Black-owned businesses have seen strong growth in recent years. Nearly 195,000 employer businesses were owned by Black Americans in 2022, according to the U.S. Census Bureau’s most recent Annual Business Survey, released in 2024. That’s a 45% growth compared with Census Bureau data from three years prior.
Despite this progress, majority-Black-owned businesses represented just 3% of all U.S. companies in 2022.
“The proverbial pie would certainly grow if we continued to invest in these underappreciated companies,” Andre M. Perry, senior fellow at the Brookings Institution and author of “Black Power Scorecard,” told NerdWallet in an email.
Securing funding is a critical part of launching, sustaining and growing any businesses, but Black entrepreneurs often face unique challenges in accessing business credit. Fortunately, there are things they can do to try to unlock the financing they need.
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Look to community lenders
Banks typically offer the best interest rates and terms on business loans. But they’re not always easy to access. Many require good credit, strong business revenue and at least two years in business. On top of that, lots of big banks have moved out of majority-Black communities, creating another barrier to entry.
Smaller, community-focused lenders are filling the void.
Local banks and credit unions offer personalized support and often have more flexible qualification requirements. This is especially true if it's a community development financial institution (CDFI). CDFIs are mission-driven organizations that support underserved communities, including minority business owners.
Community lenders and CDFIs are more likely to recognize the value of local businesses, Perry says. They can also help you prepare your application.
Consider microloans for smaller funding needs
If you need $50,000 or less, microloans can be a good fit. These are specifically designed to support minority, women, veteran, and low-income business owners.
Start with SBA microloans, which are available through CDFIs and other nonprofit lenders. They typically come with competitive interest rates and flexible eligibility criteria.
See the Small Business Administration’s list of microlenders to find one near you.
Explore online lenders for fast financing
Online lenders have less strict requirements and faster approval times compared with banks. However, interest rates and fees can be high.
To avoid paying more than you have to, compare offers from multiple lenders. Working with a loan broker or using a business lending marketplace can simplify the process by showing you several financing options side by side.
Know your grant options
Grants can be a powerful source of free money, especially for new businesses. But they’re highly competitive and often require you to fill out lengthy applications.
If you don’t mind putting in the time and effort, there are several grant options tailored to Black-owned businesses:
- Fifteen Percent Pledge Achievement Award Grant.
- Pathway to Opportunity Competition.
- Scale Up Pitch Challenge.
- Black Ambition Prize.
- Wish Local Empowerment Program.
Consider crowdfunding to launch your business
Instead of borrowing from a single lender, crowdfunding lets you gather small contributions from many different people.
This not only helps you raise money, but also lets you build an audience and validate a business idea before you launch it.
Depending on the crowdfunding platform, you might have to offer special perks, rewards, or a small stake in your company. Fund Black Founders is a rewards-based crowdfunding platform designed specifically for Black entrepreneurs.
Build momentum for your campaign by including a compelling story, clear mission and engaging video.
Don’t overlook mentorship and networking
Finding a support system is important for seasoned and budding entrepreneurs alike.
Perry recommends exploring incubators, accelerators and other organizations geared toward supporting and mentoring Black entrepreneurs. These programs can help sharpen your business, boost your confidence and strengthen loan applications.
Networking is also important, Perry adds. Connecting with local Black entrepreneurs can lead to valuable referrals, peer support and new opportunities. Find fellow entrepreneurs in your area through directories like BuyBlack.org or your local Black Chamber of Commerce.
You can also check out SCORE’s “Find a Mentor” tool, join the Black Innovation Alliance or visit your nearest Small Business Development Center or Minority Business Development Agency (MBDA) for more mentorship and networking opportunities.
More tips for Black business owners
- Boost your visibility. Nearly 7 in 10 Americans (69%) say it’s important to them to support Black-owned small businesses, according to a recent NerdWallet survey conducted online by The Harris Poll. But more than half of them (52%) say they don’t know how to find Black-owned small businesses to spend money at. Listing your business on directories like BuyBlack.org can help potential customers discover and support you.
- Tap into supplier diversity programs. “Nothing beats getting in the queue of government and corporate contracts,” Perry says. Many large corporations and government agencies actively look to partner with minority-owned businesses. You can find contracting opportunities from federal agencies on SAM.gov and register your business with various corporate supplier diversity portals.
- Get certified as a minority-owned business. This can open doors to supplier diversity programs, special lending programs and more. You can apply through the National Minority Supplier Development Council (NMSDC). It can take up to 45 days to be certified, so you may want to apply sooner rather than later.
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- 1. U.S. Census Bureau. Census Bureau Releases New Data on Minority-Owned, Veteran-Owned and Women-Owned Businesses. Accessed Aug 12, 2025.
- 2. U.S. Census Bureau. Increase in Number of U.S. Black-Owned Businesses Between 2017 and 2019. Accessed Aug 12, 2025.
- 3. Pew Research Center. A look at Black-owned businesses in the U.S.. Accessed Aug 11, 2025.
- 4. The Brookings Institution. An analysis of financial institutions in Black-majority communities: Black borrowers and depositors face considerable challenges in accessing banking services. Accessed Aug 11, 2025.
