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Updated February 21, 2022 – Minorities in the United States, defined as anyone who is Asian, Black, Hispanic, or Native American, own as many as 11.1 million small businesses.  And that number is growing fast, up 79 percent between 2007 and 2017.

However, due to systemic and cultural struggles, minorities typically have a more difficult time finding small business loans compared to the majority population. There is not yet equal access and opportunities.

According to the data, minorities are more likely to have lower credit scores, and to experience discrimination when applying for loans. Fortunately, things are improving steadily, and the barriers to entry are being methodically torn down.

In the meantime, what are the best ways for minorities to apply for small business funding? What programs are available?  And what are the options that are exclusive to minority communities?

Small Business Loans for Minorities: Growing Opportunities & Funding Options

African American female business owner holding an open sign

A report titled “Access to Capital among Young Firms, Minority-Owned Firms, Women-Owned Firms, and High Tech Firms”, was commissioned by the Small Business Administration (SBA). According to the report, when it comes to traditional bank loans, “the minority group made up of Black and Hispanic business owners was significantly less likely to have their loan applications approved, compared with their White counterparts.”

Consequently, the SBA has put into place programs to make this path a little easier and to reduce the systemic discrimination against these groups.

These loans are:

SBA 7(a) loans:

Although these loans are not restricted to minorities, 26% of all SBA 7a loans have been given to minorities (as of 2017). These loans range from $30,000 to $5,000,000.


  • Annual gross revenue of $120,000
  • A minimum credit score of 680

SBA 8(a) loans:

Each year the SBA 8(a) Business Development Program’s goal is to award at least 5% of federal contracting dollars to small and disadvantaged businesses.


  • 51% of the business must be owned by U.S. citizens who are socially and economically disadvantaged.

SBA Microloan Program:

In addition to large loans that help minorities and the disadvantaged, the SBA offers a type of micro loan.  This type of loan is designed to help a very small business to overcome a hurdles such as buying an important piece of equipment.

These loans are for less than $50,000, with interest rates between 8%-13% and have a maximum repayment period of less than six years.

SBA Community Advantage loans:

This program is for businesses in undeserved communities that need less than $250,000. These loans are similar in many ways to the SBA 7(a) loans.

Nonprofit Loans:

These loans, as the name suggests, are provided by nonprofit organizations and are designed to help low-to moderate income business owners. Requirements vary depending on the specific nonprofit organization.

Business Center for New Americans:

The BCNA gives micro loans between $500 – $50,000 to minority business owners in the U.S., working specifically with immigrants, refugees, women and other minority entrepreneurs. These loans are short term, to be paid off within 6 months to 3 years, and typically have low fixed interest rates.

USDA Loans:

The US Department of Agriculture Business and Industry Loan Guarantee Program guarantees these loans through banks and online lenders. The main requirement is that your business needs to be in a rural area. These are a good option for minorities, as historically minorities in rural areas tend to live in substandard housing and are more likely to live in poverty.

Where to Find Small Business Loans for Minorities

Group of 3 African-American Entrepreneurs

With all of these loan options listed above, the next question is how you go about applying for one of these small business loans for minorities. The good news is that you can work with most any lender on these loans.  They know the specific requirements of SBA loans and can work with the USDA loans that are guaranteed by the government.

SBA Loans have been referred to as the “gold standard” of loan options for small business owners since they are partially guaranteed by the government.

While an SBA Loan may have stricter application requirements than a different type of loan, the programs listed above are programs that are designed specifically to benefit the minority populations.

The timing for the various SBA Loan programs varies, but pre-qualification can take place in minutes.  Assuming you pass initial requirements (specific to the above programs) and secure a pre-approval, funding could take place in as little as four week.

While Small Business Funding doesn’t offer all the SBA Loan programs, we do have an SBA Working Capital Loan that you can apply for today.

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Although these initial requirements differ depending on the program, the SBA Working Capital Loan with Small Business Funding requires the following:

  • You need to have been in business for two or more years, verified through two or more tax returns
  • Have a minimum FICO score of 650
  • Supply business financial statements such as a Profit and Loss, Balance Sheet, and other necessary documents specific to the program

Lending Programs for Minority Business Owners

Asian-American woman entrepreneur

Other programs that offer lending to minority business owners include the following:

Business Center for New Americans:

As mentioned above, the BCNA works specifically with immigrants, women and other minority business owners. They provide small businesses with micro loans to people who would not typically qualify due to business history and poor credit.

Minority and Women Revolving Loan Trust Fund Program:

For minorities in New York, this program was created to offer low-cost financial assistance to businesses that are owned by the disadvantaged. The program offers fixed asset loans up to $50,000 and working capital advances up to $35,000.

Union Bank’s Business Diversity Lending Program:

Union Bank offers minority small business loans to business owners who have annual sales less than $20 million, who are borrowing less than $2.5 million.

Business Consortium Fund loan:

The BCF loan program is available to businesses certified by the National Minority Supplier Development Council. The program gives lines of credit, term loans, and working capital loans up to $500,000.

Other Resources for Minority Small Businesses

Minority Business Development Agency:

The MBDA is a part of the Department of Commerce and helps minorities who wish to become entrepreneurs. The agency doesn’t give loans or grants.  But it does provide access and help in applying for grant funding programs funded by angel investors.

Operation HOPE Small Business Development Program:

HOPE’s program is a training program for aspiring entrepreneurs. They help minorities gain knowledge and skills to navigate small business ownership and funding challenges.

First Nations Development Institute Grant:

First Nations has a grant-making program for Native American, Alaska Native, and Native Hawaiian communities which provides financial and technical resources.

National Minority Business Council:

The NMBC provides assistance to business enterprises owned by minorities and women.

Other Funding Options for Minority Business Owners

African-American female owner of construction company

As you can see, the number of funding opportunities for minority-owned businesses is expanding.  In additional to the grants, trusts, and lending options stated above, there is also other funding options with Small Business Funding.

We are proud to provide business funding options for minority owned business leaders. Helping you secure capital needed to continue to grow your business.

Since we put more emphasize on your business performance and your ability to repay an advance of capital, funding tends to be easier compared to a traditional bank.  However the stronger your credit score, the more options available to you.

There are specific requirements you and your business will need to meet.  Those minimum requirements will vary based on the type of funding you may qualify for.

In addition to the SBA Working Capital Loan, here are some other funding options: