Immigrant entrepreneurs have become a growing and essential part of the American business landscape and economy, but achieving that success can still be an uphill battle for many immigrant business owners. Whether you’re an immigrant entrepreneur who’s working hard to grow your business, or you’re working with a new American business owner, you’ll find low-cost resources to help support and navigate your entrepreneurial challenges in this guide.
What challenges are immigrant entrepreneurs facing?
There are many reasons why small business owners have trouble gaining access to funding. However, as an immigrant entrepreneur, you face a whole set of unique challenges, including:
- Potential discrimination: Unfortunately, discrimination continues to be an issue in society, and some lenders may have formed biases against you as an immigrant entrepreneur. There are laws intended to protect you from it and resources, like the Immigrant Legal Resource Center, that can help.
- Limited history: Many immigrant entrepreneurs are in the early stages of establishing themselves and their business. You may not have an established credit history or enough assets to use as collateral. These are significant factors lenders consider when determining loan approvals. However, there are still many great loans available to you.
- Unfamiliarity with the United States: Many countries have very different financial systems, regulations, and languages than the U.S. As an immigrant entrepreneur, you’ll need to navigate entirely new rules and regulations in a foreign language. The loan application process is complicated enough as it is, imagine how much harder it would be if you aren’t fluent in English or have English as your second language.
How immigrant entrepreneurs are making an impact
For hundreds of years, immigrant entrepreneurs have come to the U.S. with ideas that fuel America’s economy and, often, change the world. In fact, 44.8% of businesses listed on the Fortune 500® in 2023 are the result of the hard work and creativity of new, first-and second-generation Americans.
Vision, dedication and strong work ethics continue to be hallmarks of many successful immigrant entrepreneurs, whether you operate retail stores or start businesses in technology, manufacturing, design, food or fashion. These inherent traits are also generating impressive numbers. In 2022, more than $7 trillion in revenue was generated by Fortune 500 businesses founded by immigrants or children of immigrants.
While immigrant-owned businesses have clearly created a lasting impact, securing funding for your business can still be a challenge. Even though these are unique challenges you face, you don’t have to go through it alone. There are more community resources available to you than ever before, and you’ll find out how you can increase your chances of getting funding.
How can you get small business loans as an immigrant entrepreneur?
If you are among the New Americans who want to launch or grow a business of your own, here are the steps you can take to help you get the financing you need.
1. Build your credit history
A lender will always check your credit history before deciding to approve a loan. The first step to building yours is by opening your own bank account. This way, you can establish a relationship with a bank. From there, you can ask your bank to open a credit card to build your credit history by paying your bills on time. Depending on the bank, you may still not qualify for a credit card right away. If that happens, you can open a secured credit card instead. In addition, there are organizations that can help you with these steps, including the Mission Asset Fund and Grameen America.
2. Research lenders
You should spend some time researching and meeting with potential lenders. This includes traditional lenders like banks, as well as alternative lenders like Community Development Financial Institutions (CDFIs). Look into their loan requirements to see whether they could be an option for your immigrant-owned business. There are also many lenders out there who specialize in helping small business owners, including immigrant entrepreneurs, access funding.
3. Prepare to apply
Once you find a suitable lender, a strong loan application is essential. After researching and speaking with potential lenders, you’ll know the information you’ll need to gather to apply for funding. This can vary based on the lender and your individual business, but you’ll usually need your personal identification, business registration documents, tax returns, and bank statements. You’ll also want to create a business plan. This will show potential lenders that you understand your business, markets, and competition.
With these steps completed, you’ll be ready to apply.
What resources are available to immigrant entrepreneurs?
There are lots of resources available to help immigrant entrepreneurs, like yourself, achieve their business dreams.
Funding resources
For many small business owners, securing loans from traditional lenders, such as banks, is a challenge. For immigrant businesses, the challenges tend to be even higher.
Immigrant startups may use personal savings and loans from family members and communities for initial funding. However, once businesses grow and need bank funding, immigrant businesses may not meet common criteria that banks set for small businesses to qualify for loans.
Luckily, there are many reputable alternative lenders that work with immigrant entrepreneurs to gain access to funding with fair terms. Here are some helpful resources:
- Pursuit has a range of free and low cost business advisory services available throughout New Jersey, New York, Pennsylvania, Connecticut, Illinois, Nevada, and Washington. By working with their network of consultants, you can prepare to apply for loans, get financial management training, find support for your marketing strategy and more. These services are available in Spanish, French and English, as well as staff who often speak languages other than english.
- New York City’s Department of Small Business Services launched a new Immigrant Business Initiative specifically to meet the needs of immigrant entrepreneurs. Through this initiative, you’ll find business courses, pro bono legal help, and access to low-cost loans, with support available in at least eight languages.
- Accompany Capital is another New York City-based resource for immigrant entrepreneurs. This organization can work with you to start and grow your business, as well as increase your personal wealth through homeownership and other avenues.
- In Buffalo, Westminster Economic Development Initiative (WEDI) provides business and personal resources for New Americans, with services available in many of the 60+ languages spoken in the area.
- Small Business Development Centers (SBDCs) across the country work with immigrant entrepreneurs to create business plans, build business networks, organize financial information and prepare for the loan process.
Don’t be discouraged if you’ve spoken to your bank and heard ‘no.’ There are many other excellent responsible lenders who can help.
Legal resources
For many immigrants entrepreneurs, the number of local, state and federal legal and licensing laws and regulations is both a surprise and a barrier, and compliance can present significant hurdles. In addition to the previously mentioned resources, you can work with the following organizations to navigate the legal and regulatory landscape:
- The Legal Aid Society offers transactional legal services by providing expert guidance on areas such as legal structure selection for small businesses and a comprehensive range of supplementary services.
- Legal Services NYC offers pro bono legal services by using more than 2,000 volunteers from nearly 100 law firms and corporations. These volunteers collectively impact over 7,000 low-income people and donate more than 70,000 hours annually.
- New York State’s Office for New Americans, offers workshops, mentoring and counseling throughout New York State on a variety of topics, from English-language classes to financing opportunities for immigrant entrepreneurs.
- In Western New York, Neighborhood Legal Services and the Volunteer Lawyers Project can assist or direct you to resourcesfor startup and growth issues.
- In New York City, the Neighborhood Entrepreneur Law Project provides legal guidance for immigrant entrepreneurs.
- ActionNYC provides additional legal guidance and resources for low-income immigrants in New York’s five boroughs.
Resources for accessing new markets
Coming to a country as large as the U.S. offers the potential to reach more customers, but doing so comes with challenges. Fortunately, the following community-based business resources can help:
- Start Small Think Big offers free small business support by providing essential resources, expert guidance, and services tailored to your immediate business needs. Explore how their marketing program empowers business owners, including immigrant entrepreneurs, to generate leads, cultivate connections, and effectively communicate with their customers and supporters to drive sales.
- SBDCs can also guide you to a wealth of industry-related resources to gain a foothold in manufacturing, technology and many other industries.
- Empire State Development’s Minority- and Women-Owned Business Certification has given hundreds of immigrant small business owners access to competitive and potentially lucrative New York State government contracts.
- Immigrant Business is dedicated to providing information on opportunities and challenges facing immigrant entrepreneurs. This online publication covers success stories, tips to grow your business, and the latest news on immigration in the U.S.
Resources for franchise opportunities
Many immigrant business owners buy franchises to start their businesses. This approach offers several advantages, like built-in product development, branding, marketing and guidance on legal, insurance and human resource compliance.
Franchises offer ready-to-go business opportunities, and some of them reduce some of the risks associated with starting a business. The following resources can help you find franchise opportunities in a range of purchase prices and industries:
- Entrepreneur’s 2024 Franchise 500 list offers an overview of franchise opportunities and startup costs.
- Franchising.com shares advice and resources that can help you start or expand your franchise in a range of industries.
- Franchisegator.com is an online resource that shares available franchise opportunities, as well as articles and resources for new and experienced franchisees.
Pursuit is here to support small business success
Pursuit has experienced business advisors and lending experts throughout New York, New Jersey, Pennsylvania, Connecticut, Illinois, Nevada, and Washington who can help immigrant entrepreneurs with financing needs.
Contact us today to find out more about how we can work together.
