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Best Business Loans for Minorities of 2024 of July 2024

By Randa Kriss
Last updated on June 20, 2024
Edited bySally Lauckner
Fact checked and reviewed
Minority entrepreneurs can use these small-business loans and other resources to grow their operations.

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Minority business loans are intended to increase access to capital for Asian-, Black-, Hispanic- and Native American-owned small businesses. In 2023, minority-owned businesses were nearly half as likely to be approved for financing than white-owned firms, according to findings from the Federal Reserve’s 2023 Small-Business Credit Survey.
Many lenders offer loans for minority-owned businesses, but getting funding from a traditional financial institution may be tougher for some business owners due to issues like unconscious bias, credit challenges or limited banking history.
Many alternative lending sources, like nonprofit organizations and online lenders, offer small-business loans specifically to minority-owned businesses. Such products tend to have more flexible qualification requirements than traditional loans, and may require you to submit a certification stating your business is minority-owned.
Below, compare some of the best business loans for minority business owners, plus learn more about other financing options and resources, including grants and certifications.

How much do you need?

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We’ll start with a brief questionnaire to better understand the unique needs of your business.

Once we uncover your personalized matches, our team will consult you on the process moving forward.

Here are 9 minority business loans

LenderNerdWallet RatingMax loan amountMin. credit scoreNext steps

SBA 7(a) loan

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Best for SBA loans for minorities

$5,000,000650

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OnDeck - Online term loan

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5.0/5

Best for Fast business loans for minorities

$250,000625

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Fora Financial - Online term loan

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4.5/5

Best for Small-business loans for minorities with bad credit

$1,500,000570

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Funding Circle - Online term loan

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4.5/5

Best for Established minority-owned businesses

$500,000660

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Wells Fargo Small Business Advantage® Line of Credit

5.0/5

Best for Bank business loans for minorities

$50,000680
Read Review

Bank of America Cash Secured Line of credit

5.0/5

Best for First-time business loans for minorities

Undisclosed670
Read Review

SBA Microloan

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Best for Microloans for minority-owned businesses

$50,000620

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Accion Opportunity Fund - Small Business Working Capital Loan

5.0/5

Best for Small-business loans for minority women

$250,000570
Read Review

Huntington National Bank - Lift Local Business Program

Best for Startup loans for minorities

$150,000Undisclosed
Read Review

Here are 9 minority business loans

Best for SBA loans for minorities

U.S. Small Business Administration

Max Amount

$5,000,000

Min. Credit Score

650

Best for Fast business loans for minorities

OnDeck

Max Amount

$250,000

Min. Credit Score

625

Best for Small-business loans for minorities with bad credit

Fora Financial

Max Amount

$1,500,000

Min. Credit Score

570

Best for Established minority-owned businesses

Funding Circle

Max Amount

$500,000

Min. Credit Score

660

Best for Bank business loans for minorities

Wells Fargo

Max Amount

$50,000

Min. Credit Score

680

Best for First-time business loans for minorities

Bank of America

Max Amount

Undisclosed

Min. Credit Score

670

Best for Microloans for minority-owned businesses

U.S. Small Business Administration

Max Amount

$50,000

Min. Credit Score

620

Best for Small-business loans for minority women

Accion

Max Amount

$250,000

Min. Credit Score

570

Best for Startup loans for minorities

Huntington National Bank

Max Amount

$150,000

Min. Credit Score

Undisclosed

I'M INTERESTED IN:

Our pick for

SBA loans for minorities

SBA 7(a) loans offer competitive rates and terms and can be used for a variety of funding needs. In fiscal year 2024, minority business owners have received over $3 billion in 7(a) loans, to date.

SBA 7(a) loan

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Max Loan Amount
$5,000,000
Min. credit score
650
Est. APR
11.50-15.00%
7(a) loans are issued by private lenders and backed by the SBA. They offer long repayment terms and low interest rates.
Lowest interest rate

Max loan

$5,000,000

Min. Credit score

650

Apr range

11.50-15.00%

7(a) loans are issued by private lenders and backed by the SBA. They offer long repayment terms and low interest rates.
Read Review

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Our pick for

Fast business loans for minorities

OnDeck offers quick short-term loans that can fund as quickly as the same day. These loans are good for specific, one-time purchases.

OnDeck - Online term loan

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Max Loan Amount
$250,000
Min. credit score
625
Est. APR
27.20-99.90%
OnDeck offers a fast term loan for small-business owners with less-than-stellar credit who want to expand.
May fund quickly

Max loan

$250,000

Min. Credit score

625

Apr range

27.20-99.90%

OnDeck offers a fast term loan for small-business owners with less-than-stellar credit who want to expand.
Read Review

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Our pick for

Small-business loans for minorities with bad credit

If you have a credit score of 500 or higher, you may be able to qualify for a short-term loan from Fora Financial.

Fora Financial - Online term loan

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Max Loan Amount
$1,500,000
Min. credit score
570
Fora Financial can be a good fit for borrowers who may fall short of qualifying for traditional bank financing or young but established small businesses looking for speedy financing.

Max loan

$1,500,000

Min. Credit score

570

Fora Financial can be a good fit for borrowers who may fall short of qualifying for traditional bank financing or young but established small businesses looking for speedy financing.
Read Review

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Our pick for

Established minority-owned businesses

Established businesses with strong credit may qualify for an online small-business loan with terms up to seven years. Funding can be available within two business days.

Funding Circle - Online term loan

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Max Loan Amount
$500,000
Min. credit score
660
Est. APR
15.22-45.00%
Funding Circle is an option for established businesses that are financing an expansion or refinancing debt.
May fund quickly

Max loan

$500,000

Min. Credit score

660

Apr range

15.22-45.00%

Funding Circle is an option for established businesses that are financing an expansion or refinancing debt.
Read Review

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Our pick for

Bank business loans for minorities

Wells Fargo’s unsecured line of credit is designed for companies with less than two years in business and may be easier to qualify for than other bank loans.

Wells Fargo Small Business Advantage® Line of Credit

Max Loan Amount
$50,000
Min. credit score
680
Est. APR
13.00-15.00%
Wells Fargo offers an unsecured line of credit that’s designed for borrowers with less than two years in business.

Max loan

$50,000

Min. Credit score

680

Apr range

13.00-15.00%

Wells Fargo offers an unsecured line of credit that’s designed for borrowers with less than two years in business.

Our pick for

First-time business loans for minorities

If you’re just starting out, Bank of America’s cash secured line of credit allows you to pay for daily expenses while establishing a positive account history and building business credit.

Bank of America Cash Secured Line of credit

Max Loan Amount
Undisclosed
Min. credit score
670
Bank of America’s Cash Secured line of credit can help startups cover working capital needs and establish business credit.

Max loan

Undisclosed

Min. Credit score

670

Bank of America’s Cash Secured line of credit can help startups cover working capital needs and establish business credit.

Our pick for

Microloans for minority-owned businesses

SBA microloans offer smaller loan amounts and more flexible qualification requirements compared to other SBA loan programs. In the 2024 fiscal year, so far, 49% of SBA microloans have gone to underserved communities, including Black- and Asian-owned businesses.

SBA Microloan

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Max Loan Amount
$50,000
Min. credit score
620
Est. APR
8.00-13.00%
SBA microloans are small-sized loans funded by the U.S. Small Business Administration and issued through approved intermediaries, typically nonprofit and community lenders.

Max loan

$50,000

Min. Credit score

620

Apr range

8.00-13.00%

SBA microloans are small-sized loans funded by the U.S. Small Business Administration and issued through approved intermediaries, typically nonprofit and community lenders.
Read Review

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Our pick for

Small-business loans for minority women

Accion is a nonprofit lender that primarily issues loans to business owners in traditionally underserved communities, including women and people of color.

Accion Opportunity Fund - Small Business Working Capital Loan

Max Loan Amount
$250,000
Min. credit score
570
Est. APR
8.49-24.99%
Accion is a good option for businesses that haven't been able to secure traditional financing. The lender targets its funding efforts toward minority, women and low-to-moderate-income entrepreneurs.

Max loan

$250,000

Min. Credit score

570

Apr range

8.49-24.99%

Accion is a good option for businesses that haven't been able to secure traditional financing. The lender targets its funding efforts toward minority, women and low-to-moderate-income entrepreneurs.

Our pick for

Startup loans for minorities

Huntington Bank’s Lift Local Business Program offers loans between $1,000 and $150,000 to minority-, women- and veteran-owned businesses at any stage of growth.

Huntington National Bank - Lift Local Business Program

Max Loan Amount
$150,000
Min. credit score
Undisclosed
Huntington National’s Lift Local Business loan program is designed to support minority-, woman- and veteran-owned small businesses from startup and on.

Max loan

$150,000

Min. Credit score

Undisclosed

Huntington National’s Lift Local Business loan program is designed to support minority-, woman- and veteran-owned small businesses from startup and on.

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Details on our picks for the best minority business loans

SBA 7(a) loans

Best for SBA loans for minority entrepreneurs
Notable features:
  • $5 million loan maximum. 
  • Flexible uses. 
Who should consider it: SBA 7(a) loans are a good option for minority-owned businesses that are fairly established, and are not in a rush to receive financing. If you can qualify with an SBA lender and you can afford the time it takes to process an SBA loan, the high loan amounts, flexible uses and low rates make this a great option.
Read more about SBA (7) loans.

OnDeck

Best for fast business loans for minorities
Notable features:
  • Same-day funding. 
  • Check eligibility without affecting your credit. 
  • Streamlined, direct application online. 
Who should consider it: Minority business owners who need to access fast capital, or are struggling to qualify with a traditional lender will find OnDeck’s streamlined applications and potential same-day funding a good option. Business owners who prefer to limit in-person interactions with bankers may also opt for OnDeck’s fully online process.
Read our full OnDeck review.

Fora Financial

Best for minority entrepreneurs with bad credit
Notable features:
  • Up to $1.5 million in loan amounts. 
  • Can borrow more money after 60% of your loan is repaid. 
  • Flexible uses. 
  • Low minimum credit score requirements. 
Who should consider it: Fora Financial’s use of factor rates makes its loans fairly expensive compared to other options, which means these loans are best for minority business owners who can’t qualify for other options because of personal credit.
Read our full Fora Financial review.

Funding Circle

Best for established minority-owned businesses
Notable features:
Who should consider it: Funding Circle offers long-term business loans compared to other online lenders, which makes it a good online option for established minority-owned businesses that are looking to make larger, long-term purchases. Extending your term can make your monthly payments more affordable, and with no prepayment penalties, you can pay your loan off early to save on interest.
Read our full Funding Circle review.

Wells Fargo

Best for bank business loans for minorities
Notable features:
  • No annual fee. 
  • Low rates. 
  • Earns rewards. 
Who should consider it: Wells Fargo’s Small Business Advantage Line of Credit is designed for early-stage businesses to help them build credit. This option is best for minority-owned startups for entrepreneurs with strong personal credit who could use a revolving source of funding to cover gaps in cash flow, have small urgent needs or simply want to build business credit.

Bank of America

Best for first-time business loans for minorities
Notable features:
  • Minimal length of time in business and revenue requirements. 
  • Can transition to an unsecured line of credit after two years. 
Who should consider it: If your credit prevents you from qualifying for an unsecured bank line of credit, you may opt for a secured credit line to help build business credit. Bank of America’s cash-secured line is great for minority business owners who are still in the startup phase and have a small amount of cash on hand to secure the line.

SBA Microloans

Best for microloans for minority-owned businesses
Notable features:
  • Loan amounts below $50,000. 
  • Flexible loan uses. 
  • Competitive interest rates. 
Who should consider it: Minority-owned businesses that need minimal capital to get started, or for ongoing expenses. You may find low loan amounts with some online lenders, but they will likely be more expensive than an SBA microloan.
Read more about SBA microloans.

Accion

Best for business loans for minority women
Notable features:
  • Coaching and mentoring available to clients. 
  • Personalized experience. 
  • Low rates. 
  • Chance to review multiple offers.
Who should consider it: Accion is a great option for early-stage minority-owned companies that could benefit from additional personalized support alongside funding. If you need guidance navigating the business funding space, Accion will help even if it is not able to provide funding.
Read our full Accion review.

Huntington Bank

Best for startup loans for minorities
Notable features:
  • No origination fees. 
  • Long repayment terms. 
  • Low credit score requirements. 
  • No length of time in business requirement. 
Who should consider it: The Lift Local Business Program is a great option for early-stage minority-owned businesses, or those that are facing a time of business transition or expansion. In addition to accessing capital, you can take advantage of personalized planning support and resources.

Who qualifies as a minority-owned business?

A business is typically considered to be minority-owned if it’s at least 51% owned and operated by people of specific ethnicities. For example, the National Minority Supplier Development Council (NMSDC), defines a minority business owner as an American citizen who is at least 25% Asian-Indian, Asian-Pacific, Black, Hispanic or Native American.

How to get certified as a minority-owned business

Although certification as a minority-owned business isn’t always required to apply for a business loan, it can be helpful for other opportunities such as government contracts, business grants and business resource programs. Options to get certified as a minority-owned business are often available through your city or state government as well as the NMSDC.
Typically, you’ll need to be able to show that your business is 51% owned and operated by individuals that meet specific ethnic definitions. The requirements and process to become certified, however, can vary. Some programs, like the SBA 8(a) Program, require you to renew your business’s certification on an annual basis.

How to get a minority business loan

  1. Determine your funding needs. Start by deciding how much capital you need and how you’re going to use it. You’ll also want to consider the loan type that might be best for your needs — a term loan vs. line of credit, for example — as well as how much debt you can afford.
  2. Evaluate your credentials. Consider your personal credit score, time in business and annual revenue to get a sense of where you stand before applying. Also think about your cash flow, sales projections and available collateral.
  3. Get certified as a minority-owned business. Although this certification isn’t required to apply for a business loan, it may be helpful for opportunities now and in the future. You can get certified as a minority-owned business through your state, or through the NMSDC.
  4. Research and compare lenders. As you begin your search for financing, you should compare several small-business lenders to find the right fit for your needs. You’ll want to consider factors such as loan offerings, interest rates, repayment terms, qualifications, funding speed and lender reputation.
  5. Gather your documentation and apply. Although business loan requirements and application processes will vary by lender, you’ll generally need to provide bank statements, tax returns and other business financial documents. The more accurately you can complete the lender’s application, the faster you will be able to receive a decision. Some online lenders can fund applications within the same day, whereas others will take a few business days. More traditional lenders, like bank and SBA lenders, can take several days to several weeks.

Where to get a minority business loan

SBA lenders

The U.S. Small Business Administration says it is committed to supporting minority-owned businesses as well as underserved small-business owners. The SBA guarantees SBA loans, which are issued by banks and other lenders. This includes SBA 7(a) loans with maximum loan amounts up to $5 million and SBA microloans, up to $50,000, which can be a good option for startups, as well as business owners with less-than-perfect credit histories.
One of the best SBA loan options for minority-owned businesses is working with Community Advantage Small Business Lending Companies (CA SBLCs), previously Community Advantage lenders. Although the SBA Community Advantage program expired on Sept. 30, 2023, the CA SBLC license allows these lenders to issue regular 7(a) loans. CA SBLCs will continue to prioritize loans for business owners in underserved markets.
For example, Accompany Capital offers CA loans to immigrants, refugees and other underserved entrepreneurs in the New York area. Loan rates are fixed at 8% for at least the first 36 months of the loan’s term, and loan amounts go up to $350,000.

Online and alternative lenders

Alternative lenders, which include online lenders, are third-party lending companies that don’t hold deposits like banks or credit unions do. Alternative lenders may offer more flexibility in loan amounts and requirements than traditional banks, and many target funding access to minority-owned businesses or other underserved communities.
Online business lenders tend to have more flexible eligibility requirements than traditional banks. Some online lenders will work with startups or businesses with bad credit. Loan amounts can range from about $1,000 to $500,000 or more. While minority applicants have a better chance of getting approved with online lenders than banks, according to the Federal Reserve, the loan will likely cost more.
Founders First Capital is a lending company that offers financing to underrepresented businesses in the technology, SaaS and engineering industries. It has flexible requirements for approval, and offers flexible repayment terms and loan amounts up to $2 million.

Banks and credit unions

Banks and credit unions typically offer the most competitive business loans, and some — such as U.S Bank, Huntington Bank, Fifth Third Bank and Native American Bank — offer lending programs dedicated to minority-owned businesses. Traditionally, minority business owners have faced difficulties in getting approved for small-business bank loans, however if you can qualify for a business loan from a bank, this will likely be your most affordable option.

Community development financial institutions

Community development financial institutions, or CDFIs, are banks, credit unions and other institutions that provide financial access, including loans, to minorities and other economically disadvantaged communities. The Business Consortium Fund, for example, is a CDFI that provides minority business loans from $100,000 to $750,000 (or more in some cases).
Many CDFIs also utilize the SBA microloan program, and provide other resources, like counseling and networking, for minority-owned businesses. Latino Economic Development Center (LEDC) offers loans to Latino- and other underserved business owners, as well as access to business advisors who provide training seminars and one-on-one coaching.
Camino Financial is an online lender that offers unsecured loans for minority-owned businesses between $10,000 and $50,000 with no prepayment penalties. You’ll need a personal credit score of 670, but only need to have been operating for 12 months with monthly sales of only $2,500.

Minority depository institutions

Minority depository institutions (MDIs) are mission-driven banks that provide banking services and loans to underserved communities. They are officially defined as financial institutions whose voting stock is at least 51% owned by minority individuals, or if the majority of the board of directors is part of an underserved community and the primary community served is predominantly minority.
Agility Bank, for example, is a women-owned and led bank based in Houston, Texas. It offers term loans, lines of credit, commercial real estate loans and SBA loans to businesses located in the Houston area.

Microlenders

Many mission-based nonprofit organizations offer microloans to local businesses, often focusing on businesses owned by minority groups, women and veterans. Microlenders typically offer small loan amounts up to $50,000. These loans can have more flexible qualification requirements, but eligibility and loan terms will vary by lender.

Additional funding sources for minority-owned businesses

  • Grants for minority entrepreneurs. The government and private organizations offer business grants and awards to minority-owned businesses. Opportunities often vary drastically from state to state, but here are some minority small-business grants to consider.
  • Venture capital. Venture capital firms are third-party investment companies that fund startups and entrepreneurs in exchange for a percentage of ownership in your business. Firms like Oakland-based Kapor Capital and Harlem-based Harlem Capital are dedicated to closing the gap in venture capital that many minority-owned businesses experience.  
  • Friends and family. If you’re struggling to qualify for traditional funding, borrowing from friends and family is also an option, and may allow you to avoid paying too much in interest. Accepting a business loan from family or friends does have the potential to affect personal relationships, however, so it’s best to make sure you trust the person you ask, and put the terms of your agreement in writing. 
  • Self-funding. Self-funding, also known as bootstrapping, is another option to fund your business, if you have enough money in savings. You may also consider Rollovers as Business Startups (ROBS) transactions, which allow you to use retirement savings to fund your company. With self-funding you can save money on interest and avoid diluting your ownership; however, you are at risk of losing your own money if your business fails. 

Other resources for minority-owned businesses

Government and nonprofit organizations may offer free assistance to minority entrepreneurs. These resources may help you gain access to alternative financing options, educational tools or advice from industry experts.

Minority Business Development Agency

Part of the U.S. Department of Commerce, the MBDA is a federal agency that is dedicated exclusively to promoting the growth and competitiveness of minority-owned businesses. The MBDA operates a network of centers across the country, which offer assistance securing capital, competing for contracts and identifying new opportunities.

National Minority Supplier Development Council

The NMSDC is a national nonprofit organization that — in addition to its MBE certification process — links MBEs with corporate members to promote growth and access for minority-owned businesses through its 23 regional chapters. Originally created to promote minority suppliers across all industries, the NMSDC also partners with lenders and offers resources and programs in executive leadership, marketing and operations.

Business Consortium Fund

Business Consortium Fund (BCF) is a nonprofit business development CDFI that works closely with the NMSDC to develop and fund certified minority-owned small businesses, particularly those with supply-chain contracts.

SBA 8(a) business development program

The SBA 8(a) program is a certification program that can help small businesses interested in government contracting improve their chances of winning bids. To qualify, your firm must be 51% controlled by “socially and economically disadvantaged individuals,” which includes minorities, women and veterans.

SBA HUBZone Program

The SBA’s HUBZone Program is a certification program dedicated to awarding government contracts to businesses in underutilized zones, specifically designated as HUBZones. HUBZone-certified businesses are eligible to compete for contracts that are specifically set aside for small-business owners, and get a 10% price evaluation preference.

T.H.R.I.V.E. Emerging Leaders Reimagined

The Emerging Leaders program, an SBA Office of Entrepreneurial Development initiative, works with high-potential, established small businesses in America’s underserved cities. Participants receive customized training and networking opportunities in order to create a three-year strategic growth action plan for their businesses.

SBA Office of Native American Affairs

The Office of Native American Affairs is an SBA office dedicated to providing resources to small-business owners with American Indian, Alaskan Native or Native Hawaiian heritage. The office offers free technical assistance in areas such as marketing, strategic planning, compliance, financial analysis and more.

Free community resources

Your state, city or local business organization may operate initiatives to support small businesses. For example, New York City offers services through the NYC Small Business Support Center. And California small-business owners may make use of the California Network of Small Business Technical Assistance Centers.
Last updated on June 20, 2024

Methodology

NerdWallet’s review process evaluates and rates small-business loan products from traditional banks and online lenders. We collect over 30 data points on each lender using company websites and public documents. We may also go through a lender’s initial application flow and reach out to company representatives. NerdWallet writers and editors conduct a full fact check and update annually, but also make updates throughout the year as necessary.
Our star ratings award points to lenders that offer small-business friendly features, including: transparency of rates and terms, flexible payment options, fast funding times, accessible customer service, reporting of payments to business credit bureaus and responsible lending practices. We weigh these factors based on our assessment of which are the most important to small-business owners and how meaningfully they impact borrowers’ experiences.
NerdWallet does not receive compensation for our star ratings. Read more about our ratings methodology for small-business loans and our editorial guidelines.

Wondering if you qualify?

It’s possible to get a business loan even if you have bad credit. Bad-credit business loans are available from alternative sources, like online or nonprofit lenders.

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Frequently Asked Questions