrowers can withdraw as much as they want when they want from a loan facility up to the limit of their borrowing. You only pay interest on the sums you withdraw, not the whole credit line. This can significantly reduce your borrowing costs. Collateral may be required.
Also known as account receivables financing. Borrow against the value of your unpaid invoices. The lender will usually provide up to 95% of the invoice value within a few days or even hours of the bill being raised. Your invoices act as security for the loan, no added collateral required.
Equipment loans use the asset you’re financing as security – no added collateral is required. You use the equipment as you pay for it and the lender maintains a lien on the machinery. Once you pay the loan back, the lender releases the lien, and you own the equipment outright.
Merchant cash advances are designed for businesses that accept customer payments by credit and debit card. You borrow against the value of your card sales. As your card sales increase, your borrowing limit goes up. Pay the loan back with a fixed percentage of your card sales on a daily, weekly or monthly basis. Your sales act as security for the loan, no added collateral is required.
Revenue-based financing functions like a merchant cash advance but with higher borrowing limits. Based on the size and regularity of their total revenues, (not just their credit card sales), businesses may receive a lump sum and pay it back over a short-term schedule, typically by small deductions from their daily sales. This type of loan can usually be secured quickly as qualification rules are less intensive and credit scores are not so critical. No added collateral is required.
Nonprofit and community-based lenders can provide SBA Microloans to business owners who may struggle to secure standard business financing. Available up to $50,000, SBA microloans also come with more relaxed qualifying rules and can usually be secured with FICO scores as low as 500, or even with no credit score at all. Be aware that these type of business loans often require a personal guarantee that makes you personally responsible for the debt.
Some government initiatives – see details above – specifically target immigrants and refugees to help them build a business and become more self-sufficient. Money is usually provided as a grant or a microloan.
Free money means getting a small business grant. Although the US federal government does not provide grants direct to start-ups, they do give $millions every year to state and local governments for this very purpose. This means your best chance of getting free cash to launch a business is by checking-in with your state and local government business development departments.
There are thousands of grants available across the US and some of them are solely provided with the goal of supporting new business and job creation. See the details above to start your funding search.
Every grant will have its own unique qualification rules. Check the criteria for each program to make sure you meet the plan’s requirements before submitting your application.
Working with business finance experts can make all the difference when applying for grant funding. Contact Swoop to discuss your borrowing needs, get help with your application and compare top quality small business grants and business loans from a choice of providers. Give your business the chance it deserves. Register with Swoop today.
Written by
Chris is a freelance copywriter and content creator. He has been active in the marketing, advertising, and publishing industries for more than twenty-five years. Writing for Wells Fargo Bank, Visa, Experian, Ebay, Flywire, insurers and pension funds, his words have appeared online and in print to inform, entertain and explain the complex world of US consumer and business finance.
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