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Here are 10 small-business loans for minorities
| Lender | NerdWallet Rating▼ | Max loan amount▼ | Min. credit score▼ | Next steps |
|---|---|---|---|---|
SBA 7(a) loan with Fundera by NerdWallet | Best for SBA loans for minorities | $5,000,000 | 650 | with Fundera by NerdWallet |
OnDeck - Online term loan with Fundera by NerdWallet | 5.0/5 Best for Fast business loans for minorities | $250,000 | 625 | with Fundera by NerdWallet |
Fundbox - Line of credit | 5.0/5 Best for Startup business loans for minorities with low revenue | $150,000 | 600 | |
Fora Financial - Online term loan with Fundera by NerdWallet | 4.5/5 Best for Small-business loans for minorities with bad credit | $1,500,000 | 570 | with Fundera by NerdWallet |
Funding Circle - Online term loan with Fundera by NerdWallet | 4.5/5 Best for Established minority-owned businesses | $500,000 | 660 | with Fundera by NerdWallet |
National Funding - Equipment Financing with Fundera by NerdWallet | 4.5/5 Best for Equipment loans for minority-owned businesses | $150,000 | 600 | with Fundera by NerdWallet |
Wells Fargo Small Business Advantage® Line of Credit | 5.0/5 Best for Bank business loans for minorities | $50,000 | 680 | |
Bank of America Cash Secured Line of credit | 5.0/5 Best for First-time business loans for minorities | Undisclosed | 670 | |
SBA Microloan with Fundera by NerdWallet | Best for Microloans for minority-owned businesses | $50,000 | 620 | with Fundera by NerdWallet |
Accion Opportunity Fund - Small Business Working Capital Loan | 5.0/5 Best for Small-business loans for minority women | $250,000 | 570 | |
Here are 10 small-business loans for minorities
Best for SBA loans for minorities
Best for Fast business loans for minorities
Best for Startup business loans for minorities with low revenue
Fundbox
Max Amount
$150,000
Min. Credit Score
600
Best for Small-business loans for minorities with bad credit
Best for Established minority-owned businesses
Best for Equipment loans for minority-owned businesses
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
Best for Small-business loans for minority women
Accion
Max Amount
$250,000
Min. Credit Score
570
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
with Fundera by NerdWallet
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%
with Fundera by NerdWallet
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
with Fundera by NerdWallet
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%
with Fundera by NerdWallet
Our pick for
Startup business loans for minorities with low revenue
A business line of credit may be available from Fundbox if you have at least six months in business, and a credit score of 600.
Fundbox - Line of credit
Max Loan Amount
$150,000
Min. credit score
600
Est. APR
36.00-99.00%
Fundbox offers a business line of credit to fill a cash flow gap, and qualifying is easier than with other lenders.
May fund quickly
Max loan
$150,000
Min. Credit score
600
Apr range
36.00-99.00%
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
with Fundera by NerdWallet
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
with Fundera by NerdWallet
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
with Fundera by NerdWallet
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%
with Fundera by NerdWallet
Our pick for
Equipment loans for minority-owned businesses
National Funding offers equipment financing with flexible qualification requirements and no down payment which can make it easier to qualify for than other financing options.
National Funding - Equipment Financing
with Fundera by NerdWallet
Max Loan Amount
$150,000
Min. credit score
600
Borrowers who can't qualify for more traditional loan options might consider National Funding for fast access to capital.
Max loan
$150,000
Min. Credit score
600
with Fundera by NerdWallet
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%
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
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
with Fundera by NerdWallet
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%
with Fundera by NerdWallet
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
8.49-29.67%
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
8.49-29.67%
Our picks for the best minority business loans
SBA 7(a) loans
Best for SBA loans for minority entrepreneurs
Why we picked it: So far in the 2024 fiscal year, more than 32% of SBA 7(a) loans have gone to minority business owners (those who identify as Black, Asian, Hispanic, American Indian or Alaska Native), totaling more than $4 billion in funding. SBA 7(a) loans can be used for a wide array of business purposes, and offer low rates and favorable terms to those who qualify.
Read more about SBA (7) loans.
OnDeck
Best for fast business loans for minorities
Why we picked it: OnDeck is an online business lender that offers a streamlined application, and same-day funding can be available. Its qualifications are relatively flexible — 625 credit score and $8,333 in monthly revenue — however, a general lien and a personal guarantee are required.
Read our full OnDeck review.
Fundbox
Best for startup business loans for minorities with low revenue
Why we picked it: Fundbox is an online lender, which means the application and funding process should be faster than a traditional lender. It also has low minimum qualification requirements — a 600 credit score, only six months in business and $100,000 in annual revenue — making it a good fit for startups, as well as low-revenue businesses.
Read our full Fundbox review.
Fora Financial
Best for minority entrepreneurs with bad credit
Why we picked it: Fora Financial combines flexibility in funding qualification requirements with high maximum loan amounts. It’s the only online lender on our list with a minimum credit score requirement below 600, and has a high loan maximum at $1.5 million. Make sure you are diligent in planning and purpose though — Fora uses factor rates rather than APRs, which can be expensive and difficult to compare with other lending options.
Read our full Fora Financial review.
Funding Circle
Best for established minority-owned businesses
Why we picked it: For businesses that have been operating for at least two years, Funding Circle’s business loans offer flexible terms up to seven years, which can be more affordable for larger business purchases. For the favorable terms, competitive rates and the loan amounts, the minimum qualifications (660 credit score and no specific revenue requirement) are fairly flexible.
Read our full Funding Circle review.
National Funding
Best for equipment loans for minority-owned businesses
Why we picked it: National Funding offers equipment loans that are industry specific — everything from auto repair and landscaping to daycare and assisted living facilities. Its flexibility in requirements (lower minimum personal credit score, shorter time in business and no down payment or collateral needed) help to reduce traditional barriers to accessing business capital.
Read our full National Funding review.
Wells Fargo
Best for bank business loans for minorities
Why we picked it: If you have good personal credit (a score of at least 680), you may qualify for a Wells Fargo Small Business Advantage Line of Credit — even with less than two years in business. The maximum limit is $50,000; however, the credit line can be helpful to build your business’s credit at a low rate for future lending needs.
Read our full Wells Fargo business loans review.
Bank of America
Best for first-time business loans for minorities
Why we picked it: Bank of America’s cash-secured business line of credit has relatively flexible requirements if your business is less-established, and can help your business start to build credit. The minimum deposit to secure the line of credit is $1,000, and your limit is based on the total amount you’ve deposited. After one year of good standing, your account can be reviewed to graduate to an unsecured credit line, at which time your original deposit will be refunded to you.
Read our full Bank of America business loans review.
SBA Microloans
Best for microloans for minority-owned businesses
Why we picked it: Many larger lenders don’t find it lucrative to lend in small amounts; however, if your business is forced to take more money than it needs, it can end up doing more harm than good. SBA microloans fill that gap. They are typically offered through nonprofit, community lenders, and have more flexible requirements than other SBA loans.
Read more about SBA microloans.
Accion
Best for business loans for minority women
Why we picked it: Accion is a nonprofit community development financial institute that provides business loans between $5,000 and $250,000 to underserved communities. Although the loan application process can be longer than some online options, Accion structures your repayment terms in a way that works best with your unique business. In addition to funding, Accion provides a resource library plus free mentoring and coaching to its borrowers.
Read our full Accion review.
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, 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
- 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.
- 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.
- 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.
- 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.
- 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.
» MORE: Business grants for Black women
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 term loan vs. line of credit, 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 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.
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.
>> MORE: Best Native-American business loans
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 April 23, 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.
Learn more
Frequently Asked Questions
Loans for minority-owned businesses can be referred to as minority business loans. The term can be used to designate lending programs that support funding for minority-owned small businesses and entrepreneurs from underserved communities.
Typically, a business is defined as minority owned when an American citizen who is at least 25% Asian-Indian, Asian-Pacific, Black, Hispanic or Native American has at least 51% ownership in the enterprise. This definition can vary based on the organization.
Minority-owned business certification is not typically required to obtain a loan, but it can be helpful in securing business opportunities with large companies or government agencies.
