Best of

Best Small-Business Loans for Minorities 2019

Steve NicastroDecember 6, 2019

At NerdWallet, we strive to help you make financial decisions with confidence. To do this, many or all of the products featured here are from our partners. However, this doesn’t influence our evaluations. Our opinions are our own.

Online lenders offer financing options for minority business owners, with looser requirements than banks.

Easily get real, personalized small business loan rates to compare -- not just ranges or estimates.

It's free and won't affect your credit.

Get Started

on Fundera's website

Our picks for

500+ personal credit score

Kabbage, Fundbox and QuarterSpot provide options for minority business owners with a minimum personal credit score of 500.

Kabbage - Line of credit

Kabbage - Line of credit

Est. APR

24.00 - 99.00%

Min. Credit Score

560

Kabbage provides fast loans for business owners with bad personal credit, but rates can be high.

Pros

  • Financing up to $250,000 available within a few days.
  • Accepts low credit scores.

Cons

  • Rates are high compared to other online lenders.
  • Must have online checking or PayPal account to verify cash flow.
  • Fixed-fee structure means early repayment does not save interest.
Read full review

Qualifications

  • Minimum credit score: 560.
  • Minimum time in business: 1 year.
  • Minimum annual revenue: $50,000.
Fundbox - Line of credit

Fundbox - Line of credit

Est. APR

10.10 - 79.80%

Min. Credit Score

500

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

Pros

  • Cash can be available by the next day.
  • Low minimum credit score requirement.

Cons

  • Rates are high compared to traditional banks.
Read full review

Qualifications

  • Minimum credit score: 500.
  • Minimum time in business: 3 months.
  • Minimum annual revenue: $50,000.
QuarterSpot - Online term loan

QuarterSpot - Online term loan

Est. APR

30.00 - 70.00%

Min. Credit Score

550

QuarterSpot's short-term business loans provide a financing option for borrowers with poor credit, but at high rates.

Pros

  • Requires low minimum credit score.
  • Cash can be available within the same day.
  • No prepayment penalty.

Cons

  • Rates are high compared to other online lenders.
  • Short loan terms.
  • Requires personal guarantee.
Read full review

Qualifications

  • Minimum credit score: 550.
  • Minimum time in business: 2 years.
  • Minimum annual revenue: $200,000.
  • Average at least 10 monthly revenue-producing deposits.
  • Minimum $2,000 average daily account balance.

Our picks for

600+ personal credit score

StreetShares, SmartBiz and Credibility Capital may provide working capital loans and expansion financing for business owners with a minimum credit score of 600.

StreetShares - Online term loan

StreetShares - Online term loan

Est. APR

8.00 - 39.99%

Min. Credit Score

600

StreetShares offers a business term loan for newer businesses that need to finance an expansion.

Pros

  • No prepayment penalty.

Cons

  • Requires weekly repayments.
  • Financing amounts limited to 20% of annual revenue.
Read full review

Qualifications

  • Minimum credit score: 600.
  • Minimum time in business: 1 year.
  • Minimum annual revenue: $25,000.
  • No bankruptcies in the past 3 years.
SmartBiz - SBA loan

SmartBiz - SBA loan

Est. APR

9.28 - 10.52%

Min. Credit Score

650

SmartBiz’s low-cost SBA loans work best for established businesses that want to finance an expansion or refinance debt.

Pros

  • Competitive rates among online lenders.
  • Faster than getting an SBA loan from a bank.

Cons

  • Must have strong financials, supported by personal and business tax returns for the past 3 years.
  • Stringent rules on use of proceeds.
  • Requires business lien and personal guarantee.
Read full review

Qualifications

  • Minimum credit score: 650.
  • Minimum time in business: 2 years.
  • Minimum annual revenue: $50,000.
  • No bankruptcies or foreclosures in the past 3 years.
Credibility Capital - Online term loan

Credibility Capital - Online term loan

Est. APR

10.00 - 25.00%

Min. Credit Score

680

Credibility Capital offers low-cost business loans that work best for small-business owners with strong credit.

Pros

  • Competitive rates among online lenders.
  • No prepayment penalty.
  • Extra monthly payments can save interest cost.

Cons

  • Short repayment term results in higher payment amounts.
  • Requires high minimum credit score and revenue.
  • Requires business lien and may require personal guarantee.
  • Not available in Nevada, North Dakota, South Dakota, or Vermont.
Read full review

Qualifications

  • Minimum credit score: 680.
  • Minimum time in business: 2 years.
  • Minimum annual revenue: $250,000.
  • No bankruptcies in the past 5 years.

Our pick for

Businesses with unpaid customer invoices

BlueVine - Invoice factoring

BlueVine - Invoice factoring

Est. APR

15.00 - 68.00%

Min. Credit Score

530

BlueVine’s invoice factoring works best for financing larger invoices, but only if your customers reliably pay on time.

Pros

  • Finances larger invoices.
  • Cash can be available within the same day.
  • Accepts low minimum credit score and short time in business.

Cons

  • Not for businesses that do not invoice on net terms.
  • Loan amount is tied to the value of your invoices.
  • Dependency on customers to pay their bills on time.
Read full review

Qualifications

  • Minimum credit score: 530.
  • Minimum time in business: 3 months.
  • Minimum annual revenue: $100,000.

Easily get real, personalized small business loan rates to compare -- not just ranges or estimates.

It's free and won't affect your credit.

Get Started

on Fundera's website

Summary of Best Small-Business Loans for Minorities 2019

LenderBest ForEst. APRMin. Credit Score
Kabbage - Line of credit

Kabbage - Line of credit

500+ personal credit score

24.00 - 99.00%

560

Fundbox - Line of credit

Fundbox - Line of credit

500+ personal credit score

10.10 - 79.80%

500

QuarterSpot - Online term loan

QuarterSpot - Online term loan

500+ personal credit score

30.00 - 70.00%

550

StreetShares - Online term loan

StreetShares - Online term loan

600+ personal credit score

8.00 - 39.99%

600

SmartBiz - SBA loan

SmartBiz - SBA loan

600+ personal credit score

9.28 - 10.52%

650

Credibility Capital - Online term loan

Credibility Capital - Online term loan

600+ personal credit score

10.00 - 25.00%

680

BlueVine - Invoice factoring

BlueVine - Invoice factoring

Businesses with unpaid customer invoices

15.00 - 68.00%

530

LenderBest ForEst. APRMin. Credit Score
Kabbage - Line of credit

Kabbage - Line of credit

500+ personal credit score

24.00 - 99.00%

560

Fundbox - Line of credit

Fundbox - Line of credit

500+ personal credit score

10.10 - 79.80%

500

QuarterSpot - Online term loan

QuarterSpot - Online term loan

500+ personal credit score

30.00 - 70.00%

550

StreetShares - Online term loan

StreetShares - Online term loan

600+ personal credit score

8.00 - 39.99%

600

SmartBiz - SBA loan

SmartBiz - SBA loan

600+ personal credit score

9.28 - 10.52%

650

Credibility Capital - Online term loan

Credibility Capital - Online term loan

600+ personal credit score

10.00 - 25.00%

680

BlueVine - Invoice factoring

BlueVine - Invoice factoring

Businesses with unpaid customer invoices

15.00 - 68.00%

530

If you have less than a year in business

Funding options are limited for small businesses that have less than one year of operating history. Lenders typically prefer established businesses with a track record and operations that produce more than enough cash flow to support loan repayments, which tends to disqualify young businesses. The good news: You still may be able to finance your startup.

If you have strong personal credit, for instance, a personal loan for business is a viable option since most personal loans are unsecured.

Business credit cards, too, offer financing for small-business owners starting out or those looking for working capital.

Calculate your loan payments

Use NerdWallet’s business loan calculator to figure out your monthly payment and total interest costs, and see loan options based on your credit score.

SBA lending resources and more

SBA Community Advantage loans: This program is for businesses, including those owned by minorities, that need $250,000 or less and are located in underserved communities. The SBA works with local, mission-based lenders to provide financing. Use the SBA Lender Match tool to find more information on SBA loan providers near you.

SBA microloans: The SBA offers microloans of up to $50,000 through nonprofit organizations. Interest rates range from 8% to 13%, and there’s a maximum repayment term of six years, according to the SBA.

The Opportunity Fund is one partner, and 90% of its borrowers are minority business owners, according to the company. There’s also LiftFund — more than 55% of its borrowers identified as Hispanic as of March 2016 — and Accion, which draws 60% of its borrowers from minority communities. Here’s a list of providers by state. Contact your local SBA district office for assistance.

CDFIs, or Community Development Financial Institutions, also provide microlending opportunities for minority business owners. The Opportunity Finance Network has a tool that can connect you with a CDFI in your state.

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

Grants: Many institutions provide grants and awards to minority-owned small businesses. Opportunities often vary drastically from state to state, but we’ve highlighted national options.

Free community resources: Many federal resources have regional or local offices, such as the Small Business Development Centers and Minority Business Development Agency offices. Visiting one near your business can help you get information on community financing, mentorship and networking opportunities.

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

National African-American Small-Business Loan Fund: The Valley Economic Development Center and JPMorgan Chase announced a small-business loan program for African-American-owned small businesses in New York City, Chicago and Los Angeles in 2015. Loan amounts range from $35,000 to $250,000, and borrowers receive financial consulting as well as technical assistance with marketing and business plan development.

Compare small-business loans

When shopping for loans, be sure to compare annual percentage rates, or APRs, which indicate the true cost of borrowing including all fees. NerdWallet’s small-business loans comparison tool can help. We gauged lender trustworthiness, market scope and user experience, among other factors.

Last updated on December 6, 2019

To recap our selections...

NerdWallet's Best Small-Business Loans for Minorities 2019