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Where to Find Minority Business Loans

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Minority business loans, grants and resources are available from various sources, from the Small Business Administration (SBA) to online lenders to the Minority Business Development Agency. For any new or expanding minority-owned business, accessing capital is a critical step.

3 SBA loans for minorities

The SBA defines a minority-owned business as a firm either wholly or equally (at least 51%) owned and run on a daily basis by one or more members of four ethnic or racial groups: African Americans, Asian Americans, Hispanic Americans and Native Americans.

And while the number of minority-owned businesses is on the rise, these firms still represent a small portion of overall U.S. business ownership. A disparity in access to capital is one big reason, which is why increased access to capital is crucial. SBA loans are one popular option, due to their relatively low interest rates and flexible amounts.

SBA Community Advantage loan

The Community Advantage loan program, which is set to expire on Sept. 30, 2024, helps small business owners in underserved markets. The loans are issued by mission-focused, community-based financial institutions, including Certified Development Companies (CDCs).

Community Advantage loans are available up to $350,000, of which the SBA will guarantee at least 75%. The maximum interest rate is the prime rate (6.25%, as of October 7, 2022) plus 6.5%.

SBA (7a) loan

The SBA’s 7(a) loan is for small businesses in general, but 32% of 7(a) loans went to minority applicants in fiscal year 2019. The program provides financing that can be used to start a business, expand operations or purchase equipment or land.

The loans are disbursed by SBA-designated lenders, including Live Oak Bank and Newtek. The standard 7(a) loan is available for up to $5 million — at least 75% is guaranteed by the SBA, and the loan terms can be as long as 25 years. The interest rate can either be fixed or variable, though it can’t exceed the SBA maximum; as of October 7, 2022, that maximum is 13.50%.

SBA microloans

The SBA offers microloans of up to $50,000 to minority, women, low-income and veteran entrepreneurs and business owners. These loans can be used for working capital or to purchase equipment, supplies or other business-related items.

In fiscal year 2019, SBA intermediaries provided 5,533 microloans totaling $81.5 million. The average SBA microloan was $14,735, with an interest rate of 7.5%. The maximum repayment term is six years.

More help available: SBA 8(a) Business Development program

The SBA’s 8(a) Business Development program is designed to benefit small disadvantaged businesses, including those owned by minorities. The federal government aims yearly to award 5% of federal contract dollars to businesses that are at least 51% owned and operated by economically or socially disadvantaged U.S. citizens.

To qualify, businesses must be 8(a) certified. Once approved, the designation lasts for up to nine years depending on your business’s standing. Qualified applicants can access business counseling and technical support, as well as bid on government contracts as a sole source or as part of a joint venture.

4 online business loans for minorities

While the following small business loans aren’t only for minority borrowers, it shows a sampling of what’s available.


Credibly offers working capital loans, business expansion loans and merchant cash advances to small businesses. Borrowers could receive funding the same day they’re approved.

  • Working capital loans are available for up to $400,000 with terms of 3 to 15 months. Repayment options are either daily or weekly. Credibly uses factor rates with its working capital loans, and those rates are as low as 1.15, as of Feb. 18, 2020. So if you borrowed a $10,000 loan with a factor rate of 1.15, you’d owe $11,150 total.
  • Business expansion loans are limited to $250,000 with terms of 18 to 24 months. Repayments are made weekly, and interest rates start at 9.99%.
  • Merchant cash advances are available for up to $400,000 with an anticipated payback period of 3 to 18 months. Payments are automatically deducted from future sales. As with working capital loans, factor rates are as low as 1.15.

Credibly’s working capital loans and business expansion loans come with a 2.50% origination fee, while its merchant cash advances come with a 2.50% underwriting fee and $50 monthly administration fee.


Kabbage provides small business owners with ongoing lines of credit up to $250,000. Once you’ve been approved, you don’t have to withdraw money until you need it, and you won’t be charged until you do. Loan terms of 6, 12 and 18 months are available, though you must borrow at least $500 if you choose a six-month term (higher for 12- and 18-month terms).

These lines of credit come with flat monthly fees based on a percentage of 2.00% to 27.00%. Around the middle of your term, that fee drops to 1.25%. Each month, borrowers pay back an equal portion of the loan principal, plus the monthly fee.


OnDeck offers term loans and lines of credit.

  • Term loans range from $5,000 to $250,000 with terms of 3 to 24 months. Repayment options are either daily or weekly. APRs start at 29.90%, though the average APR for OnDeck term loans is 62.1%, based on loans originated in the half-year ending March 31, 2022.
  • Lines of credit are available for $6,000 to $100,000 with a term of 12 months; repayment is required weekly. APRs start at 29.90%, though the average APR for OnDeck lines of credit is 48.9%, based on loans originated in the half-year ending March 31, 2022.

Same-day funding is available with both options — and you could even receive your line of credit funding in seconds.

Uplyft Capital

Uplyft Capital provides small business loans of $8,000 to $500,000, with terms ranging from 2 to 12 months and factor rates between 1.24 and 1.40, as of Feb. 18, 2020, depending on your level of borrowing:

  • Starter loans are for $8,000 to $30,000 over 2 to 5 months, with a factor rate of 1.40.
  • Standard loans are for $5,000 to $125,000 over 2 to 7 months, with a factor rate of 1.34.
  • Premier loans are for $10,000 to $250,000 over 3 to 8 months, with a factor rate of 1.30.
  • Premier Plus loans are for $30,000 to $500,000 over 3 to 12 months, with a factor rate of 1.24.

Uplyft uses artificial intelligence to analyze applicants and provide faster decisions.

Can you find minority business loans for bad credit?

It may be difficult to find small business loans for minorities with bad credit, but it certainly isn’t impossible. There are lenders — especially alternative online lenders — that will provide funding to borrowers with bad credit.

Some options to consider include accounts receivable financing and merchant cash advances, which can be accessible to borrowers who aren’t able to obtain loans elsewhere.

4 small business grants for minorities

Federal grants

Federal grants — many of which are available to minority-owned businesses — are listed on These opportunities are very specific, and few, if any, will be right for a given business, but it’s useful to keep an eye on your options.

The grants are sponsored by a number of federal agencies, including the Department of Agriculture, Department of the Interior, Environmental Protection Agency and NASA.

One notable entry is the Rural Business Development Grants from the Department of Agriculture. These grants are large (generally $10,000 to $500,000) and are open to businesses operating in rural regions or areas outside of cities with a population of less than 50,000 residents.

New Voices Fund

New Voices Fund is a $100 million fund that invests in women-of-color entrepreneurs. The associated New Voices Foundation provides recoverable grants, or forgivable loans, to businesses that aren’t ready to receive equity funding or other kinds of investment.

National Association for the Self-Employed Growth Grants

Entrepreneurs, including minority business owners, who are members of the National Association for the Self-Employed (NASE) can apply for grants of up to $4,000 to help with a specific business need, such as buying equipment, hiring staff or creating marketing materials.

Applicants must have been an NASE member for three months before applying.

FedEx Small Business Grant Contest

Minority and small business owners can enter the FedEx Small Business Grant Contest to be in the running for up to $50,000. The application requires you to create a video about your business. After, you would need to find supporters for an online competition.

Beyond the $50,000 grand prize (which also includes $7,500 in FedEx printing and business services), there’s a $30,000 second-place prize and 10 $15,000 third-place prizes.

4 small business resources for minorities

Minority Business Development Agency

As its name suggests, the Minority Business Development Agency (MBDA) — part of the U.S. Department of Commerce — works to promote the growth of minority-owned businesses. Business owners can get advice from experts at MBDA Business Centers nationwide, including on the topic of how to find capital. The MBDA also advocates for the interests of minority-owned businesses, and administers public and private sector programs.

National Minority Supplier Development Council

The National Minority Supplier Development Council (NMSDC) is focused on boosting minority-owned suppliers’ opportunity and access to markets. From its national office in New York City and 23 affiliate regional councils nationwide, MNSDC helps its 1,450 corporate members integrate into supply chains, access programming and educational opportunities and network with others in their fields.


The Service Corps of Retired Executives (SCORE) is a useful source of free business mentoring and education for minority-owned and non-minority-owned businesses alike. A resource partner of the SBA, SCORE has offered mentoring, workshops and educational resources for more than 50 years via 10,000-plus volunteers in 300 chapters across the U.S. The organization offers webinars and courses specific to minority-owned businesses, including options in Spanish.

Small Business Development Centers

The Office of Small Business Development Centers (SBDC), part of the SBA, makes a special effort to reach minority members of socially and economically disadvantaged groups. It is dedicated to supporting entrepreneurship, small business development and the U.S. economy, generally through funding and overseeing a nationwide network of development centers.


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