It is a fact that immigrants are significantly more likely to start their business compared to people born in the States. The reason behind this is that they face a lot of difficulties to get a proper job in the U.S. because of the tight competition. However, it is not an easy task to build a business from scratch.
One of the most common problems while starting a business is the lack of funds. Also, getting working capital from traditional lenders can often turn out to be more difficult for immigrants.
Fortunately, there are a few other types of business financing options for business financing for immigrants. From government grants to SBA loans, check out the different ways how you can start your business in the United States –
Top Funding Options for Immigrant –
1. Government Grants
There are many government grants for immigrants to start a business. Two of the best of them are the Wilson-Fish program and Micro-enterprise Development Program. Both of them are administered by the Office of Refugee Resettlement, offering the best possible financial assistance to refugees. In case you are a refugee, consider these business grants.
However, for those who are not refugees can also get money from the government. All you have to do is regularly visit the page Grants.gov and find out the grants that are suitable for your business. Once you find the grants, compare them and select the ones that fulfill your needs. Also, make sure that you follow the right steps while searching for the most profitable grant.
Or else, you can also visit the official website of state secretary of your area. Search on the internet for the address of state development agencies or economic development agency offices. While visiting, ask them for any state program or grants for immigrants to start a business or expand it.
2. Charitable Foundation Programs
Immigrants can also visit the website of the Foundation Center and find a list of corporations and charitable foundation programs. You may find several grants that are relevant to your business plan and requirements.
Make sure to utilize the extensive database of the Foundation center fully. Find the best grants for immigrants to start a business. You can also search for more information about the various business grants on the resources part and collect the necessary information regarding how to apply for them.
3. SBA Loans
Small Business Administration (SBA) loans are among the best, as well as the most affordable small business loan options for immigrants. However, before applying for them, just remember that there are downsides. To be specific, immigrants have to complete a large amount of paperwork to get business loan products that are backed by the SBA. Also, even though the SBA supports immigrants to start a business, various eligibility rules need to be followed.
So, those people who have legal permanent resident status or those who are working visa holders are eligible for an SBA loan. Still, make sure to understand all the mentioned eligibility criteria to avoid any type of delays in the application process.
4. Friends and Family
It is perhaps one of the most common practices to pool resources and resources from friends and family members. In case you are comfortable with it, ask your friends and family members to help you start your business. Often, with the financial support of family and friends, any immigrant’s business can easily take off and become profitable in no-time.
5. Business Credit Cards
Business credit cards can help immigrants as a short-term financing option if used wisely. These cards can play a major role in offering an upthrust for your business startup and perfectly running it. Reviewing your credit report before applying for a credit card can help you get it without much hassle. Just make sure that to have a solid credit score.
Also, it is essential to use your credit card wisely by avoiding piling up debt, especially when the card’s interest rate is high. Look for a card that offers an introductory period without interest so that you get enough time to earn the funds you need for making the payments at the right time.
Successful crowdfunding campaigns can be a big help for immigrants to start a business. Often, it is more significant than you might have anticipated for your business.
One of the best examples is of Hiral Sanghavi, an immigrant from India, who raised $11.5 million with two crowdfunding campaigns – one on Kickstarter and one on Indiegogo. There are many other crowdfunding platforms where you can raise money for your innovative business ideas. However, remember that you may not necessarily win as much as Sanghavi.
7. Microloans or Short-Term Business Loans
Even if you have a stellar financial background, the lack of credit history for an immigrant can create a lot of problems in setting up a business. It can be hard for an immigrant to obtain traditional loans. But, short-term loans or microloans can be an ideal measure to avoid all these hassles. Also, because of the fact that these loans are less risky for the lender, they have less strict application requirements.
The disadvantage of getting any microloan is that the loan amount generally exceeds $50,000. Also, these loans have a relatively high payment as you have to pay them back in a short period, which can cause cash flow problems for your business.
Unfortunately, because of the cultural bias along with the practical realities, it sometimes can be hard to get grants for immigrants to start a business. Also, remember that you have to do a lot more paperwork than other applicants in the U.S.
Exploring and understanding the options mentioned above can help you start your business. And make sure to opt for the most convenient option as you are the only one who is familiar with your business plan and the required working capital. Good luck!
PS: For Muslim, please avoid interest rate, it’s RIBA!!