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Best Business Loans for Minorities of 2023

Last updated on September 13, 2023
Edited bySally Lauckner
✅Fact checked and reviewed

⏰ Estimated read time: 6 minutes

Minority entrepreneurs can use these small-business loans and other resources to grow their operations.

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Minority business loans are available from many lenders. But getting funding from a traditional financial institution may be tougher for minority business owners due to issues like unconscious bias, insufficient credit and limited banking history.
More success may be possible with alternative sources, such as nonprofit organizations and online lenders. These lenders tend to have flexible qualification requirements — and some even offer designed to assist traditionally underserved entrepreneurs.
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.

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Here are 9 small-business loans for minorities

LenderNerdWallet Rating▼Max loan amount▼Min. credit score▼Next 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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Fundbox - Line of credit

Read Review
5.0/5

Best for Small-business startup loans for minorities

$150,000600
Read Review

Fora Financial - Online term loan

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4.5/5

Best for Small-business loans for minorities with bad credit

$1,500,000500

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Funding Circle - Online term loan

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5.0/5

Best for Established minority-owned businesses

$500,000660

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Wells Fargo - Line of credit

Read Review
5.0/5

Best for Bank business loans for minorities

$50,000680
Read Review

Bank of America Cash Secured Line of credit

Read Review

Best for First-time business loans for minorities

$0670
Read Review

SBA Microloan

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Best for Microloans for minority-owned businesses

$50,000620

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Accion - Business Loans

Read Review
4.0/5

Best for Small-business loans for minority women

$250,000570
Read Review

Here are 9 small-business loans for minorities

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 startup loans for minorities

Fundbox

Max Amount

$150,000

Min. Credit Score

600

Read Review

Best for Small-business loans for minorities with bad credit

Fora Financial

Max Amount

$1,500,000

Min. Credit Score

500

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

Read Review

Best for First-time business loans for minorities

Bank of America

Max Amount

$0

Min. Credit Score

670

Read Review

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

Read Review

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 2022, minority business owners received over $8.3 billion in 7(a) loans.

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) program participants include specialized lenders like Live Oak Bank and big-name traditional banks like Wells Fargo.
Lowest interest rate

Max loan

$5,000,000

Min. Credit score

650

Apr range

11.50-15.00%

7(a) program participants include specialized lenders like Live Oak Bank and big-name traditional banks like Wells Fargo.
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

5.0
NerdWallet rating 
Read Review

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Max Loan Amount
$250,000
Min. credit score
625
Est. APR
35.40-99.90%
OnDeck offers a fast term loan for small-business owners with less-than-stellar credit who want to expand.
May fund quickly
5.0
NerdWallet rating 

Max loan

$250,000

Min. Credit score

625

Apr range

35.40-99.90%

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 startup loans for minorities

A business line of credit may be available from Fundbox if you have at least six months in business.

Fundbox - Line of credit

5.0
NerdWallet rating 
Read Review
Max Loan Amount
$150,000
Min. credit score
600
Est. APR
10.10-79.80%
Fundbox offers a business line of credit to fill a cash flow gap, and qualifying is easier than with other lenders.
May fund quickly
5.0
NerdWallet rating 

Max loan

$150,000

Min. Credit score

600

Apr range

10.10-79.80%

Fundbox offers a business line of credit to fill a cash flow gap, and qualifying is easier than with other lenders.
Read Review

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

4.5
NerdWallet rating 
Read Review

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Max Loan Amount
$1,500,000
Min. credit score
500
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.
4.5
NerdWallet rating 

Max loan

$1,500,000

Min. Credit score

500

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

5.0
NerdWallet rating 
Read Review

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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
5.0
NerdWallet rating 

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 - Line of credit

5.0
NerdWallet rating 
Read Review
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.
5.0
NerdWallet rating 

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.
Read Review

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

Read Review
Max Loan Amount
$0
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

$0

Min. Credit score

670

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

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 fiscal year 2022, 76% of SBA microloans went to underserved communities, including Hispanic- and Black-owned businesses.

SBA Microloan

Read Review

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Max Loan Amount
$50,000
Min. credit score
620
Est. APR
8.00-13.00%
The average microloan is roughly $13,000, according to the Small Business Administration.

Max loan

$50,000

Min. Credit score

620

Apr range

8.00-13.00%

The average microloan is roughly $13,000, according to the Small Business Administration.
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 - Business Loans

4.0
NerdWallet rating 
Read Review
Max Loan Amount
$250,000
Min. credit score
570
Est. APR
5.99-18.99%
Accion Opportunity Fund loans are an option for established businesses that haven’t been able to secure traditional financing due to poor credit, no credit history or a small loan amount.
4.0
NerdWallet rating 

Max loan

$250,000

Min. Credit score

570

Apr range

5.99-18.99%

Accion Opportunity Fund loans are an option for established businesses that haven’t been able to secure traditional financing due to poor credit, no credit history or a small loan amount.
Read Review

How Much Do You Need?

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What is 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, to be considered a minority-owned business in New York, business owners must be Black, Hispanic, Asian-Pacific, Asian-Indian Subcontinent, Native American or Alaskan Native.
A certification stating your business is minority-owned may be required for you to qualify for specific minority business loans or programs.

Where to get a minority business loan

SBA lenders

The U.S. Small Business Administration backs many types of, which are issued by banks and other lenders. One of the best SBA loan options for minority-owned businesses is the , which is specifically designed to provide financing for businesses in underserved communities.
Although this program will sunset on Sept. 30, 2023, the SBA has created a new license for Community Advantage lenders. These institutions can apply to become Community Advantage Small Business Lending Companies (CA SBLCs) and issue regular 7(a) loans under this new license.
CA SBLCs will continue to prioritize loans for business owners in underserved markets.

Online lenders

Alternative tend to have more flexible eligibility requirements than traditional banks. Some online lenders will even work with startups or businesses with bad credit. Loan amounts can range from about $1,000 to $500,000 or more. Minority applicants have a better chance of getting approved with online lenders than banks, according to the Federal Reserve, but your loan will likely cost more.

Nonprofit microlenders

Many mission-based nonprofit organizations offer to local businesses, often focusing on businesses owned by minority groups, women and veterans. The SBA also offers microloans of up to $50,000 through these nonprofit organizations. The can be a good option for startups, as well as business owners with less-than-perfect credit histories.
» MORE:

Community development financial institutions

Community development financial institutions, or , are banks, credit unions and other institutions that provide financial access, including loans, to minorities and other economically disadvantaged communities. For example, the Business Consortium Fund is a CDFI that provides minority business loans from $100,000 to $750,000. Many CDFIs also issue small-business loans for minorities through the SBA microloan program.

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. But traditionally, minority business owners have faced difficulties in getting approved for . If you can qualify for a business loan from a bank, however, this will likely be your most affordable option.

How to get a minority business loan

1. Determine your funding needs

You should decide 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 , for example — as well as how much debt you can afford.

2. Evaluate your credentials

You’ll want to consider your personal credit score, time in business and annual revenue to get a sense of where you stand before applying. You can also think about your cash flow, sales projections and .

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 National Minority Supplier Development Council.
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 by state.

4. Research and compare lenders

As you begin your search for financing, you should compare several 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 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.
» MORE:

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.

SBA 8(a) business development program

The does not offer loans. Rather, it’s a certification 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.

Small-business grants

The government and private organizations offer grants and awards to minority-owned businesses. Opportunities often vary drastically from state to state, but here are some to consider.

Minority Business Development Agency

Part of the U.S. Department of Commerce, the 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.

Free community resources

Many federal resources include regional or local offices, such as the SBA-backed . Your state, city or local business organization may also operate similar initiatives. These resources may be able to provide information on community financing, review your loan applications and offer mentorship and networking opportunities.

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

This program works with high-potential small businesses in America’s underserved cities. Participants receive customized training in order to grow and sustain their businesses. At the end of the , they create a three-year strategic growth action plan.

SCORE

Though it’s not specifically geared toward minority business owners, is a free volunteer program that connects entrepreneurs with seasoned business mentors who have a wealth of knowledge about business funding challenges.
Last updated on September 13, 2023

Methodology

NerdWallet reviewed both traditional and online lenders in order to create our list of the best small-business loans for minorities.
Our list includes a variety of loan options to meet the diverse funding needs of small-business owners, with an emphasis on lenders that offer a streamlined underwriting and approval process.
Each small-business loan option on our list meets the following criteria:
- Maximum loan amount of at least $50,000.
- Transparent rates and repayment terms.
- Funding available within two weeks of applying.
- Personal credit score requirements of 680 or below.
- No more than two years in business required.

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.

Learn more