Those with disabilities run businesses every day. While there are not a lot of business funding resources available specifically for those with disabilities, some loans work better for them than others. Typically, you would have to wade through everything that’s out there to find the best business loans for disabled people. That could take forever. We try to narrow it down a little.
Where to Start to Find the Best Business Loans for Disabled People
Of course, there are some highly variable factors at play. Whether you are disabled or not, your credit score will make a difference when looking for business loans. Other factors will come into play as well, such as length of time in business and annual revenue. For traditional lenders, credit is still king. The best business loans for disable people with a high credit score (650 or over) include the following.
Best Business Loans for Disabled People: USDA Business Loans
These are loans from the United States Department of Agriculture. They don’t provide loans directly. Rather, they guarantee loans from lenders and provide funds to agencies that act as intermediaries. Since a large share of disabled Americans are in rural communities, the USDA’s focus on these areas is a bonus.
The most popular of the USDA’s many business loan programs is the Business and Industry Guarantee Program. The USDA helps guarantee loans made to businesses in rural areas through this program. By USDA definition, a rural area has fewer than 50,000 residents. Therefore, if your business is located in an area that fits this definition, you could qualify. However, you will also need good credit, adequate business revenue, and potentially some collateral.
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Best Business Loans for Disabled People: SBA 7(a) Loans
Another option for disabled people with good credit is an SBA loan. Like the USDA, the SBA does not issue loans directly. They guarantee loans made through specific lenders. The 7(a) loan program is the SBA’s most popular. It offers up to $5 million in funding and repayment terms that go up to 25 years.
Entrepreneurs can use these funds to buy commercial real estate, expand a business that is already in operation, start a new business, buy equipment, and more. Not everyone will qualify however. In addition to a credit score of 650 or above, businesses operating for at least two years and already producing revenue are more likely to get approval. Collateral is also a likely requirement. The process takes several weeks.
Best Business Loans for Disabled People: SBA Microloans
The really cool thing about these loans is that you can qualify with credit that is between 550 and 650. They offer up to $50,000 in funding, so they are a great option for micro or home-based businesses. They can be used for hiring, launching a new location, and even remodeling your office. Accion, one of the partner lenders, will work with scores as low as 575. They focus more on the expected income during the loan term than current financial position.
Best Business Loans for Disabled People: SBA Community Advantage Loans
The goal of these loans is to get funds to business owners in underserved groups. This, of course, includes disabled people. They go up to $250,000, so large investments work well with these funds. The application process works the same as with other small business loans in that you need to find an SBA partner lender. Use this tool to find a lender.
Business Loans for Disabled People: Non-Traditional Lender Options
The SBA works with traditional lenders to help get loan funds in the hands of those that may not be able to qualify under traditional requirements. While the government guarantee helps, sometimes it still isn’t enough. If you find this is the case with your, business consider applying for loans from non-traditional lenders.
With OnDeck, applying for financing is quick and easy. Apply online, and you will receive your decision once application processing is complete. Loan funds will go straight to your bank account. The minimum loan amount is $5,000. The maximum is $500,000.
You must have a personal credit score of 600 or more. Also, the business has to be in operation for at least one year. There is an annual minimum revenue requirement of $100,000 as well. In addition, there can be no bankruptcy on file in the past 2 years and no unresolved liens or judgements.
StreetShares began as a service to veterans. These days, they offer term loans, lines of credit, and contract financing. They also offer small business loan investment options. The maximum loan amount is $250,000. Pre Approval only takes a few minutes. They use a soft pull on your credit so it doesn’t affect your score.
To be eligible, you have to be in business for at least 12 months with annual revenue of $25,000. Exceptions are possible however. For example, with loans to companies in business for at least 6 months that have higher earnings, they make decisions on a case by case basis. The borrower’s credit score must be at least 620. For more on StreetShares, see our in-depth review.
Kabbage is an online lender. They offer a small business line of credit that can help businesses meet their goals quickly. The minimum loan amount is $500, and they do not exceed $250,000. You must be in business for at least one year and have $50,000 or more in annual revenue, or $4,200 or more in monthly revenue, over the last 3 months.
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Kabbage is great if you need cash quickly. Also, their non-traditional approach puts less weight on your credit score, so they may work better for some borrowers than other lenders.
Business Loans for Disabled People: Business Credit Cards
Business loans for disabled people are not easy to get. If your personal credit is totally shot and you are having trouble getting enough funding through business loans, business credit cards can help. Of course, you’re thinking if your credit isn’t good enough to get loans, how are you going to get credit cards?
First, credit cards are easier to get regardless. Those with poor credit scores can still get cards, they just have higher rates and lower limits. However, if you build credit for your business, known as business credit, you can get great business cards and fund your business quite successfully without bringing your personal credit into the picture at all.
Why Should Disabled Business Owners Build Business Credit?
Not just disabled business owners, but all business owners should build credit for their business that is separate from their own. Here’s why. If you have strong business credit you can get business credit cards with favorable terms and nice rewards regardless of what your personal credit looks like. Also, if your business runs into problems, your personal credit will be protected and you will still be able to do things like buy a car or a house.
Business Loans for Disabled People: How to Build Business Credit to Apply for Business Credit Cards
The first thing you have to do is ensure accounts in your business name report to your business credit report and not your personal credit report. Do this by setting up your business as a fundable entity apart from yourself. Start by making sure your business has its own phone number and address that is not the same as yours. Be sure to get these listed in the business 411-directories.
Then, you need to get an EIN. You can do that at the IRS website for free. You’ll use it to apply for credit in place of your SSN. After that you have to incorporate. You can do so as a corporation, S-corp, or LLC. Do some research to determine which option will work best for your budget and liability protection needs, but you have to choose one.
There are just a few more things you need to do to make sure your business stands on its own credit wise:
- Get a D-U-N-S number
- Open a separate business bank account
- Put up a professionally designed and hosted business website. Make sure you have a business email address with the same URL as the website as well.
Business Loans for Disabled People: Build Business Credit
You cannot just apply for business credit cards in your business name right away. First, you have to establish tradelines with starter vendors. These are vendors in the vendor credit tier that will issue invoices with Net 30 or longer terms. While you may need to make a few initial purchases with these vendors to establish yourself as a customer before they will extend these terms, there is no personal credit check. They do sometimes want to see a certain amount of time in business however.
As you pay the invoices consistently and on-time, these vendors will report your payments to the credit reporting agencies, thus establishing your business credit profile. Some of the most common and easiest to start with are Uline, Quill, and Grainger.
Why Start Here?
These are the easiest to start with simply because they sell products that most any business can use on a daily basis. Items such as paper, toner, pens, pencils, packing supplies, and even janitorial supplies. After you order from them a few times, apply for net 30 terms, pay on time, and watch your business credit score start to build like a snowball rolling downhill.
Once you have 8 to 10 tradelines reporting your on-time payments to the credit agencies, you can start to apply to creditors in the other credit tiers.
- Retail Credit Tier– Credit attached to specific stores such as Amazon, Home Depot, and Best Buy.
- Fleet Credit Tier– Companies that offer credit for fuel purchases as well as automobile repair and maintenance.
- Cash Credit– These are the large, well-known credit companies such as Visa, MasterCard, and American Express.
As you can see, it all starts with building trade lines through the vendor credit tier. Then a whole credit world opens up to you!
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Business Loans for Disabled People: Assistive Technology Business Loans
If you have a disability that makes it necessary for you to use assistive technology to run your business, you could benefit from one of these loans. An example of this would be if you need an automobile that is wheel-chair accessible to make deliveries. Another example would be braille-compatible software, or a hands-free device to make business calls.
Most often these types of loans come from local lenders, and requirements for eligibility vary. The National Disability Institute offers assistive technology loans in New Jersey and New York that range up to $30,000. It is important to note that your credit can affect your ability to get these loans, but if you can show you have sufficient income to pay it back that will help a lot.
Business Loans for Disabled People: Disabilities Don’t Have to Stop You from Funding Your Business
Over the course of a lifetime, a disability can affect a person in a number of ways. You can feel like you are not able to do the same things others can. While this may be true in some cases, often having a disability doesn’t make a difference in what you can do. The difference that has to be made is how you do it. The vision impaired can read, just with their fingers instead of their eyes. The hearing impaired can talk, either with their hands or their mouths. Similarly, those with disabilities can fund a business, they just may have to go about it differently. There are resources for disabled business owners out there, but you have to know where to look.
While it can seem that your disabilities stop you from many things in life, they do not have to stop you from owning and running and successful business. There aren’t a ton of business loans for disabled people exclusively, but there are plenty of options that work well for all types of business owners. Take the time to do the research you need to and figure out what’s out there, what you qualify for, and what you actually need. In the meantime, start building your business credit so you can access business funding at any time. You’ll be glad you did.
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