También puedes leer este artículo en español, La Clave del Crecimiento es Entender el Valor del Crédito y las Relaciones.

Three thousand dollars. That is what my family and I started our business Mercado El Valle with almost a decade ago. We were hoping for $10,000 but that was all that I could get approved for at that time with my meager income as a college student. We signed a lease and bought as much inventory as one could with three thousand dollars.

I had a flashback to those days as I read a recent report by McKinsey titled The Economic State of Latinos in America, the American dream differed. That report cited that Latinos more than any other ethnic group rely on credit cards and family savings to start businesses and are less likely to apply for funding because they don’t think they will receive approval. That was my family. And unfortunately, that is still the case for the thousands of Latino-owned businesses across Arkansas.

Although Latinos start more businesses per capita in the United States than any other racial or ethnic group, they face serious challenges in growing and scaling their businesses. The main challenges I have seen as a banker in our community are understanding credit, cash flow, and collateral.

There is a huge opportunity to further unleash the entrepreneurial spirit of Latino business owners across Arkansas, but we as Latino entrepreneurs must do better at being “borrower ready.”

In May my family and I were able to scale our once 700-square-foot store into a 5,000-square-foot store we always dreamed of. 

If you are a small business owner here are three tips for being borrower ready.

First, it is important to build a relationship with your bank and banker. Having this relationship will make it easier for both of you when you are ready to scale your business.

Lastly, and perhaps most importantly it’s important to keep easy-to-understand and accurate bookkeeping. The ability to repay is crucial when applying for a loan. Showing your business has strong cash flow will prove your business can repay and will make it easier for a bank to fund your loan.