Rieva Lesonsky is president and CEO of two companies focusing on small business and entrepreneurship—GrowBiz Media and SmallBusinessCurrents.com. She’s a nationally-known speaker, best-selling author, award-winning journalist, and authority on entrepreneurship who has covered the industry for more than 40 years.
Alternative lending resources for Hispanic-Latino business owners
July 23, 2024 | 5 minute read
Written by
Rieva Lesonsky
President and CEO
GrowBiz Media
Hispanic-Latino-owned businesses make up a significant portion of the small business landscape. As of 2023, there are nearly 5 million Hispanic-Latino-owned businesses in America, with 463,000 of them being employer firms generating $664 billion in annual revenues and employing 3.5 million workers across the country.1
As Hispanic-Latino-owned businesses continue to grow, access to capital remains imperative. The Stanford Latino Entrepreneurship Initiative (SLEI) conducts an annual national survey of Hispanic-Latino businesses and found that, like other small businesses, Hispanic-Latino-owned companies face challenges that can impede business growth such as limited access to financing and vulnerabilities in cash liquidity.2
To meet these challenges, business owners may opt to leverage traditional lenders, which have a wide range of financial products and services available. These are commonly known as traditional bank business loans and used to be the only option for small businesses. However, with the rise of alternative lending, there are certainly other options for small business owners to consider. The key is knowing where to look. To get started, check out Bank of America’s Access to Capital Directory for Hispanic-Latino entrepreneurs, created in collaboration with Seneca Women, to learn about sources of funding, including equity, debt and grant capital, with a special focus on Community Development Financial Institutions (CDFIs).
CDFIs
CDFIs are private financial institutions that promote responsible, affordable lending to help small businesses in underserved communities. Bank of America is the largest private investor in CDFIs in the United States, with more than $2 billion in loans and investments in over 250 CDFIs in all 50 U.S. states and the District of Columbia.
Many CDFIs target Hispanic-Latino business owners. Here are several examples.
DreamSpring
DreamSpring is a nonprofit that “increases access to credit, makes loans, and provides a community of support to help entrepreneurs realize their dreams.” It provides one-on-one financial education, workshops, networking, mentorship, and other special opportunities.
DreamSpring offers a variety of loan products, including a small business loan.
Accion Opportunity Fund
Formerly known as Opportunity Fund, Accion Opportunity Fund is a nonprofit which helps advance racial, gender and economic justice for all. They work closely with small business owners to provide them with fairly priced loans, educational resources, coaching and support networks in English and Spanish.
CDC Small Business Finance
Founded in 1978, CDC Small Business Finance is committed to making an impact for small businesses of all sizes with affordable and responsible loans. Its investment strategy focuses on providing businesses with the capital they need to grow at a pace that aligns with that company’s strategy. In addition to supporting the businesses they lend to, CDC’s goal is to drive meaningful and measurable outcomes in the communities in which they operate.
The CDC currently operates in Arizona; Atlanta, Georgia; California; Dallas-Fort Worth, Texas; Detroit, Michigan; Miami, Florida; Nevada; Washington, and D.C. Metro Area. CDC also offers free business advice.
Access to Capital for Entrepreneurs, Inc. (ACE)
As Georgia’s largest small business-focused community development loan fund, ACE is commitment to providing affordable loans to underserved small and medium businesses.
ACE serves a wide variety of enterprises with a focus on women, minorities, and those in low-income communities whose businesses would not be as successful without assistance. Their small business resources include the Women’s Business Center (WBC), which provides a full range of services for women entrepreneurs at all stages of planning, implementation, and growth. The WBC provides free and low-cost consulting services and training programs in English and Spanish. The WBC’s target populations are African American and Hispanic-Latino women.
Latino Economic Development Corporation (LEDC)
The Latino Economic Development Corporation (LEDC) is a Certified Community Development Financial Institution (CDFI) providing alternative financing to help build and grow local businesses in Mayagüez, Puerto Rico, and the Washington D.C. and Baltimore metropolitan areas.
It offers three loan types depending on the loan amount required and how long the company has been in business. Startups in business for less than a year are eligible.
Grant resources
Grants are another source of funding Hispanic-Latino small business owners can consider. Here are a few resources to get you started:
- Candid.org connects people who want to change the world to the resources they need to do it. Candid's data tools on nonprofits, foundations, and grants are the most comprehensive in the world.
- Grants.gov is the centralized location for grant seekers to find and apply for federal funding opportunities. You can narrow your search by funding type, industry category and more.
- NASE is the National Association for the Self-Employed. The NASE offers Growth Grants of up to $4,000 to its members.
- United States Hispanic Chamber of Commerce (USHCC) offers grant programs working with corporate partners.
Bank of America’s resources on alternative lending and partnerships with CDFIs are intended to promote social and economic progress for individuals and communities who may not qualify for traditional loan products. Each lending source has different criteria, so carefully compare the offerings to find the one best suited for your small business.
Important Disclosures and Information
Bank of America engages with Rieva Lesonsky to provide materials for informational purposes only, and is not responsible for, and does not guarantee or endorse any of the third-party products or services mentioned. All third-party logos and company names mentioned herein are the property of their respective owners and are used under license from Rieva Lesonsky.
Bank of America, Merrill, their affiliates and advisors do not provide legal, tax or accounting advice. Consult your own legal and/or tax advisors before making any financial decisions. Any informational materials provided are for your discussion or review purposes only. The content on the Center for Business Empowerment (including, without limitations, third party and any Bank of America content) is provided “as is” and carries no express or implied warranties, or promise or guaranty of success. Bank of America does not warrant or guarantee the accuracy, reliability, completeness, usefulness, non-infringement of intellectual property rights, or quality of any content, regardless of who originates that content, and disclaims the same to the extent allowable by law. All third party trademarks, service marks, trade names and logos referenced in this material are the property of their respective owners. Bank of America does not deliver and is not responsible for the products, services or performance of any third party.
Not all materials on the Center for Business Empowerment will be available in Spanish.
Certain links may direct you away from Bank of America to unaffiliated sites. Bank of America has not been involved in the preparation of the content supplied at unaffiliated sites and does not guarantee or assume any responsibility for their content. When you visit these sites, you are agreeing to all of their terms of use, including their privacy and security policies.
Credit cards, credit lines and loans are subject to credit approval and creditworthiness. Some restrictions may apply.
Merrill Lynch, Pierce, Fenner & Smith Incorporated (also referred to as “MLPF&S" or “Merrill") makes available certain investment products sponsored, managed, distributed or provided by companies that are affiliates of Bank of America Corporation (“BofA Corp."). MLPF&S is a registered broker-dealer, registered investment adviser, Member SIPC, and a wholly owned subsidiary of BofA Corp.
Banking products are provided by Bank of America, N.A., and affiliated banks, Members FDIC, and wholly owned subsidiaries of BofA Corp.
“Bank of America” and “BofA Securities” are the marketing names used by the Global Banking and Global Markets division of Bank of America Corporation. Lending, derivatives, other commercial banking activities, and trading in certain financial instruments are performed globally by banking affiliates of Bank of America Corporation, including Bank of America, N.A., Member FDIC. Trading in securities and financial instruments, and strategic advisory, and other investment banking activities, are performed globally by investment banking affiliates of Bank of America Corporation (“Investment Banking Affiliates”), including, in the United States, BofA Securities, Inc., which is a registered broker-dealer and Member of SIPC, and, in other jurisdictions, by locally registered entities. BofA Securities, Inc. is a registered futures commission merchant with the CFTC and a member of the NFA.
Investment products: