High-tech, women- and minority-owned firms struggle to come across funding

Entrepreneurs have enough trouble as it is getting the funds they need to get their enterprises off the ground, however, recent research from the U.S. Small Business Administration (SBA) Office of Advocacy revealed coming across startup capital is increasingly difficult for new high-tech businesses, as well as non-technology firms created by African Americans, Latinos and women.

Why is tech banking more difficult?
Innovations in technology are seemingly popping up every day, while other inventions are in development. The author of the report, Alicia Robb, senior research fellow at Kauffman Foundation, found banks are less willing to dole out funding based upon the knowledge possessed by high-tech businesses, compared to those that can put up collateral. Patents, copyrights and trademarks accumulated by high-tech firms don't really interest banks and are less likely to help such enterprises acquire lending approval.

"We know that startup businesses with access to financing drive innovation, job creation, and economic growth," said Dr. Winslow Sargeant, chief counsel for the SBA Office of Advocacy. "Policies that help close the financing gaps for minorities and women and for high-tech startups will benefit the whole economy."

How can high-tech, minority- and women-owned firms attract lenders?
There are many opportunities made available by the SBA for minorities and women business owners to apply for loans, but these entrepreneurs also need to get better at luring potential lenders to pour funds into their their firm. Below are a few tips to help all small-business owners learn how to make lending to their enterprise an opportunity banks, investors and capital managers can't pass up:

  • Develop a strong brand identity: Small-business owners who are able to set their firm apart from others will be considered first by potential lenders.
  • Create a stellar business plan: When evaluating a company to see if it is worthy of receiving a loan, one of the first things that is considered is the firm's business plan. By doing enough research and putting time and effort into the plan, small-business owners will find it easier to attract lenders.
  • Don't be afraid to network: Word-of-mouth marketing is something companies rely on for more than just product or service promotion, and by meeting new people and getting the word out about the brand, small-business owners will see most interest accumulate.

Content presented by Bridge Bank, offering flexible, customized solutions for entrepreneurs.

Getting Started

Find your ideal banker:

Select any filter and click on Apply to see results

Featured Insights

Debt can be a useful tool in building a business, as long as you don’t spread yourself too thin trying to repay the...

New York City has a thriving startup...

2015 was an interesting year for the...

What is it about one startup that...

Two hot topics California businesses will be thinking about as 2016 gets going are a minimum wage increase and a...

Small Business Administration (SBA) loans can be a great resource for businesses that are struggling to obtain...

Startup valuations can sometimes...

Recent News

02/09/16
Los Angeles – February 9, 2016 - Bridge Bank announced today that it has provided...
02/04/16
PHOENIX (Feb. 4, 2016) – Forbes’ assessment of the 100 largest U.S. banks weighed...
01/29/16
San Diego, CA – January 28, 2016 – Bridge Bank’s Life Sciences Group (LSG) today...
11/20/15
MINNETONKA, Minn., November 17, 2015 - Zyga Technology, Inc., a medical device...
10/29/15
Reston, VA – October 29, 2015 – Bridge Bank today announced the recent hiring of...
Heatspring Magazine, Gabrielle Rossetti
10/28/15
Heatspring Magazine, October 19, 2015 - Christopher Lord, Managing Director of...
10/21/15
Atlanta – October 21, 2015 – Bridge Bank today announced the recent hiring of two...
09/23/15
Robert Lake Joins Bridge Bank to Lead Life Sciences Growth Initiative SAN JOSE, CA...
09/14/15
The dollar gave back last week's gains vs. the Euro and then some as the focus...
09/09/15
Leading Technology Lender Focuses New Practice on Services for Venture Capital and...

Twitter

Featured Insights

Featured Insight

Debt can be a useful tool in building a business, as long as you don’t spread yourself too thin trying to repay the...

Featured Insight

Two hot topics California businesses will be thinking about as 2016 gets going are a minimum wage increase and a...

Featured Insight

Small Business Administration (SBA) loans can be a great resource for businesses that are struggling to obtain...

Recent News

New York City has a thriving startup...

2015 was an interesting year for the...

Twitter