7 Helpful Financing Options for LGBTQ+ Entrepreneurs
Discrimination and disadvantages have been the norm, but that is beginning to change.
Are you a business owner who identifies as LGBTQ+? If so, then you know that discrimination can run rampant, and there aren’t always legal protections. Part and parcel, the LGBTQ+ community also struggles with financial instability, experiencing particularly high rates of poverty and homelessness and commanding lower incomes than the general population.
Nevertheless, you can still succeed as an LGBTQ+ business owner, and here are seven helpful financing options to get you started.
1. Join the National LGBT Chamber of Commerce
The National LGBT Chamber of Commerce (NGLCC) is a national organization serving as the voice of over one million American LGBTQ+ business owners, and it offers a certification program to majority-LGBTQ+-owned businesses.
The NGLCC Supplier Diversity Initiative (SDI) is a tool for businesses to connect with top corporations in America, many federal government agencies and other certified companies. The SDI certifies lesbian, gay, bisexual and transgender-owned business enterprises — dubbed LGBTBEs — working to provide opportunities for them to get exposure to government and corporate procurement processes. SDI includes registration in NGLCC’s exclusive database, which is searched by corporations and other LGBTBEs for product and service needs.
2. Join your local LGBT business chamber of commerce
LGBTQ+ entrepreneurs can take advantage of resources within their local chamber of commerce, as the NGLCC has local branches in 30 states and Washington, D.C. These branches will connect you with local businesses and resources, including banks.
3. Try community development financial institutions
Community development financial institutions, or CDFIs, are private organizations fully focused on lending to low-income or disadvantaged people and businesses in their communities. A CDFI can be a bank, credit union or loan fund, or take the form of venture-capital funds.
4. Try for angel investors
Does your business have high-growth potential? If so, then angel investors may be interested. Gaingels co-invests with other venture-capital firms to influence social progress via investing in companies with LGBTQ+ leadership. They also invest in some growth-stage businesses where they can influence the addition of LGBTQ+ C-suite talent.
Also, consider Pipeline Angels. This firm invests in women and non-binary femme entrepreneurs and holds an angel-investing bootcamp. Their pitch summit is by invitation and allows women and non-binary femme social entrepreneurs to present their for-profit social ventures.
Lastly, Republic concentrates on diverse entrepreneurs of all genders, and looks outside of California and New York for businesses to invest in. Investing in Republic is open to anyone for as little as $25.
5. Check with the Small Business Administration
The Small Business Administration (SBA) supports a network of LGBTQ+-owned businesses, with the hopes of fostering economic empowerment in the LGBTQ+ business community and providing access to SBA programs and services. Several district offices maintain a strategic alliance with the LGBTQ+ business community.
6. Be sure to join StartOut
StartOut is a nonprofit organization serving LBGTQ+ entrepreneurs and businesses that's looking to increase the number, diversity and impact of LGBTQ+ business owners. Events include educational opportunities, networking and awards ceremonies.
StartOut Rising extends StartOut’s reach to cities where they do not yet have a chapter and offers local LGBTQ+ entrepreneurs the opportunity to network via MeetUp.
7. Seek out and qualify for supplier diversity programs
Beyond the NGLCC Supplier Diversity Initiative, there are other places where being an LGBTQ+ business owner means your company is considered to be diverse. In 2015, Massachusetts became the first state to include LGBTQ+-owned businesses in its supplier diversity program.
Marriott has a supplier diversity program that includes LGBTQ+ in its definition of diversity. So do Ford and IBM. Per the Human Rights Campaign, 193 of the Fortune 500 have such programs. So do the California Public Utilities Commission, the city of Baltimore and the city of Cleveland. Check with local businesses and governments.Related: The LGBTQ+ Community Has $3.7 Trillion in Purchasing Power
Bonus suggestion: traditional funding
LGBTQ+ business owners can, and should, always try for the same kinds of funding as other companies. Options include microlenders, venture capital, crowdfunding, term loans and merchant-cash advances. Many providers will open their wallets for businesses that meet several fundability criteria. These include being incorporated, having a professional email address and building good business credit.As times continue to change, there is every possibility that even more financing options will open up, and LGBTQ+ business owners can finally thrive on the same playing field as their peers.
Entrepreneur Leadership Network Writer