It’s a scenario that we have seen time and again. A small business or nonprofit is struggling to pay off debts, expand operations or cover payroll. Rather than apply for a business loan, they may take on credit card debt, turn to family and friends for funds, or simply opt to close their doors.
Many Latino business owners have a distrust in traditional financial institutions. A recent study from the Stanford Latino Entrepreneurship Initiative showed that the number of Latino-owned businesses in the U.S. has increased by 44% in the last decade. That’s $470 billion contributed to the U.S. economy in 2020 alone. But Forbes has reported that, despite those increases, the funding rate for Latino-owned businesses has actually decreased, and that Latino business owners receive loans that are, on average, $35,000 lower than those received by businesses not owned by Latino folks.
But there are reliable and non-predatory loan programs out there, and they are especially beneficial for business owners of color, who have historically encountered roadblocks when attempting to secure working capital.
It’s why I’m so enthusiastic about the Connecticut Small Business Boost Fund as a resource for our state’s businesses. This program, which is supported by the Department of Economic and Community Development, is connecting businesses with flexible, low-interest loans and financial support services. So far, 59% of the loans offered by the fund have gone to minority- and women-owned businesses.
As a Latino business owner, it gives me hope for the future. I am the founder and creative director of Peralta Design, a marketing and branding agency in Shelton, Conn. We often work with other small businesses who are similarly recovering from the pandemic, and who are up against inflation, staffing shortages and other obstacles.
The Connecticut Small Business Boost Fund could be the answer for those owners looking to grow, evolve or simply contend with the everyday challenges of running a small business or nonprofit. The fund has already provided over $27 million in loans to more than 200 small businesses and nonprofits around the state, and more than $120 million in loans is still available. If your business has fewer than 100 employees and brings in less than $8 million in annual revenue, you may be eligible to receive a loan from $5,000 up to $500,000, and the interest rates are fixed at 4.5%.
Through the program, potential borrowers have the option of working with a business advisor before, during and after the application process. If approved, that support lasts throughout the lifetime of the 5- or 6-year loan. These free support services might involve developing a business plan, creating financial projections or forging connections to other local business resources.
And if an applicant doesn’t receive a loan at first, those technical assistance providers will work with the applicant so they’re better prepared to take on a loan the second time they apply.
I would encourage more Connecticut businesses, particularly those owned by people of color, to consider applying a loan through the Connecticut Small Business Boost Fund. It’s not just another loan program: Its experienced community lenders will work with you to ensure that you apply for and secure the loan that makes the most sense for you and your business. They’re invested in the brightest possible future for all Connecticut small businesses.
Publisher’s Notes: CT Latino News is a partner of the CT Small Business Boost Fund in supporting the state’s Hispanic and Latino communities.