Small business loans for minorities.

Faster, easier small business financing with one simple application—no bank needed.

Applying is free and won’t impact your credit.

Reviews from minority business owners.

Closing the lending gap.

The lending gap for minority-owned businesses is real. For example, minority firms with gross receipts under $500,000 experience loan denial rates three times higher than those of their non-minority counterparts. 

But the numbers suggest that fintech lending and automation may have the power to level the playing field by eliminating the human bias that comes with manual review. Black-owned businesses, for instance, were 12 percentage points more likely to get their PPP loan from a fintech lender. 

At Lendio, we’re dedicated to closing this gap with an online application that connects minority business owners to a marketplace of lenders where they can receive equal access to business financing.

Why Lendio?

Quick & easy

It only takes 15 minutes to apply for minority business funding. Once your application has been approved, you can receive your funding amount in as little as 24 hours.*

Your partner in business financing

Have a question about small business startup loans for minorities? Need a recommendation? Just ask your funding manager. With Lendio, you get personalized support throughout the entire application and funding process for all minority business loans.

Offers tailored to your business

It’s not necessary to apply to each and every lender for a quote when you work with Lendio. Simply apply and compare rates and terms between lenders. We’ve partnered with 75+ lenders, making it easy to find the best loan for your business. If you’re ever unsure which loan you should choose, ask your funding manager for some expert guidance.

How our loan matching process works.

STEP
1

Fill out our simple application.

Answer just a few questions about your business to see which lending products you qualify for. We’ve partnered with over 75 lenders, allowing us to find the best option or your business.

STEP
2

We’ll connect you with a funding specialist.

One of our funding specialists will reach out to you to get to know your business better. Since every business is unique, we want to make sure we find the loan type that’s perfect for your needs.

STEP
3

Compare loan offers.

Compare different offers curated for your business. Select the capital amount and rate that will help take your business to the next level.

STEP
4

Get funded.

We work with lenders that can fund you fast. Once you’re approved, you’ll be able to access your capital in as little as 24 hours.

Types of business loans for minorities.

Asset- or revenue-based financing

With asset-based financing (also known as invoice factoring), a funder purchases an invoice from the borrower at a discounted rate, instead of waiting for clients to pay invoices. Then, the business pays back the funder as the business collects on the invoice. Similarly, revenue-based financing gives you an advance on expected future revenue.

TERM LENGTH

1-15 months
MAX LOAN AMOUNT

$1 million (revenue-based financing); $50 million (factoring)

Debt financing

When borrowers think of a business loan, they are likely to think of debt financing. By choosing an SBA (Small Business Administration) or term loan, borrowers receive the loan amount in one lump sum and make fixed monthly payments until the loan is paid off with interest. 

TERM LENGTH

6 months-25 years
MAX LOAN AMOUNT

$5 million

Line of credit

Minority small business loans can also be accessed through a business line of credit. A business line of credit is similar to a credit card in that it’s a type of revolving credit—as you pay off your balance, the funds once again become available.

TERM LENGTH

6-24 months
MAX LOAN AMOUNT

$250,000

SBA Community Advantage program

The SBA Community Advantage Program provides mission-oriented lenders access to 7(a) loan guarantees as high as 85% for loans up to $150,000 and guarantees up to 75% for loans greater than $150,000. These loans primarily support underserved markets, such as low-to-moderate-income communities and rural areas.

Note: This program was sunsetted in October 2023. Lenders under this program are now licensed as Community Advantage Small Business Lending Companies in the 7(a) loan program and will continue to provide access to financing to underserved communities.

TERM LENGTH

Up to 10 years for working capital loans.
Up to 25 years for real estate.
MAX LOAN AMOUNT

$350,000

SBA microloans

SBA Microloans support small businesses, offering lower loan amounts for startups or those needing a financial boost. Managed by non-profit lenders, these minority business loans are flexible and designed to meet your unique needs.

TERM LENGTH

Up to 6 years
MAX LOAN AMOUNT

$50,000
Minority women in business meeting

Where to get a business loan as a minority entrepreneur.

Exploring these options and comparing loan terms, interest rates, and eligibility criteria can help minority entrepreneurs find the right business loan to support their goals and aspirations.

  1. Banks – Traditional banks offer business loans and may have specific programs or initiatives to support minority-owned businesses. It’s worth exploring different banks and their loan offerings.
  2. Online lenders Online lending platforms provide convenient access to business loans. Some online lenders offer loans specifically designed for minority-owned businesses, with streamlined application processes and competitive interest rates.
  3. CDFIs – Community Development Financial Institutions (CDFIs) are specialized financial institutions that focus on providing financial services to underserved communities. CDFIs typically offer business loans with flexible terms and personalized support for minority entrepreneurs.
  4. Minority depository institutions – Minority depository institutions (MDIs) are banks or credit unions owned or controlled by minority individuals or communities. MDIs are committed to serving minority-owned businesses and may offer tailored loan programs to meet their specific needs.

Exploring these options and comparing loan terms, interest rates, and eligibility criteria can help minority entrepreneurs find the right business loan to support their goals and aspirations.

How to get a minority business loan: A step-by-step guide

  1. Understand your needs – Determine your business needs. What is the loan for? How much do you need and for how long? Answering these questions will help you identify the type of loan you need.
  2. Research lenders – Start your research by looking at different lenders offering minority business loans. Look at the loan terms, interest rates, and loan amounts they offer.
  3. Assess your eligibility – Each lender has its own set of eligibility criteria. These may include your credit score, business revenue, and the number of years the business has been in operation. Make sure you meet the eligibility criteria before applying.
  4. Gather relevant documents – The application process will require various documents such as business plans, financial statements, personal and business tax returns, and legal documents (such as licenses and registrations). Gather these in advance to speed up the application process.
  5. Prepare a strong application – Draft a compelling loan application. Highlight your business strengths, your plan for the loan usage, and how you intend to pay it back. If applicable, mention your minority status and how your business serves your community.
  6. Submit your application – Once you’re satisfied with your application, submit it to the selected lender. Ensure you’ve filled out all required fields and attached all necessary documents.
  7. Review loan offer – If your application is successful, you’ll receive a loan offer. Review the terms carefully, including interest rates, repayment schedule, and any additional charges or fees.

Accept and receive funds – If you’re comfortable with the loan terms, sign the agreement to finalize the loan. Once the agreement is signed, you should receive the funds within a specified timeframe.

FAQs

Let’s dive into the diverse range of loan options that are specifically tailored to support the growth and success of minority-owned businesses.

Accompany Capital Microloans

These loans provided by Accompany Capital are earmarked for immigrant, refugee, and women business owners living in NYC. The amounts can range anywhere from $1000 to $50,000.

Accion Loans

With microloans of up to $50,000, this nonprofit lender is dedicated to helping disadvantaged borrowers build their businesses up to meaningful scale. With operations worldwide, most Accion loans go to Asia, Latin America, sub-Saharan Africa, and the United States.

Business Consortium Fund

The Business Consortium Fund is a 501(c)(3) certified not-for-profit. It exclusively serves businesses certified as minority-owned, are suppliers in corporate or government supply chains, are at least three years old, and have a cash flow to debt service ratio of at least 1.25.

U.S. Bank Diversity Lending Program

U.S. Bank offers a Diversity Lending program designed specifically for businesses owned by women, veterans, and minorities. This program provides flexible financing with competitive interest rates, making it an excellent option for minority entrepreneurs seeking financial support to grow their businesses. Their range of loan options includes SBA loans, lines of credit, and equipment finance loans, all tailored to meet the unique needs of diverse-owned businesses.

Huntington’s Lift Local Business Program

Huntington’s Lift Local Business Program is designed primarily to help minority, women, and veteran-owned businesses get the financial assistance they need. Huntington offers loans from $1,000 to $150,000 with lowered underwriting standards, allowing companies to access necessary funds without the typical restrictions.

Tampa Bay Black Business Investment Corp

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

Minority and Women Business Multiplier Loan Fund

The Minority and Women Business Multiplier Loan Fund helps residents of Kansas and can provide amounts from $10,000 to $150,000.

Northern Initiatives Program

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. 

Minority Business Micro Loan Program

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

Small Business Fund

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. 

Ohio Minority Business Direct Loan Program

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.  

Indian Loan Guarantee and Insurance Program

The Indian Loan Guarantee and Insurance Program provides guarantees on loans to American Indian and Alaskan Native individuals, groups and corporations. This program is separate from the SBA loan guarantee program.

Mālama Business Loan

The Office of Hawaiian Affairs offers business loans of up to $149,999 with an APR of 4% to native Hawaiians.

There are several grants available to minority small business owners.

Grants.gov

One of the easiest places to find them is through Grants.gov—a large listing of active and upcoming grants and a great resource for any business owner having trouble getting approved for minority startup business loans. 

USDA Grant

If your business is in a rural area or an area deemed in need of economic development, you may qualify for a USDA grant. Your business must have 50 or fewer employees and make less than $1 million each year.  

National Association for the Self-Employed

If your business is new, you may qualify for a $4,000 grant through the National Association for the Self-Employed. The money can be used for any business-related expense, and there are multiple deadlines throughout the year. 

NuLeaf Project

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.

Glossier Grant

The Glossier Grant Initiative for Black-Owned Beauty Businesses offers six $50,000 grants to Black-owned beauty businesses. 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.

National Black MBA Pitch Challenge

The National Black MBA Association Scale-Up Pitch Challenge is a pitch competition that encourages its members to create scalable startups. Three 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 $7,500. In addition, the audience votes on the People’s Choice Award winner, which receives a $1,000 award.

San Diego Black Chamber of Commerce Grants

The San Diego Black Chamber of Commerce offers a grant to any business that completes one of its free business development courses.

 

The SBA has a network of Small Business Development Centers throughout the U.S. that offer both counseling and training opportunities. Even once you get funding, running a business is hard, and it can be beneficial to correspond with other business owners who have undergone similar trials.  

The Minority Business Development Agency also offers similar services. In addition to helping business owners connect with other professionals, it also helps minority entrepreneurs get small business loans. 

The National Minority Supplier Development Council acts as a network for minority business entrepreneurs to help connect them with contract opportunities and potential partners.

SCORE offers one-on-one mentoring and other free resources to small business owners. As part of the mentor selection process, business owners can request a mentor who speaks their preferred language.

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. 

Some notable VC funding options specifically designed to support and empower minority entrepreneurs include the following.

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.

The U.S. Small Business Administration runs the 8(a) Business Development Program, which is intended to “help provide a level playing field for small businesses owned by socially and economically disadvantaged people or entities.”

In a nutshell, the government plans to award at least 5% of its contracting dollars to disadvantaged businesses. Other offerings include development assistance, training, and technical guidance. Qualifying businesses must be more than 50% owned by a citizen who has experienced prejudice and is disadvantaged due to race or ethnicity.

To be certified as a minority-owned business, here’s what you need to know:

  • The business must be at least 51% owned and operated by a minority individual or individuals. These individuals must be U.S. citizens.
  • The minority owner(s) must be involved in day-to-day operations and also make long-term decisions for the company.
  • The business must be a for-profit enterprise that is physically located in the U.S. or its trust territories.
  • The minority owner(s) must have a personal net worth that does not exceed $1.32 million.
  • The business and its owner(s) must demonstrate good character and must meet creditworthiness requirements.
  • The business must show potential for success, demonstrated by two full years of operation prior to application.
  • The minority owner(s) must belong to a designated minority group. This includes, but is not limited to: African Americans, Hispanic Americans, Native Americans, Asian Pacific Americans, and Subcontinent Asian Americans. Others who can demonstrate that they’ve been subjected to racial or ethnic prejudice or cultural bias may also qualify.

Minority small business owners can get certified through the following agencies:

If your business is one that would compete for federal transportation contracts, you can also get certified through the Disadvantaged Business Enterprise program, which is run by the U.S. Department of Transportation.  

Community Advantage Program lenders are a significant resource for minority business loans. Here is a short list.

Hope Credit Union – Hope Credit Union is a community development financial institution (CDFI) with a mission of strengthening communities, building assets, and improving lives in economically distressed areas across Alabama, Arkansas, Louisiana, Mississippi, and Tennessee.

CDC Small Business Finance – CDC Small Business Finance is a not-for-profit lender providing capital to small businesses in California, Arizona, Nevada, Detroit, Michigan, or Washington, D.C. Metro.

DreamSpring – This nonprofit organization offers small business loans to entrepreneurs in Arizona, Colorado, New Mexico, Nevada, and Texas.

Justine Petersen  – Based in St. Louis, Missouri, this lender provides Community Advantage loans and other microloans to small businesses.

LiftFund – This is a non-profit organization that helps small businesses in the Southern and Western United States.

Excelsior Growth Fund – Excelsior Growth Fund is a not-for-profit Community Development Financial Institution, headquartered in New York, that believes in fostering business growth and creating job opportunities for underserved communities. They provide Community Advantage loans to small businesses in New York, helping them to grow and succeed.

8 out of 10 Lendio employees* or their families own a small business.

*based on 136 Lendio employees who responded to an internal poll

*The information contained in this page is Lendio’s opinion based on Lendio’s research, methodology, evaluation, and other factors. The information provided is accurate at the time of the initial publishing of the page (October 10, 2023). While Lendio strives to maintain this information to ensure that it is up to date, this information may be different than what you see in other contexts, including when visiting the financial information, a different service provider, or a specific product’s site. All information provided in this page is presented to you without warranty. When evaluating offers, please review the financial institution’s terms and conditions, relevant policies, contractual agreements and other applicable information. Please note that the ranges provided here are not pre-qualified offers and may be greater or less than the ranges provided based on information contained in your business financing application. Lendio may receive compensation from the financial institutions evaluated on this page in the event that you receive business financing through that financial institution.

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