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Here are 9 of the best minority business loans
Lender | NerdWallet Rating▼ | Max loan amount▼ | Min. credit score▼ | Next steps |
---|---|---|---|---|
SBA 7(a) loan with Fundera by NerdWallet | Best for SBA loans | $5,000,000 | 650 | with Fundera by NerdWallet |
Funding Circle - Online term loan with Fundera by NerdWallet | 4.5/5 Best for Established businesses | $500,000 | 660 | with Fundera by NerdWallet |
Fora Financial - Online term loan with Fundera by NerdWallet | 4.5/5 Best for Startups or bad credit | $1,500,000 | 570 | with Fundera by NerdWallet |
SBA Microloan with Fundera by NerdWallet | Best for Microloans | $50,000 | 620 | with Fundera by NerdWallet |
Accion Opportunity Fund - Small Business Working Capital Loan | 4.6/5 Best for Minority women | $250,000 | 570 | Read Review |
Huntington National Bank - Lift Local Business Program | Best for Minority veterans | $150,000 | Undisclosed | Read Review |
OnDeck - Online term loan with Fundera by NerdWallet | 4.7/5 Best for Fast business loans | $250,000 | 625 | with Fundera by NerdWallet |
Wells Fargo Small Business Advantage® Line of Credit | 4.7/5 Best for Bank business loans | $50,000 | 680 | Read Review |
Bank of America Cash Secured Line of credit | 4.6/5 Best for First-time business loans | Undisclosed | 670 | Read Review |
Here are 9 of the best minority business loans
Best for SBA loans
Best for Established businesses
Best for Startups or bad credit
Best for Microloans
Best for Minority women
Best for Minority veterans
Best for Fast business loans
Best for Bank business loans
Best for First-time business loans
I'M INTERESTED IN:
Our pick for
SBA loans
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.
SBA 7(a) loan
Pros
- Large borrowing maximums.
- Interest rates are capped.
- Long repayment terms available.
Cons
- Personal guarantee is required.
- Collateral is typically required.
- Longer processing times than online lenders.
SBA 7(a) loan
Pros
- Large borrowing maximums.
- Interest rates are capped.
- Long repayment terms available.
Cons
- Personal guarantee is required.
- Collateral is typically required.
- Longer processing times than online lenders.
Qualifications:
- For-profit U.S. business.
- Unable to access credit on reasonable terms from nongovernment sources.
- Financial qualifications determined by individual lender.
Our pick for
Established 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
Pros
- Cash can be available within two business days.
- Competitive rates among online lenders.
- Terms up to seven years.
Cons
- Requires business lien and personal guarantee.
- Must be in business for a minimum of two years.
- Minimum credit score is higher than some other lenders.
Funding Circle - Online term loan
Pros
- Cash can be available within two business days.
- Competitive rates among online lenders.
- Terms up to seven years.
Cons
- Requires business lien and personal guarantee.
- Must be in business for a minimum of two years.
- Minimum credit score is higher than some other lenders.
Qualifications:
- Minimum credit score: 660.
- Minimum time in business: Two years.
- Minimum annual revenue: $50,000.
- No bankruptcies in the past seven years.
Our pick for
Startups or 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
Pros
- Cash can be available quickly.
- Get a discount for prepaying.
- No collateral required.
- Low minimum credit score requirement.
Cons
- Charges a factor rate that makes it more difficult to compare costs with other lenders.
- Can’t build business credit.
- Longest loan term is 18 months.
Fora Financial - Online term loan
Pros
- Cash can be available quickly.
- Get a discount for prepaying.
- No collateral required.
- Low minimum credit score requirement.
Cons
- Charges a factor rate that makes it more difficult to compare costs with other lenders.
- Can’t build business credit.
- Longest loan term is 18 months.
Qualifications:
- In business for at least six months.
- At least $20,000 per month in revenue.
- No open bankruptcies or dismissed bankruptcies within the past year.
Our pick for
Microloans
SBA microloans offer smaller loan amounts and more flexible qualification requirements compared to other SBA loan programs. In the 2024 fiscal year, 46.6% of SBA microloans have gone to underserved communities, including Black- and Asian-owned businesses.
SBA Microloan
Pros
- Can be used for a variety of funding purposes.
- Designed to finance traditionally underserved businesses.
- Startups and business owners with bad credit may be able to qualify.
- Competitive interest rates, low fees and long repayment terms.
- Intermediaries typically offer business training and educational resources.
Cons
- Loan amounts max out at $50,000.
- Can’t be used to pay existing debt or purchase real estate.
- Collateral is likely required.
- Slow funding timeline.
SBA Microloan
Pros
- Can be used for a variety of funding purposes.
- Designed to finance traditionally underserved businesses.
- Startups and business owners with bad credit may be able to qualify.
- Competitive interest rates, low fees and long repayment terms.
- Intermediaries typically offer business training and educational resources.
Cons
- Loan amounts max out at $50,000.
- Can’t be used to pay existing debt or purchase real estate.
- Collateral is likely required.
- Slow funding timeline.
Qualifications:
- Be a U.S. business.
- Show your ability to repay the loan.
- Personal guarantee and collateral likely required.
- Specific financial qualifications determined by individual lender.
Our pick 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
Pros
- Loan amounts from $5,000 to $250,000.
- Customized loan terms.
- No prepayment penalty.
Cons
- Slower processing speed compared to online lenders.
- Not available in all U.S. states.
Accion Opportunity Fund - Small Business Working Capital Loan
Pros
- Loan amounts from $5,000 to $250,000.
- Customized loan terms.
- No prepayment penalty.
Cons
- Slower processing speed compared to online lenders.
- Not available in all U.S. states.
Qualifications:
- Minimum credit score: 570.
- Minimum time in business: 12 months.
- Minimum annual revenue: $50,000.
Our pick for
Minority veterans
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
Pros
- Loans starting as low as $1,000.
- No origination fees.
- SBA loans offered with SBA fees paid by Huntington.
- Free financial entrepreneurial courses.
Cons
- Low maximum loan amounts.
- Program only available in certain U.S. states.
- Limited information on terms and fees available online.
Huntington National Bank - Lift Local Business Program
Pros
- Loans starting as low as $1,000.
- No origination fees.
- SBA loans offered with SBA fees paid by Huntington.
- Free financial entrepreneurial courses.
Cons
- Low maximum loan amounts.
- Program only available in certain U.S. states.
- Limited information on terms and fees available online.
Qualifications:
- No bankruptcies in the last 4 years.
- Requirements for credit score, time in business and business revenue not disclosed.
Our pick for
Fast business loans
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
Pros
- Cash can be available within the same business day.
- Accepts borrowers with a minimum credit score of 625.
- Streamlined application process with minimal documentation required.
- Can be used to build business credit.
Cons
- Not available in Nevada, North Dakota or South Dakota.
- Requires frequent (daily or weekly) repayments.
- Interest rates can be high compared with traditional lenders.
- Requires business lien and personal guarantee.
OnDeck - Online term loan
Pros
- Cash can be available within the same business day.
- Accepts borrowers with a minimum credit score of 625.
- Streamlined application process with minimal documentation required.
- Can be used to build business credit.
Cons
- Not available in Nevada, North Dakota or South Dakota.
- Requires frequent (daily or weekly) repayments.
- Interest rates can be high compared with traditional lenders.
- Requires business lien and personal guarantee.
Qualifications:
- Minimum credit score: 625.
- Minimum time in business: One year.
- Minimum annual revenue: $100,000.
- Business bank account.
Our pick for
Bank business loans
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
Pros
- Bank line of credit (backed by the SBA) with competitive interest rates.
- No annual fee or prepayment penalties.
- Available to borrowers with less than two years in business.
Cons
- May take longer to fund than online lenders.
- Credit lines only available up to $50,000.
- Need a Wells Fargo checking account to access online bill pay.
Wells Fargo Small Business Advantage® Line of Credit
Pros
- Bank line of credit (backed by the SBA) with competitive interest rates.
- No annual fee or prepayment penalties.
- Available to borrowers with less than two years in business.
Cons
- May take longer to fund than online lenders.
- Credit lines only available up to $50,000.
- Need a Wells Fargo checking account to access online bill pay.
Qualifications:
- Minimum credit score: 680.
- Available to borrowers with less than two years in business.
- Household personal liquid assets must be less than $500,000.
- Must meet standard SBA loan requirements.
Our pick for
First-time business loans
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
Pros
- Available to borrowers with at least six months in business.
- No origination fee.
- Responsible spending can help you graduate to an unsecured credit line.
Cons
- Credit limit is based on the security deposit you provide.
- Must have a Bank of America checking or savings account to apply.
Bank of America Cash Secured Line of credit
Pros
- Available to borrowers with at least six months in business.
- No origination fee.
- Responsible spending can help you graduate to an unsecured credit line.
Cons
- Credit limit is based on the security deposit you provide.
- Must have a Bank of America checking or savings account to apply.
Qualifications:
- Minimum time in business: Six months.
- Minimum annual revenue: $50,000 per year.
- Bank of America checking or savings account required.
- Minimum deposit of $1,000.
A closer look at our picks for the best minority business loans
SBA 7(a) loans
Funding Circle
Fora Financial
SBA Microloans
Accion
Huntington Bank
SBA OnDeck
Wells Fargo
Bank of America
What is a business loan for minorities?
Who qualifies as a minority-owned business?
- Asian-Indian.
- Asian-Pacific.
- Black.
- Hispanic.
- Native American.
Where to get a minority business loan
SBA lenders
Minority depository institutions
Online and alternative lenders
Banks and credit unions
Community development financial institutions
Microlenders
Additional funding sources for minority-owned businesses
Other resources for minority-owned businesses
Organization | Overview |
---|---|
The MBDA is a federal agency dedicated exclusively to promoting the growth and competitiveness of minority-owned businesses. It operates a network of centers across the country, which offer assistance securing capital, competing for contracts and identifying new opportunities. | |
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. The NMSDC also partners with lenders and offers programs in executive leadership, marketing and operations. | |
Business Consortium Fund (BCF) is a nonprofit business development CDFI that works 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. |
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. | |
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. | |
The Office of Native American Affairs is an SBA office that provides 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 and financial analysis. |
Methodology
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.