Many minorities start their businesses with a lot of hopes and dreams but are faced with a problematic growth scenario. In such a competitive and unequal market, you may need extra help for growth – like a loan.

However, these loans are not that easy to obtain and they require time, research, and preparation. Even so, all the effort can be rewarded at the end of the process, with an amount that can change the life of your business.

Check out these 5 tips to help you find a loan for your small business. The fourth tip is one of the most important, don’t forget to check it out!

1: Focus on angel investors

With the growth of the number of startups and small businesses, some entrepreneurs have focused their investments in places apart from the traditional ones. Angel investors are becoming more and more common. 

These investors tend to put capital into small companies that have high long-term growth potential. In exchange for the loan, they usually ask for equity in the company.

By being part of the board, the angel investor may help in the decision-making process within the company – and it’s up to you to decide whether this is good or bad.

So this is the first type of investor you might find for your small business. Now is the time to evaluate the pros and cons.

2: Know your region

Here is a fact: the number of loans available will vary by region. Depending on the location, one business niche will be more favored than another. In Canada, for example, the manufacturing sector tends to be favored.

Is this a death sentence for your business? No, but it may mean that a greater effort will be required to get the loan. If you are starting this entrepreneur life, we have some directions on how to become an entrepreneur!

One great tip is to learn more about where the company is located in order to understand what investors in the region really want to invest in. This can serve you as a shortcut when defining the services of your business.

3: Check the opportunities in other countries

Often, we need to change our mindset and think outside our bubble. That may mean relocating your company from one place to another – or at least getting investors from elsewhere.

Today, the Canadian government also facilitates this bridge between foreign investors and small Canadian businesses that want to expand – you can read more about this on Invest in Canada.

It is true: attracting a foreign investor may not be the simplest task, but it is a great possibility for sectors considered attractive by the industry. So look for more information about opportunities that go outside your comfort zone.

4: Find some venture capitals

Venture capitals are loans that target high-risk start-ups, but also have great growth potential, and this is the case with small companies.

The good news is that many venture capitals are focused on specific minorities, for example; women, ethnic people, and immigrants. In this case, it is easier to find an investor that is perfect for your business.

In exchange for the loan, venture capitalists ask for a small portion of the company’s shares, with the intention of selling them in the future when their value increases.

5: Have your business ready

Last but not least, have the house ready. As you would before you receive a visitor, you tidy up your whole house and prepare some tasty food.

So how do you apply this metaphor to business? Understand that the investor is like a visitor who will analyze your house and figure out if it is worth staying for dinner (in this case, investing a large amount of money into the company).

For the investor to want to stay, it is necessary to have the house ready – that is, a business plan, organized sectors, and, mainly, high growth possibilities in the medium and long term.

So get your house in order, and while you are finalizing the details, start looking for the right investor for your scenario.