Business Loans

Guide: Roundup of Funding Resources for Biz Owners of Color

Jan 18, 2021 • 10+ min read
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      Starting, growing, and managing a business is a daunting task for anyone. However, business owners of color face particular challenges that are often related to funding. As a result, they start at a disadvantage and struggle to even keep up, much less gain a competitive advantage.    

      “New Black-owned businesses start with almost 3 times less in terms of overall capital than new white-owned businesses, and this gap does not close as firms mature,” says Jonathon Whaley, Esq, compliance officer at Wunderfund, an investment crowdfunding portal dedicated to raising capital for underserved communities.  

      “Close to 15% of Black entrepreneurs and 11.5% of Latino entrepreneurs report using a personal credit card to fund a new business or acquire an existing business, compared to a little over 9% for white and Asian entrepreneurs in the Annual Survey of Entrepreneurs.” 

      In addition, Whaley tells us that minority firm owners tend to be charged higher interest rates on bank loans than similar white borrowers. “Also, Black entrepreneurs’ loan requests are 3 times less likely to be approved than those of white entrepreneurs, and this difference persists even after accounting for credit scores and other observable characteristics.” According to a 2019 report by the New York Federal Reserve Board, only 17% of non-Hispanic nonemployer Black firms said that their funding needs were satisfied, compared with 39% of all nonemployer firms. 

      These stats underscore the need for business owners of color to find funding sources. We’ve put together a roundup of various funding options.

      Venture Capital, Crowdfunding, and Grants

      Business Owner using computer for work


      Venture Noire is one funding resource for businesses of color. “The organization is a nonprofit group whose mission is to help close the racial wealth gap by acting as a Friends-and-Family round for promising Black and minority-owned startups,” explains founder Keenan Beasley. “We provide grants that will allow them to test their product in the market and finally gain that essential proof of demand to bring to larger VC firms to encourage investment.”

      He tells us that historically, Black and minority entrepreneurs have rarely been supported by outside VC investments because they can’t show proof of demand and scalability without initial funds. “Venture Noire provides Friends-and-Family-sized grants to qualified startups to enable them to bring their service or product to the market and secure that crucial proof of demand.”

      Minority Business Development Agency (MBDA) is another source of grants for organizations that provide business consulting, procurement matching, and financial assistance to minority-owned firms. Examples of current MBDA Grant Competitions (at the time of publication) include the Enterprising Women of Color Grant Competition and the Inner City Innovation Hub Grant Competition.

      The Verizon Small Business Recovery Fund provides grants up to $10,000 to small businesses—especially those in historically underserved communities that have suffered during the pandemic. So far, 777 small businesses have received grants, and 44% have been Black-owned businesses.

      NuLeaf Project provides funding to cannabis businesses in Portland, OR, that are owned by POC. The NuLeaf Project has annual grants up to $100,000 and COVID-19 relief grants up to $15,000. In addition, NuLeaf also provides 0% interest loans for up to $15,000.

      The SoGal Black Founder Startup Grant provides $5K and $10K grants to Black women entrepreneurs with a legally registered business. Applicants must be planning to seek investor financing to scale (now or in the future), and they must have a scalable high impact solution that they believe could eventually be a billion-dollar business.

      The Glossier Grant Initiative for Black-Owned Beauty Businesses consists of $1 million divided into $500,000 in donations to organizations that fight racial injustice and $500,000 in grants to Black beauty entrepreneurs. The grants are for $10,000, $30,000, and $50,000, and the grant amounts depend on the stage of the entrepreneur’s business. Applicants need to explain how their business broadens the conversation about beauty, how the brand is different from other companies, and how the grant will help the business grow. is the clearinghouse for every type of grant you can imagine. However, doing a basic keyword search for a term like “Black businesses” and then selecting “small businesses” under eligibility will filter the grants to obtain relevant results. Since these are federal grants, the site also provides a grants learning center that explains grant policies and helps you to understand the laws and regulations for federal awards. It also explains grant eligibility, grant terminology, and other topics. In addition, there’s another section on grant writing tips that covers how to craft statements and discussions of impact.

      Paypal Empowerment Grant for Black Businesses is part of a $530 million commitment to help Black and minority-owned businesses. The $10 million fund for Black businesses impacted by the pandemic or civil unrest is managed in partnership with the Association for Enterprise Opportunity. It provides funds to cover expenses related to stabilizing the reopening of the business.

      Lowe’s Business Grants are a result of the company’s pledge to support minority and women-led businesses impacted by the pandemic. The grants will be managed by The Local Initiatives Support Corporation (LISC). In total, Lowe’s has pledged $55 million in grants.

      Business for All Grants, sponsored by The Grants Council with support from Hello Alice and Verizon, awards up to $285,000 in grants, including a grand prize of $50,000, 2 runners-up prizes of $25,000 each, and 18 other grants for $10,000 each. At least 13 of the grants will go to new majority business owners, including people of color.

      The SheaMoisture $1 Million Fund by SheaMoisture and its parent company, Sundial Brands, was created to provide funds to support women of color entrepreneurs and minority-owned businesses affected by the pandemic. The Black Business Relief Fund provides grants to top Black businesses in danger of closing, and the Unsung Businesses Fund provides grants to women of color entrepreneurs and minority business owners who have stepped up to support their communities during the recent pandemic.

      The National Black MBA Association Scale-Up Pitch Challenge is a pitch competition that encourages its members to create scalable startups. 3 finalists compete at the NBMBAA’s (virtual) annual conference and career fair to win the top prize of $50,000, a second-place prize of $10,000, or a third-place prize of $5,000. In addition, the audience votes on the People’s Choice Award winner, which receives a $1,000 award. 

      The San Diego Black Business Relief Grant Fund is another option. Black business owners in San Diego can apply for a portion of the $1 million fund, which is sponsored by the Central San Diego Black Chamber of Commerce.

      LOUD Capital is a venture capital/alternative asset management fund based in Columbus, OH. “We believe that venture capital can create a positive impact in society and we’re reaching out and funding businesses founded by people from underrepresented and underprivileged backgrounds,” says Navin Goyal, MD, cofounder and CEO of Loud Capital.   

      Color is an early-stage consumer VC fund that supports underrepresented founders. Investments include retail, e-commerce, consumer goods, and B2C-enabling tech, and the company’s portfolio is 50% POC-founded.

      Black Angel Tech Fund invests in next-generation innovators. It provides startup and early-stage capital to entrepreneurs in technology. BATF also assists founders in developing market strategies and connecting to co-investors.

      Harlem Capital Partners is a venture capital fund that was launched in Harlem in 2015 and has a goal of investing in 1,000 diverse founders over the next 20 years. Harlem Capital Partners is currently investing out of its $40m Inaugural Fund and will lead, co-lead, or participate in $250,000 to $1 million seed or Series A financings.

      Reign Ventures is an early-stage fund that invests in minorities and women. Monique Idlett-Mosley founded the company in 2017. She’s committed to building a portfolio that reflects at least 50% minority or female founders and says that women should support and invest in each other.

      Backstage Capital invests in women, POC, and LGBTQ founders in tech—and its founder, Arlan Hamilton, is the first Black queer woman to start a venture capital firm. Backstage Capital, which was launched in 2015, has invested almost $7 million in more than 150 companies that have underrepresented founders, providing seed funding that ranges from $25,000 to $100,000. Backstage Crowd is the firm’s crowdfunding platform, which allows investors to contribute up to $5,000 to diverse business owners.

      Wunderfund is an investment crowdfunding portal in Cincinnati, OH, dedicated to raising capital for underserved communities. “We leverage the power of community to help entrepreneurs and business leaders unlock their potential,” explains Jonathon Whaley, Esq, compliance officer at Wunderfund.  


      Business owner using a tablet


      Grow with Google Small Business Fund includes $45 million in loans and $5 million in grants for Black businesses, which will be administered through Community Development Financial Institutions. so they can provide loans and improve access to capital:

      The National Minority Supplier Development Council Business Consortium Fund is a 501(c)(3) certified not-for-profit. It exclusively serves businesses certified by the National Minority Supplier Development Council Business and provides loans and consulting services through its 23 affiliated regional councils. 

      Lendio is an online lending marketplace closing the funding gap for minority-owned businesses by making financing available to them. After completing one application, borrowers can choose between offers from more than 75 premier lenders and will be paired with a dedicated funding manager to help them choose the best option for their needs.

      Accion is a nonprofit organization that provides flexible and fair loans to minority entrepreneurs and business owners. The company notes that 60% of its borrowers are from minority communities, and it specifically wants to help businesses that are owned by African Americans, Hispanics, Asians, Native Americans, and other minorities.

      The Community Development Financial Institutions Fund expands economic opportunity in low-income communities through loans and competitive award programs. Funds are a combination of federal dollars and private sector capital and are used to create jobs and local businesses, as well as affordable housing. Black Business Loans are available for Florida residents through the FAMU Federal Credit Union. The company administers loans in partnership with the Department of Economic Opportunity and provides lending opportunities and technical assistance to black business owners. 

      The Tampa Bay Black Business Investment Corp provides lower interest loans of up to $50,000 to Black businesses in the Tampa Bay area.

      The Minority and Women Business Multiplier Loan Fund helps residents of Kansas. It’s available in all geographic areas and can provide amounts from $10,000 to $250,000. It will match loans up to 20% of the bank loan; however, the minimum bank loan amount is $50,000. The loans have low fixed interest rates.

       VLT Revolving Loan Fund (Video Lottery Terminal) is managed by the Baltimore Development Corporation and is available for residents of Baltimore. The funds are designed for small, minority- and women-owned businesses that are within 10 miles of an open casino site. Loan amounts range from $30,000 to $300,000.

      The Northern Initiatives Program provides funding to underserved residents in Michigan. It emphasizes a desire to provide micro and small business loans in amounts from $5,000 to $250,000 to minority- and women-owned businesses that have been negatively impacted by the coronavirus pandemic. 

      The Minority Business Micro Loan Program is administered by the Mississippi Development Authority’s Minority and Small Business Development Division and available for residents of the state. The maximum loan amount is $35,000.  

      The Small Business Administration offers various resources for POC business owners. For example, the Native American Banking Resource Directory provides access to credit resources.

      The Small Business Fund, sponsored by the New Jersey Economic Development Authority, is for creditworthy small businesses in the state that are minority-owned or women-owned. The business must have been in operation for at least a year and have no more than $3 million in total revenue. Applicants can receive up to $500,000. 

      The Ohio Minority Business Direct Loan Program, sponsored by the Ohio Development Services Agency, provides fixed low-interest loans to certified minority-owned businesses. However, the businesses must be purchasing or improving fixed assets that result in creating new jobs for fellow Ohioans.   

      The Center for the Acceleration of African-American Business operates in the St. Louis and Metro East Illinois regions and helps Black business owners to secure interest-free loans.

      About the author
      Terri Williams

      Terri Williams is a writer based in Birmingham, AL, who specializes in business, technology, education, real estate, and personal finance – and dabbles in home improvement/décor. She has bylines at The Economist, USA Today, Bankrate, Investopedia, US News & World Report, American Bar Association Journal, Verizon,, Apartment Therapy, and several other clients you’ve probably heard of. Follow her adventures @Territoryone.

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