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Best Business Loans for Minorities of 2024

By Randa Kriss
Last updated on March 25, 2024
Edited bySally Lauckner
Fact checked and reviewed

⏰ Estimated read time: 8 minutes

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

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Minority business loans offer funding for Asian-, Black-, Hispanic- and Native American-owned small businesses. 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.

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Here are 10 small-business loans for minorities

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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Fundbox - Line of credit

5.0/5

Best for Startup business loans for minorities with bad credit

$150,000600

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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4.5/5

Best for Established minority-owned businesses

$500,000660

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National Funding - Equipment Financing

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4.5/5

Best for Equipment loans for minority-owned businesses

$150,000600

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Wells Fargo Small Business Advantage® Line of Credit

5.0/5

Best for Bank business loans for minorities

$50,000680

Bank of America Cash Secured Line of credit

5.0/5

Best for First-time business loans for minorities

Undisclosed670

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

4.0/5

Best for Small-business loans for minority women

$250,000570

Here are 10 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 Startup business loans for minorities with bad credit

Fundbox

Max Amount

$150,000

Min. Credit Score

600

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 Equipment loans for minority-owned businesses

National Funding

Max Amount

$150,000

Min. Credit Score

600

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

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.

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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
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

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.

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Our pick for

Startup business loans for minorities with bad credit

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%

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

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
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.

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.

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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.

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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

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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

Borrowers who can't qualify for more traditional loan options might consider National Funding for fast access to capital.

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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.

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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
8.49-29.67%
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%

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.

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, 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.

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 September. 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.

Online lenders

Alternative 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.

Nonprofit 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.

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. For example, the Business Consortium Fund is a CDFI that provides minority business loans from $100,000 to $750,000 (or more in some cases). 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. 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.

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.

Small-business 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.

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 based in New York 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 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 Development Centers

SBA-backed Small Business Development Centers typically include regional and local offices to support startups and existing businesses. In addition to free mentoring services and low-cost training, other resources may include information on community financing, help with business plans, review of loan applications and networking opportunities.

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.

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.

SCORE

SCORE is a free volunteer program that connects entrepreneurs with seasoned business mentors who have a wealth of knowledge about business funding challenges. Although it’s not specifically geared toward minority business owners, the organization does offer resources and tools designed for Black entrepreneurs.
Last updated on March 25, 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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