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The Tale of Elusive Minority Business Loans: Where to Find Them and What It Takes to Get Them

Reviewed by Ty Crandall

November 14, 2023
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For minorities, finding business loans can feel daunting. Do minority business loans even exist?  The truth may surprise you.

Minority Business Loans are Out There, You Just Have to Know Where to Look

The United States is full of those considered to be “in the minority.” In fact, in some areas the majority of the population is considered to belong to a minority group! This is why minority business loans are more important than ever. Ensuring minority business owners have the funding they need to help their business thrive is vital to the economy.

The thing is, if you do not know where to look or what you are looking for, it can be difficult to snag one minority business loans. We are here to help you have a successful hunt.

Learn bank rating secrets with Credit Suite's free, sure-fire guide.

The Best Sources for Minority Business Loans

There really are several sources for minority business loans. It is necessary to know the specifics of each however, before you can move in for the kill. Some only offer minority business loans to those in certain cities. Some are only available if you are looking to land government contracts.

Each have their own requirements, and it takes a ton of time and research to figure it all out. We have a lot of research here to save you time. You do not have to start from scratch.  It’s important to remember however, details such as interest rates, loan requirements, and terms can change frequently. Be sure to check with the lender directly for the most up to date information.

Business Consortium Fund, Inc.

This program is designed specifically for minority businesses. It is certified by the US Department of the Treasury. Businesses can qualify for up to $500,000 after approval. Amounts above $500,000 are on a case by case basis.

Funds can be used for working capital, equipment financing, and contract financing. To apply, you have to certify your business through National Minority Supplier Development Council. Additionally, you must have a supplier relationship with the Council.


Accion offers funding in all states for minorities, veterans, women, those with disabilities, and low to medium income business owners. Loan amounts range up to $300,000. They work to help build businesses from the beginning, and can put owners in contact with other banks, non-profits, and government resources that help build a network of support.

Loan requirements for Accion vary by area.  You can enter your zip code and find out what the specific requirements are where you are located. In general, you cannot be 30 days late on credit cards, loan payments, or bills. In addition, you will not qualify if you have any late rent or mortgage payments over the past year.  Some locations have a minimum credit score requirement as well.

Community Development Financial Institutions Fund (CDFI)

This group lends to those communities that are traditionally underbanked, including business owners that are minorities. Since the Community Reinvestment Act of 1977, banks are required to offer funding in communities that find it hard to qualify for traditional funding. Big banks often fund minority business owners indirectly through their CDFI partners.

To locate a CDFI, contact the local business development center or your local Small Business Development Center office. They can hook you up.

While the application process can be lengthy, they do offer assistance to prepare for future bank loans. In addition, their rates are competitive within the U.S.

Union Bank Business Diversity Lending Program

This program from Union Bank assists minority business owners with loans and lines of credit. To qualify as a minority for this program you must be Hispanic, American Indian, Latino, Asian, Alaskan Native, African American, Native Hawaiian, or other Pacific Islander.

A business that has revenue of up to $20 million could qualify for a loan of up to $2.5 million. However, you must be in business for at least 2 years, and the minority business owner must own at least 51 percent.

Indian Affairs

Businesses owned my Native Americans can get financing from the federal government through the Indian Affairs branch. An individual can fill out an application for up to $500, 000, but business entities and tribal enterprises my apply for more.

Potential borrowers can apply with any lending institution, they just have to use the Indian Affairs application. If the funds are used for construction, renovation, or refinancing, there are additional requirements. Generally, a list of collateral, a credit report, and an analysis of business operations are required.

Camino Financial

They are an online lender that offers minority-owned businesses loans and business solutions. They process all of their lending online, which makes it easy and convenient. Their microloans range from up to $50,000. They also offer small business loans between $10,000 to $400,000.

There is no collateral requirement with Camino Financial. Also, you can pay off the loan any time with no penalties or fees. Pre-qualification happens within 24 hours, and since all documents are submitted online, you do not have to make unnecessary trips to turn in or sign papers.

Learn bank rating secrets with Credit Suite's free, sure-fire guide.

Other Options for Minority Business Loans

If you do not qualify for any of those already mentioned, or if you need more funding than what you can get with them, you may need a plan B. There are other options out there, but first you should know that traditional big banks are probably not on the list.

Why Big Banks Probably Will Not Work

Big banks are what most people think of as the first stop when it comes to getting a loan. That is true for some, but for most small business owners they are not the way to go. This is true whether they are looking for minority business loans or business loans in general.

Here’s why:

● Small businesses represent small loans with higher failure rates than larger businesses. Most are not at ease lending to companies with less than $1 million in sales.

● Big banks like collateral, and small businesses are less likely to have sufficient collateral for the loans they need. They are more likely to be leasing assets than larger businesses may own and offer as collateral.

● They also like to see a personal credit score of at least the high 600s. Many small businesses, especially those that are less than 3 years old, do not have this.

So, what are small businesses to do if they need funding? What if the specific minority business loans are not enough? Consider these other options.

Community Banks: Minority Business Loan Heroesminority business loans Credit Suite

Community banks can be a great option. They are more easily accessible to small businesses in general. They tend to have better customer service and care more about the people involved than the bottom line. Often, they are more interested in building relationships with their lenders than their big bank counterparts are.

However, their rates and terms are typically just as good as those with the larger lenders.

The downside is, as a brick and mortar financial institution they are still going to be slow. You will have to make multiple trips to the bank, and the whole process can be kind of long and drawn out.

The Small Business Administration

The Small Business Administration, or SBA, offers a number of options for minority business loans. They do not lend funds themselves, but rather work with lenders to offer security, so that they can make loans to those business owners that may be considered higher risk than what they would normally consider approving.

SBA Community Advantage loans:

Community advantage loans from the SBA are designed for businesses in underserved communities that need less than $250,000. You can find lenders that work with the SBA on this program using the SBA Lender Match tool.

SBA microloans

They also have microloans available of up to $50,000. These are offered through nonprofit organizations. With interest rates ranging from 8% to 13% and maximum repayment terms of six years, they can work well for those need minority business loans

One of the SBA’s partners in this program is The Opportunity Fund. According to them, of its borrowers, 90% are minority business owners.

SBA 8(a) business development program

If you are a small business interested in government contracts, an 8(a) certification can help. Your business must be at least 51% controlled by individuals that are “socially and economically disadvantaged.” This includes minorities, veterans, and women.

SBA 7 (a) Loans

These are not specifically for minorities, but they are available to minorities as well as everyone else. They are 10-year loans of $30,000 to $350,000. Rates range from 9.7% to 11.04%, and they can turn around in as little as seven days, though they more often take up to several weeks.

Alternative Lenders and Minority Business Loans

While not necessarily only for minorities, many alternative lenders offer loans that meet the challenges often faced by those seeking business loans. One of the greatest issues for small business owners when it comes to small business financing is credit score. The following loans are available with a lower credit score than what is typically required by traditional lenders.


There is no minimum credit score, but if you have at least $50,000 in annual revenue you can qualify for a line of credit from Fundbox. You also need to be in business for at least 3 months. Amounts range up to $100,000 with rates from 10.1% to 79.8%. Terms are for 12 weeks, and you can have your funds as quickly as the next business day.

Credibility Capital

Loans with Credibility Capital range up to $400,000. Terms are for 1,2, or 3 years, and rates range from 10% to 25%. Funding usually takes around 7 days.


SmartBiz offers low cost financing for expansion. These are SBA loans, but with SmartBiz funding happens a lot faster than with traditional banks. In fact, they can take a few weeks rather than a few months.

What frustrates you the most about how bank ratings decide if your business will get a loan? Check out how our guide can help.

Don’t Give Up on Minority Business Loans

One thing is for certain, there are a ton of options out there for minority business loans. The only catch is that not all of them will work well for every minority owned business. We have given you enough to get you started, now get moving figuring out which ones will work for you. In the meantime, start building business credit so you can fund your business using its own credit and not your personal credit.

About the author 

Faith Stewart

Faith has a BBA with a major in Accounting, and a combined 20 years of experience in the fields of finance and account.

Before switching to writing, she spent 10 years working in various areas of small business and personal finance and accounting, including working as a public auditor at BKD, LLP, Financial Director at Central Arkansas Development Council, and Commercial Credit Analyst at Farmer's Bank and Trust.

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