SBA Loans for Women and Black-Owned Businesses

You've built your business and are ready to take the next step—expanding and innovating to reach new growth potential. But growth often requires resources, and securing the right financing can be a hurdle.

This is especially true for Black and women-owned businesses, who—despite being a driving force in the economy—often face unique challenges when accessing capital.

Why SBA loans are a strategic choice for business growth

Despite employing millions of workers and adding trillions in revenue to the economy, these groups have been historically underfunded and face barriers to traditional financing. However, resources exist to help level the playing field. US Small Business Administration, or SBA, loans present one path for securing funding—offering strategic advantages and tailored support for businesses ready to expand and grow.

Unlike conventional loans, SBA loans often come with lower down payments—freeing up capital for expanding operations, purchasing real estate, refinancing debt or investing in new equipment. They also offer extended repayment terms, easing the burden on cash flow so you can focus on growth. Whether you're looking to acquire another business, invest in commercial real estate, upgrade equipment or bolster your working capital, SBA term loans can be tailored to your financing needs and goals.

Accessibility is another key feature. Black and women-owned businesses can particularly benefit from this because access to funding has historically been challenging for these business owners. SBA loans are backed by the federal government, reducing a lender's risk and making loans more available for those who may not easily qualify for traditional financing.

Data from the Homeownership Council of America shows that minority-owned businesses face greater financial challenges with credit availability and cash flow than their white counterparts. About 40% of businesses owned by these underrepresented groups apply for financing yet receive significantly less funding—even those with a low credit risk.

Partnering with the right lender

SBA loans offer a variety of terms and structures that can be tailored to your specific business needs. An experienced SBA-preferred lender can be your strategic ally, helping you to navigate the complexities of the application process and maximize your chances of approval.

Look for a lender who understands your industry and target market. They can offer tailored insights and solutions that address your unique challenges and opportunities.

The right lending partner can offer a wide range of assistance.

• Expert guidance: Experienced SBA lenders can demystify the loan process, helping you understand eligibility requirements and necessary documentation.
• Increased approval odds: Lenders offer advice on presenting your business in the best light and can anticipate potential application roadblocks.
• Tailored solutions: Your lender will work with you to structure a loan that aligns with your growth goals.
• Ongoing personalized support: A banking partner provides not only funding but also a wealth of resources and advice to help your business thrive.

Partnering with the right lender is another way to invest in your business's future. Together, you can navigate the SBA loan process and secure the funding you need to achieve your growth objectives.

Building a winning loan package

Creating a strong SBA loan application showcases your business's strengths and potential to lenders. Your loan package should tell a compelling story about your business, highlighting your knowledge, competitive advantages and growth plan.

Here's what to include.

Loan application

Be prepared to provide details about your business, the loan's purpose, how the funds will be used and contact information for key individuals in the company. The SBA and most lenders require you to submit SBA Form 1919, which collects business owners' information, backgrounds and experience.

You may also need to provide a personal financial statement. This statement is a snapshot of your financial situation, including income, assets, debts and liabilities. It helps lenders assess your ability to repay the loan. This statement is also required for each personal guarantor.

Personal tax returns

You'll likely need to show 3 years of personal tax returns to demonstrate financial stability and income. Providing W-2s can help calculate cash flow, if applicable. Tax returns are also required for each personal guarantor on the loan.

A strong business plan

This is your opportunity to tell the story of your business and make your application stand out to lenders.

Here's what it should include:

• Executive summary: An overview of your business, mission and goals
• Business summary: A detailed description of your company, its history, current operations and recent performance
• Market analysis: Your understanding of the target market, including competitors, opportunities and challenges
• Implementation strategy: Your plan for achieving your business objectives, including marketing, sales and operations strategies
• Management team: Profiles and resumes of key members of your management team, including their experience and qualifications
• Financial statements: Historical financial documents like your income statement, balance sheet and cash flow statement, as well as projections for the next few years

Preparing a comprehensive loan package can help streamline the lending process and accelerate your access to capital, enabling you to secure the funding you need.

Additional resources to explore

Securing funding is just one step in supporting your business's growth and expansion. In addition to SBA loans, various resources provide guidance and assistance to Black and women-owned businesses.

• Small Business Development Corporation: Offers free business consulting and low-cost training to new and existing businesses
• SCORE: Provides free mentoring and counseling to entrepreneurs
• Operation Hope: Offers financial literacy education and counseling
• SBA Website for Women-Owned Businesses: Provides resources and information for female entrepreneurs
• National Black Chamber of Commerce: Provides advocacy, networking and resources to Black-owned businesses

Your partner in growth

Our SBA specialists are dedicated to providing personalized guidance and support throughout the loan process. We'll work closely with you to understand your specific needs and goals, help you navigate the complexities of SBA loans and develop a tailored financial solution that fuels your business growth.

We're also committed to expanding access to capital for Black-and women-owned businesses through our Special Purpose Credit Program, which is designed to address these businesses' unique funding challenges. This program offers flexible financing options and tailored resources to help you overcome barriers and achieve your business goals.