By Ainsley Lawrence
Being an entrepreneur is an incredible opportunity. Not only do you get to bring your unique perspectives and innovative ideas to the market, but your approach as a businessperson can also drive change. Your choices can make you instrumental in boosting diverse workplaces in your area and providing support for the next generation of queer professionals.
Yet, there are still hurdles before you’re able to have this kind of impact. One of the significant challenges to starting a company is gaining funding through investments and loans. Indeed, it can be challenging for LGBTQ entrepreneurs in the South, due to persistent biases and discrimination.
So, let’s explore pitching to lenders as an LGBTQ entrepreneur. How can you best approach getting the funds to launch your business?
Navigating Biases
Let’s begin with the ugly yet unavoidable truth: there are still significant biases against the LGBTQ community. Indeed, one recent study found that LGBTQ-owned businesses reported more financing rejections than their non-LGBTQ counterparts. If you live in the South, the area’s reputation for widespread anti-queer sentiment can present hurdles.
So, what about your rights? Technically speaking, the Equal Credit Opportunity Act protects you. This prohibits lenders from discriminating against you for reasons based on sexual orientation or gender identity. As a result, if your business loan is refused or you’re subjected to less favorable terms, you can submit a complaint to the Consumer Financial Protection Bureau.
However, bias is often more insidious than this and often not always obvious. You’ll need to collect evidence to show that the lender has discriminated against you due to your LGBTQ status. This is a bit tricky. You may find it helpful to document all communications throughout the lending process, particularly if you’ve received negative comments related to your orientation or gender identity.
While it’s not the ideal solution, another option is to avoid organizations with a history of anti-LGBTQ bias altogether. In a just world, you shouldn’t have to pick and choose who you apply to for reasons of self-protection. But from a purely practical standpoint, each loan application takes a significant amount of your valuable time. For efficiency’s sake as much as anything else, you should apply to organizations with the highest chance of approval. Therefore, it’s worth doing some research into which lenders have a high standard of fairness and focus on those.
Identifying Programs and Loan Sources
Another important way to gain funding in the South is to identify sources that are explicitly designed to support LGBTQ entrepreneurs. Even with the South’s reputation, there’s still a growing number of organizations that recognize how vital diversity is to a thriving economy. The result is a range of programs, grants, and loans aimed at queer entrepreneurs. Many of these aren’t “either-or” options either. You should apply for them even if you’ve secured funding elsewhere.
Some of the most valuable schemes offer more than just money. Look for organizations that help to provide comprehensive support and capital for underrepresented communities. Companies like LGBT Capital, Diversity VC, and Backstage Capital offer help with fundraising, mentorship, and networking opportunities.
Don’t just prioritize generalized grants aimed at LGBTQ individuals, either. You’ll find that some funding opportunities are available for those who fall into narrower definitions of marginalized demographics. For instance, the SoGal Black Founder Startup grant provides funding for Black entrepreneurs self-identifying as women or non-binary individuals. There may even be relevant sources of funding for LGBTQ entrepreneurs in your target industry. A good example of this is the National LGBT Chamber of Commerce (NLGCC) Community Impact Grant Program, which provides support for those in the food and beverage sector.
Creating a Strong Business Plan
Let’s not beat about the bush here, a lender that may exhibit bias is not always likely to be forthright in their reasons for denying lending. They may use excuses, such as your business proposition seems shaky. Additionally, with the economy not in the greatest state, some lenders are already quite cautious about providing funds. Therefore, it’s always in your best interest to present the strongest possible case for your intended business idea.
This involves writing an in-depth business plan explicitly designed for loans and other funding. Some of the elements you should focus on here include:
- Keep the plan organized and clear: In order to effectively get buy-in from stakeholders, your plan should have a clear goal, an easy-to-follow timeline, and be transparent about why the project is important. Split your plan up into clearly defined and easy-to-navigate areas. These should include sections on your products and services, market analysis, and financial outlook, among others.
- Demonstrate your viability: Lenders will be looking at whether both your business and you as an entrepreneur are viable candidates. Make certain your plan expresses what it is about you as a professional and your experiences that make you a great business leader. Showing what investment you’ve personally placed into the company also demonstrates that you’re committed.
- Keep the plan readable: You want to provide as much clarity as possible in your plan. Avoid industry jargon. Use diagrams to visualize statistics and analysis results.
This isn’t to say that writing an effective business plan is necessarily easy. If you’re not sure about the right formatting, there are plenty of templates available. If it’s your first time creating a business plan, mentorship can be useful. Seek the advice of more experienced businesspeople, particularly those who have navigated the challenges of being queer entrepreneurs in the South. They may be able to provide the most relevant guidance.
Pitching Yourself as an Entrepreneur
When pitching your business to lenders, your business plan isn’t your only resource. Who you are and what you represent will also be under some scrutiny. You’re likely to be pitching in person or via video call to some extent, so it’s essential to take steps to demonstrate that you are the best possible representative of your company.
Let’s look at some of the elements that can affect this.
Appearance
What a person looks like is not necessarily a reflection of their business acumen. That said, a vital part of pitching yourself and your business is boosting the assessor’s confidence in you. Business casual dress is usually a solid approach here in terms of clothing.
Organization
Another element that tends to foster a good impression on lenders is seeing that the applicant is well-organized. This should include having all the important loan paperwork—financial records, personal identity and tax information, and business data, among others—in an easy-to-access file. Bring spares of everything, just in case something gets damaged or goes missing.
A high level of organization communicates to the lender that you could be a reliable and serious candidate. It also helps you during your pitch. You’ll be more confident knowing that all your resources are in order and that you can easily find any information the lender asks for.
Getting a business loan as an LGBTQ entrepreneur in the South is no walk in the park. It’s worth taking steps to make your journey a little smoother. This includes identifying fair lenders, using loan programs aimed at queer entrepreneurs, and honing your planning and pitching process. This isn’t the same as accepting that bias in entrepreneurism is just a fact of reality. Remember that queer entrepreneurism can be activism. Once your business is off the ground, you may find that you’re better able to put pressure on local business financing ecosystems. Together with other entrepreneurs, you can disrupt the discrimination that is still far too present in the South today.
