10 Loans and Grants for Hispanic-Owned Small Businesses

Hispanic-owned businesses are growing more rapidly than others, with Latina-owned being the fastest growing portion of women-owned businesses. Latinx entrepreneurs have been responsible for approximately 50% of net new small business growth over the past decade, according to data from the Stanford Latino Entrepreneurship Initiative (SLEI).

For this pace to continue, Hispanic and Latinx entrepreneurs need easier access to capital and resources. While funding from corporate banks has traditionally been difficult for Hispanic business owners to access, some new models and institutions are opening their doors for new funding opportunities.

What qualifies as a Hispanic-owned small business?

A Hispanic-owned small business is a small business that is a for-profit enterprise owned and controlled by one or more Hispanic persons.

The U.S Census Bureau defines Hispanic or Latino as “a person of Cuban, Mexican, Puerto Rican, South or Central American, or other Spanish culture or origin regardless of race.”

What is a minority business loan?

A minority business loan is a type of loan or business funding that is offered exclusively to minority-owned businesses. Most federal programs will use the term “socially disadvantaged” when referring to minority businesses, which can include Black Americans, Hispanic Americans, Native Americans (Alaska Natives, Native Hawaiians, or enrolled members of a Federally or State recognized Indian Tribe), Asian Pacific Americans, Subcontinent Asian Americans, and members of other groups designated from time to time by SBA.

Small business loan options include short-term and long-term loans, as well as credit cards, a line of credit, and microloans.

5 Hispanic small business loans

Many traditional bank loans are still largely inaccessible to Hispanic business owners in underserved communities, but there is an increasing number of lenders who want to support this rapidly-growing segment of the nation’s economy. Research shows that Community Development Financial Institutions (CDFIs) have historically been key in providing funds to underserved groups. Here are several loans open to Hispanic and minority entrepreneurs to start off your search.

1. The Latino Economic Development Center

The Latino Economic Development Center (LEDC) is a certified Community Development Financial Institution that helps build and grow local businesses in Puerto Rico as well as the Washington, D.C. and Baltimore metropolitan areas. The LEDC offers three types of loans:

• LEDC Growth Loan: Up to $250k for established small businesses that have been operational for at least two years and are seeking capital to grow or expand operations.
• LEDC Startup Loan: Up to $20k for startups that have been operational for less than two years and are seeking capital to launch or consolidate their venture.
• LEDC Seed Loan: Up to $5k for startups that have been in operation for less than a year or that have plans to launch a company within three months of receiving funds.

2. Camino Financial

Twin brothers Sean Salas and Kenny Salas were twelve years old when their mother lost her chain of Mexican restaurants due to lack of capital and resources. They founded Camino Financial with the mission of helping overlooked entrepreneurs fund their dreams. The organization offers three kinds of loans to small businesses that have difficulty finding funding elsewhere:

• Startup loans: To fund side gigs that need capital to reach the next level.
• Microloans: Designed to finance underserved entrepreneurs and immigrant business owners. This program accepts applicants with no credit history.
• Small business loans: For owners who’ve been in operation for at least nine months, generate $30,000 in sales, and are looking to expand.

3. U.S. Small Business Administration (SBA)

The SBA is a federal government agency that extends financing to small businesses through a network of approved lenders who meet certain guidelines. While there are no SBA loan programs specifically for Hispanic entrepreneurs, there are a number of SBA loans and programs that cater to this segment. Some of these include:

• 7(a) Loans: This is SBA’s most common loan program, which includes help for businesses in special circumstances. The maximum loan amount is $5 million.
• 504 loans: This is a long-term, fixed-rate loan of up to $5 million to help finance major fixed assets that promote business growth and job creation.
• Microloans: These are smaller loans of up to $50,000. They’re provided through SBA intermediaries to small businesses and not-for-profit childcare centers for startup and expansion costs.
• Community Advantage loan program: The SBA launched this pilot program to assist small businesses in underserved markets. The maximum loan size is $350,000 and the program’s current scheduled end date is September 30, 2024.

4. CDC Small Business Finance

CDC Small Business Finance is a nonprofit organization that has delivered over $165,000 in financing to minorities, women (including Hispanic women) and veterans. There is no collateral required for loans from CDC Small Business Finance. What’s more, they offer the flexibility to waive some requirements for businesses in low-to-moderate income communities, start-up businesses, and businesses that are veteran owned. The two main types of loans on offer from CDC Small Business Finance are:

• Small business loans: These are regular business loans from $20,000-$350,000 that are designed specifically for entrepreneurs and have fixed and variable rates available to meet business needs.
• Credit-blind financing for entrepreneurs of color: While currently only for Black-owned (including Afro-Latino) businesses in Metro Detroit, this pilot program offers loans of up to $100,000 and is looking to expand in the future.

5. Accion Opportunity Fund

Accion Opportunity Fund (AOF) is also a nonprofit lender, created to support women entrepreneurs and minority-owned businesses. AOF offers loan amounts between $5,000 and $100,000. Because no two businesses and business owners are alike, our loan terms are flexible and personalized to suit the needs of your growing business. Our small business loans include:

• Southern Opportunity and Resilience (SOAR) Fund: For small businesses across the south and southeast who were in business prior to September 2019 and experienced economic hardship as a result of the COVID-19 pandemic.
• Small Business Progress Loan: Loan amounts of $5k to $100k, in partnership with American Express. The terms are flexible and once the loan is approved, you will receive ongoing updates with new business insights, expert advice, and notifications of upcoming events.

Once you apply, we’ll share several offers you can choose from with different term lengths, monthly repayment options, and interest rates. If we don’t have any available options for you, we’ll try and refer you to one of our partners or provide other resources.

5 Hispanic small business grants

While loans are a fantastic way to get your business funded, it may be more suitable for your business to apply for grant programs instead. This is especially true if you’re in the early years of your startup or facing challenging times and don’t have the stable, reliable cash flow you need to pay back the loan. Here are some grant opportunities for Hispanic and Latinx business owners to check out.

1. Comcast RISE

Comcast RISE is working to support small businesses, especially women-owned and minority-led businesses, that have been economically impacted by the pandemic. In 2021, Comcast announced it would give $11 million in additional grants to 1,100 businesses. In addition to monetary grants, recipients could also win consultations with Comcast’s local Effectv marketing and research teams, media campaign support, the production of a 30-second TV commercial, or a technology makeover. To qualify for grants, businesses must be:

• At least 51% owned and operated by a woman or someone who identifies as a person of color, including Black, Indigenous, Asian American, and Hispanic business owners.
• Independently owned and operated.
• Registered in the U.S.
• In operation for more than a year.
• Located within the Comcast business or Effectv service area footprint.

The deadline for the next small business grant is October 16, 2022.

2. The Entrepreneurial Spirit Fund by SIA Scotch

SIA Scotch was launched in 2012 on Kickstarter.com by Carin Luna-Ostaseski, one of the first Hispanic entrepreneurs in history to create a scotch whiskey brand. In keeping with the brand’s vision to inspire others to achieve the unexpected and provide small business owners of color, including Hispanic small business owners, with capital, mentorship, and community, SIA Scotch has pledged $110,000 to support entrepreneurs of color in the food and beverage industry. Eleven grants of $10,000 each will be awarded to select for-profit businesses that are majority owned by a person of color.

3. Amber Grant

The Amber Grant was created in 1998 with the goal of empowering female business owners. While it’s not specifically aimed toward applicants of Hispanic descent, it’s a great opportunity for Latina business owners looking for high-dollar grants to help them achieve their goals. The fund currently awards over $30,000 each month to various winners. In addition to a $10,000 monthly grant, there are two $25,000 annual grants available, as well as $10,000 industry-specific grants for businesses in skilled trades, health and fitness, food and beverage, sustainability, animal services, creative arts, and more. There are also several $2,000 mini-grants available throughout the year.

4. National Association for the Self-Employed (NASE)

While not exclusive to Hispanic entrepreneurs, the National Association for the Self-Employed offers business development grants of up to $4,000 to its members. The NASE Growth Grant has awarded nearly $1,000,000 in funding so far to small businesses, and the money can be used for marketing, advertising, hiring employees, expanding facilities, or any other specific business needs.

5. USDA Rural Business Grants

Hispanic businesses and business owners who live in rural areas can check grants from the U.S. Department of Agriculture. The grant money “must be used for projects that benefit rural areas or towns outside the urbanized periphery of any city with a population of 50,000 or more.” To be eligible, a small business must have fewer than 50 new workers and less than $1 million in gross revenue.

Am I eligible for a Hispanic small business loan?

The eligibility criteria for each individual loan program will depend on the institution and the lender, but increasingly, Community Development Financial Institutions and other non-profit lenders are relaxing their terms when it comes to lending to Hispanic and other minority entrepreneurs in order to give them access to much-needed capital.

Latino communities, including Latino entrepreneurs, are among the most unbanked and underbanked groups in the U.S., according to the FDIC. Many Latino business owners say they distrust banks or lack the minimum balance to keep an account open.

If you find yourself in this position, search for loan programs that look beyond the credit score to determine your full financial and entrepreneurial potential. Generally speaking, however, most lenders will ask prospective borrowers for the following information:

• Purpose of loan
• Key details about the business, such as how long it’s been trading for
• Key financial figures, such as turnover, profit, and cash flow
• Business and bank account summaries
• Credit history
• A detailed business plan

Other valuable funding resources for Hispanic small businesses

In addition to the loans and grants listed above, here are a few more resources where you can find funding for your business.

1. Grants.gov

With a mobile app, a grants learning center, and a constantly-updated list of government grants from 26 federal agencies, Grants.gov is the one-stop shop for finding both grants to apply for and resources to help you along your journey. The website enables you to apply for grants through its own portal, allowing you to track applications and stay on top of deadlines easily.

2. U.S. Hispanic Chamber of Commerce

The United States Hispanic Chamber of Commerce (USHCC) promotes the economic growth, development, and interests of more than 4.7 million Hispanic- and Latino-owned businesses in the US. The USHCC has a network of more than 250 local chambers and associations nationwide and partners with more than 260 American corporations. Contacting your local chamber can be helpful when applying for a business loan, since many of the chapters work with lenders and banks to administer loan programs for Hispanic entrepreneurs.

3. Minority Business Development Agency (MBDA)

The Minority Business Development Agency or MBDA boasts many grant funding programs that are designed to help keep minority businesses afloat. In 2012, the agency said they’d supported the creation of 5,787 new jobs by assisting minority-owned businesses in obtaining nearly $4 billion in contracts and capital in a single year. The agency maintains a list of open grant competitions on its website.

4. AOF Business Resource Library

Also check out Accion Opportunity Fund’s Business Resource Library, where you can find both general and specific resources for Hispanic small businesses in both English and Spanish, including information on how to apply for small business loans, the various financing options available to Hispanic businesses, and best practices for accessing capital.

5. Fast break for small business

LegalZoom has teamed up with the NBA, WNBA, and NBA G League to support small business owners. Fast Break for Small Business is a $6 million commitment in small business grants and LegalZoom services to help thousands of small businesses across the country. Accion Opportunity Fund is proud to serve as the nonprofit administrator of the program.

Applications for Fast Break for Small Business are open from February 15th to September 13th, 2024. Visit our Fast Break page to learn more and apply.

Explore funding options with AOF

Access to capital is not exclusively dependent on traditional banks and corporate institutions that rely heavily on credit history to make financial decisions. As outlined in this article, there are a number of small business loans and grants that are eager to support your business and help in your company’s growth and success.

At AOF, we work exclusively with small business owners, many of whom have been denied traditional forms of capital, to ensure they have the funding they need to start, sustain, and grow their businesses. A majority (80%) of our clients are diverse, and our fast, flexible model of lending ensures that minority small business owners get the funding they need, when they need it. Explore our available small business loan options and apply here.