Best Business Loans for Minorities 2024
BEST FOR SHORT-TERM LOANS
OnDeck
Editor’s Take
We picked OnDeck for its variety of business lending products and same-day funding. OnDeck offers a term loan from $5,000 to $250,000 with repayments terms of up to 24 months. You can also access a credit limit of $6,000 to $100,000 through its line of credit with a 12-month repayment term that resets after each withdrawal.
Pros & Cons
Term loans from $5,000 to $250,000
Lines of credit from $6,000 to $100,000
Same-day funding
Low minimum credit score requirement
$100,000 minimum annual revenue requirement
Must have been operating for at least one year
Does not lend to businesses in North Dakota
Details
Eligibility
Minimum credit score: 625
Time in business: One year
Minimum revenue: $100,000 per year
Turnaround time
You can apply and receive a decision from OnDeck on the same day.
OnDeck has carved a niche in the realm of alternative lending, offering expedited access to capital for businesses that may not qualify for traditional bank loans. Its big advantage is the availability of funds on the same day or next while not being affected by a hard credit pull. However, this aggressive lending practice also comes at a steep price.
— Abid Salahi, co-founder and CTO, FinlyWealth
BEST FOR A LENDER COMPARISON SITE
Lendio
Editor’s Take
Lendio is an online business loan marketplace that connects prospective borrowers with traditional banks and nonbank online lenders. By filling out one application, business owners are able to connect to over 75 lenders. Over its existence, Lendio has helped small business owners receive over $12 billion in funding nationwide.
Applicants may see Lendio as a one-stop shop. You can apply for business loans, lines of credit, SBA loans, equipment financing, merchant cash advances (MCAs), commercial mortgages, invoice factoring and business acquisition loans. However, because Lendio is a marketplace and not a lender, it doesn’t publish specific terms. Instead, you’ll have access to its lending partners, and it will help you find the best offer for your specific needs.
Pros & Cons
One application connects you to more than 75 lenders
Wide variety of loan products, including term loans, lines of credit and SBA loans
Some lenders charge prepayment penalties
Terms and funding times vary depending on specific lender
Details
Overview
Lendio is an online business loan marketplace that connects prospective borrowers with traditional banks and nonbank online lenders. Over its existence, Lendio has helped small business owners receive over $12 billion in funding nationwide.
Applicants may see Lendio as a one-stop shop. You can apply for business loans, lines of credit, SBA loans, equipment financing, merchant cash advances (MCAs), commercial mortgages, invoice factoring and business acquisition loans. However, because Lendio is a marketplace and not a lender, it doesn’t publish specific terms. Instead, you’ll have access to its lending partners while helping you find the best offer for your needs.
Eligibility
Minimum Credit Score: 560
Time in Business: Six Months
Minimum Annual Revenue: $50,000
Funding time
Applying through Lendio takes 15 minutes. After you review your offers and are approved by your lender, you can receive your funds in as little as 24 hours.
BEST FOR FLEXIBLE LINES OF CREDIT
Bluevine
APR range
Simple interest starts at 5.9% or 7.8%
Simple interest starts at 5.9% or 7.8%
Editor’s Take
Bluevine is a financial technology company that provides financing solutions to small businesses nationwide. It specializes in business lines of credit and checking accounts. As of December 2021, Bluevine no longer offers invoice factoring as one of its financing methods.
Small business owners looking to access a line of credit on an as-needed basis can receive funds from $5,000 to $250,000. Bluevine offers two payment structures: Flex 6 or Flex 12. Customers who choose Flex 6 make weekly payments over 26 weeks while Flex 12 customers make monthly payments over 12 months. What’s more, after 45 days of payment on Flex 6, or 90 days of payment on Flex 12, you may be eligible for a credit line increase.
Bluevine also charges weekly or monthly fees for its line of credit. Standard pricing is 1.7% per week or 7% per month for line of credit draws.
Note: Bluevine’s line of credit is available in most U.S. states except Nevada, North Dakota, South Dakota, Puerto Rico and other U.S. territories.
Pros & Cons
Receive a decision within five minutes and instant funding with a Bluevine business checking account, or receive funds within 24 hours
Lines of credit up to $250,000
Low credit score requirement
No mobile app for its line of credit
Monthly revenue requirement
Not available to businesses in Nevada, North Dakota, South Dakota, Puerto Rico and other U.S. territories
Details
Eligibility
Eligibility varies on the specific program a business owner chooses.
Weekly plan
Minimum credit score: 625
Time in business: Two years
Minimum revenue: $40,000 monthly or $480,000 annually
Business type: Corporation or LLC
Bankruptcies: No past bankruptcies
Monthly plan
Minimum credit score: 650
Time in business: Three years
Minimum revenue: $80,000 per month or $960,000 annually
Business type: Corporation or LLC
Turnaround time
After you submit your application, you can receive a decision in as quickly as five minutes and instant funding with a Bluevine business checking account. Borrowers who don’t have a Bluevine business checking account can receive funds within 24 hours.
Bluevine appeared in a search we did for clients during the mini-banking crisis of 2023. Bluevine offers a bank sweep program that will provide FDIC insurance to their clients for up to $3 Million. FDIC insurance usually doesn’t matter, but when banks start failing, it really matters.
— Herman Thompson, Jr., advisory board member
BEST FOR SMALL- TO MID-SIZED MINORITY-OWNED BUSINESSES
National Funding
Editor’s Take
National Funding offers working capital small business loans from $5,000 to $500,000 with terms of four months to two years, paid daily or weekly. Borrowers can use their funds for all working capital needs, including inventory, payroll, marketing, taxes and more. National Funding also offers equipment financing up to $150,000 but applicants must have a minimum personal credit score of 575 to qualify for that financing method.
Unlike most business lenders, National Funding offers early payoff discounts. Small business loan customers who repay their total remaining balance in full within the first 100 days of the contract will automatically receive a 7% discount off the total remaining balance. Equipment financing customers who repay the total remaining balance early, at any point during the term, will automatically receive a 6% discount off the total remaining balance.
Pros & Cons
Financing up to $500,000
Early payoff discounts
Most loans are funded within 24 hours of approval
Requires daily or weekly payments
Potentially high borrowing costs
Requires minimum gross annual sales of $250,000
Details
Eligibility
Minimum credit score: 600 (575 for equipment financing)
Time in business: Six months
Minimum sales: $250,000 per year
Turnaround time
Most loans are funded within 24 hours of approval, subject to receipt of required documentation, underwriting guidelines and processing time by your bank.
National Funding offers loans from $5,000 to $500,000, but two years is the maximum length for a large loan. I had a client that got excited by what he thought would be a lending source that could do $500k for five years, but the five-year loan was only offered at $100,000. A local banker made a collateralized loan for the large equipment purchase, and the client took a small short-term loan from National Funding to help with cash flow during a tough spot.
— Herman Thompson, Jr., advisory board member
BEST FOR SMALL AND LARGE LINES OF CREDIT
American Express® Business Line of Credit
Minimum Credit Score
660 FICO at the time of application
660 FICO at the time of application
Editor’s Take
American Express Business Blueprint™ is best for its American Express® Business Line of Credit (formerly Kabbage from American Express and Kabbage Funding™), which gives business owners the chance to secure funding between $2,000 to $250,000. Repayment terms include six, 12, 18 and 24 months.
Line of credit customers incur a loan fee for each month they have an outstanding balance. Total monthly fees incurred over the loan term range from 3% to 9% for six-month loans, 6% to 18% for 12-month loans, 9% to 27% for 18-month loans and 12% to 18% for 24-month loans.
In addition to its line of credit, American Express Business Blueprint provides other tools beneficial to small business owners, including its own mobile app that provides comprehensive cash flow insights. All businesses are unique and are subject to approval and review.
Pros & Cons
No prepayment penalty
Four different repayment options
Offers small to large lines of credit
Monthly fees on unpaid balances
Requires personal guarantee
Lines of credit over $150,000 are only available to borrowers who meet additional criteria
Details
Eligibility
Minimum credit score: 660 FICO at the time of application
Time in business: At least one year
Minimum revenue: At least $3,000 monthly
All businesses are unique and are subject to approval and review. The required FICO score may be higher based on your relationship with American Express, credit history and other factors.
Turnaround time
Once application is approved, funds can take up to three business days to appear in your account, depending on your bank.
The American Express® Business Line of Credit allows you to qualify at a credit score of 660 FICO at the time of application*, so it’s not a great option for any business with a bad credit rating.
Rather than a typical revolving line of credit, you must choose [from available terms] with varying fees. Every time you withdraw from your business line of credit, it’s treated as a separate installment loan rather than being added to existing loans.
One downside to the American Express® Business Line of Credit is the time it takes to receive your cash. You’ll need to wait for your funds to be deposited within three business days, while other lenders offer same-day options. If you need your cash fast, that delay becomes a problem.
— Jonathan Feniak, general counsel and head of finance, LLC Attorney
BEST FOR QUICK APPROVALS
Fundbox
APR range
Interest rates start at 4.66%
Interest rates start at 4.66%
Editor’s Take
Fundbox is an AI-powered business lending platform that speeds up the application, decision-making and funding process. It offers decisions within three minutes and funds as soon as the next business day.
Prospective borrowers have two business financing options through Fundbox. Business owners can apply for revolving business lines of credit up to $150,000 with repayment terms of 12 or 24 weeks. Your available credit goes back up as you repay your line of credit.
Pros & Cons
No prepayment penalty
Low minimum annual revenue requirement
Next-business-day funding
Only short-term repayment terms are available
Does not disclose APRs
Details
Eligibility
Minimum credit score: 600
Time in business: Six months
Minimum revenue: $100,000 per year
Turnaround time
With a business line of credit from Fundbox, you can receive your funds as soon as the next business day.
The approval process is quick and Fundbox is available for the credit-challenged business. Credit approvals are usually small, so this [typically] isn’t an option for larger purchases. I had a small business client that had Fundbox integrated with her Stripe dashboard, which made it convenient.
— Herman Thompson, Jr., advisory board member
BEST FOR ESTABLISHED MINORITY-OWNED BUSINESSES
Funding Circle
Learn More
From participating partners via businessloans.com’s website.
Editor’s Take
Funding Circle has been a direct lender specializing in small business loans since 2010. It has helped 135,000 businesses in 700 industries and lent $20.2 billion globally. We chose Funding Circle because it provides fast, affordable loans with a simple application process and funding in as little as 48 hours. Prospective borrowers have three options: business term loan, line of credit or SBA loan.
Funding Circle term loans range from $25,000 to $500,000 with repayment terms from six months to five years. If you choose to apply for a business line of credit, you can access credit lines between $6,000 and $100,000. However, Funding Circle doesn’t specify its line of credit repayment terms. You can also apply for Funding Circle SBA loans, which range from $25,000 to $500,000 with terms up to 10 years.
There is one main drawback of Funding Circle: There’s a one-time origination fee on each loan ranging from 3.49% to 6.99% of the approved loan amount.
Pros & Cons
Loans from $25,000 to $500,000
Funding in as little as 48 hours
No minimum annual revenue requirement for most loans
One-time origination fee between 3.49% to 6.99% of the approved loan amount
Requires two years in business, so it’s not ideal for startups
Not available to Nevada businesses
Details
Eligibility
Minimum credit score: 660 for most loans; 650 for SBA loans
Time in business: Two years
Minimum revenue: None for most loans; $400,000 per year for SBA loans
Turnaround time
Depending on the loan type, you can receive your funds within two days. However, SBA loan funding may take up to two weeks.
Funding Circle provides long-term loans that are essential for businesses planning significant investments in growth or infrastructure. The clear terms and lower interest rates compared to short-term loans make this an excellent choice for businesses with a stable financial outlook and a strategic long-term development plan.
— Cache Merrill, founder and CTO, Zibtek
BEST FOR FUNDING OPTIONS
Biz2Credit
Loan amounts
Up to $1M+
Revenue-based financing. Varies depending on product and qualifications
Minimum Credit Score
650*
*See website for details
Up to $1M+
Revenue-based financing. Varies depending on product and qualifications
650*
*See website for details
Editor’s Take
Biz2Credit is a digital funding platform that provides three funding options—term, revenue-based financing and commercial real estate (CRE) loans—ranging from Up to $1M+. It only takes a few minutes to apply.
Biz2Credit can connect business owners with revenue-based financing Up to $2M+ and term loans Up to $1M+. Revenue-based financing payments are flexible based on business performance, with a right to reconcile against actual business receipts while term loans are repaid through weekly, bimonthly or monthly payments over the course of 12 to 36 months. Biz2Credit also offers interest-only CRE loans from Up to $2M+ with terms between 12 and 36 months; payments are due monthly.
In the event that Biz2Credit cannot provide a financial product, it may present third-party options to qualified prospective borrowers. However, Biz2Credit confirms that “in the vast majority of cases, [it] will make a financing decision without referral to any external party.”
Pros & Cons
Revenue-based financing has flexible qualification requirements
Can pre-qualify for submitting an application
Offers term loans with weekly or biweekly payments
Does not disclose financing costs
Does not disclose turnaround time
High annual revenue requirement
Details
Eligibility
Eligibility varies based on the financing option you choose.
Term loan
Minimum credit score: 650
Time in business: 18 months
Minimum revenue: $250,000 per year
Revenue-based financing
Minimum credit score: 575
Time in business: 6 months
Minimum revenue: $10,000 per year
Turnaround time
Biz2Credit does not disclose the turnaround time for its financing options.
Similar to Funding Circle, Biz2Credit emerges as a more balanced alternative and functions as a platform to offer a wide range of loans. Due to the more thorough underwriting process, the qualification requirements are more restrictive than other business lenders and funding may not be as quick.
— Abid Salahi, co-founder and CTO, FinlyWealth
Summary: Best Business Loans for Minorities
Methodology
We reviewed 26 popular lenders based on 16 data points in the categories of loan details, loan costs, eligibility and accessibility, customer experience and the application process. We chose the best lenders based on the weighting assigned to each category:
Loan cost: 35%
Loan details: 25%
Customer experience: 20%
Eligibility and accessibility: 10%
Application process: 10%
Within each major category, we also considered several characteristics, including available loan amounts, repayment terms and applicable fees. We also looked at minimum credit score and time in business requirements and the geographic availability of the lender. Finally, we evaluated each provider’s customer support tools, borrower perks and features that simplify the borrowing process—like online applications, prequalification options and mobile apps.
Where appropriate, we awarded partial points depending on how well a lender met each criterion.
To learn more about how Forbes Advisor rates lenders, and our editorial process, check out our Loans Rating & Review Methodology.
Tips to Compare Business Loans for Minorities
Consider these tips when comparing business loans for minorities:
Look for lenders that specifically offer loans to minorities. As a minority-owned business, you may face unique challenges when it comes to securing financing. Choose a lender that understands your financing needs, prioritizes your business and understands the importance of your business to the community as a whole.
Get multiple quotes. Don’t just go with the first lender you see. Compare terms, interest rates, fees and other loan features from several lenders to find the best fit for your business and the most competitive rates. Also, look at the annual percentage rate (APR) to get a true cost comparison that includes the interest rate plus fees.
Consider the type of loan that best suits your business needs. There are many different types of small business loans available, and some options may suit your business needs better than others. If you need to finance a long-term venture, a line of credit may be a better choice. A loan, on the other hand, can help you cover upfront costs.
Be prepared to provide collateral. Many lenders require some form of collateral to secure a business loan, such as real estate, equipment or even a personal guarantee. Compare offers from online and traditional lenders to find an unsecured option or a secured loan that aligns with your business’ available assets.
Make sure you can afford the monthly payments. Before taking out a loan, always use a loan calculator to make sure you can afford the monthly payments. While taking out a loan may seem like the only way to finance your business, high monthly payments can ultimately put your business at risk.
Be aware of scams. Beware of scammers who promise loans with low interest rates and no fees. These offers are often too good to be true and can end up costing you more in the long run. Likewise, avoid lenders who charge fees upfront.
What Is a Minority-owned Business?
A minority-owned business is any business that is at least 51% owned by one or more ethnic minorities. This typically includes businesses with owners who are Black, Hispanic, Asian-Pacific, Asian-Indian Subcontinent, Native American or Alaskan Native. To qualify for some loans, it may be necessary to provide a certification confirming that a business is minority-owned.
Minority-owned businesses often face increased challenges when it comes to securing financing—especially from more traditional lenders. However, there are many lenders and government programs that specifically offer loans and grants to minority-owned businesses.
Where to Get a Business Loan for a Minority-owned Business
Many lenders offer loans specifically for minority-owned businesses. These lenders typically have programs that offer lower interest rates, more flexible terms or more accessible qualification requirements.
Online Lenders
Online lenders often have less stringent requirements than traditional banks and can provide funding more quickly. What’s more, minority-owned businesses often experience higher approval rates from online lenders than from traditional banks. Loan amounts can vary anywhere from $1,000 to $500,000, with interest rates typically extending up to 99%.
SBA Lenders
Loans backed by the U.S. Small Business Administration (SBA) can help minority-owned businesses get the financing they need through the agency’s network of approved lenders. For example, the SBA’s Community Advantage loan program is tailored to businesses in underserved markets. Loans are available for up to $350,000, with rates from 4.5% to 6.5% above the prime rate.
Community Development Financial Institutions
Community development financial institutions—or CDFIs—are private financial institutions that provide banking and investment services in traditionally underserved communities. Loans may be available for minority-owned businesses through a community development loan fund (CDLF) or community development venture capital (CVDC) funds. Find a local CDFI by searching the CDFI Fund’s searchable awards database.
Local Banks and Credit Unions
Minority-owned businesses often face increased difficulty getting approved for loans through traditional banks. However, business owners who have an existing relationship with a local bank or credit union may be able to access competitive rates and flexible loan terms for their business borrowing needs.
Microlenders
Eligible small businesses can obtain loans up to $50,000 as part of the SBA Microloan program. Not only are microloans limited to smaller amounts, but they also have shorter repayment terms than traditional loans—up to six years. Interest rates ultimately vary by SBA-approved lender but range from 8% to 13%.
Microloans are available through a network of intermediary lenders, but the SBA provides a list of lenders so prospective borrowers can search by state. A number of nonprofit organizations aimed at helping minority-owned businesses succeed also offer this type of business financing.
Peer-to-peer Lenders
Peer-to-peer lending—also referred to as P2P lending—involves borrowing money from individuals instead of banks or other financial institutions. This type of business loan typically features less rigorous lending requirements and a more streamlined and accessible application process.
Loan amounts and interest rates may be more competitive than available through a bank or credit union, but some private lenders charge substantial fees in exchange for this convenience.
How to Get a Business Loan for a Minority-owned Business
If you’re a minority business owner, there are a number of financing options available, including loans and business lines of credit. The application process varies depending on the lender, loan program and type of funding. In general, though, there are common steps to follow when getting a small business loan for a minority-owned business.
Check your credit score. Before starting the loan application process, look up your personal credit score and, if applicable, your business’ score. Credit score requirements vary by lender, but the SBA generally requires a minimum score of around 640. Checking your score early in the loan application process can help you identify lenders that are likely to approve your application—or give you a chance to improve your credit profile before applying.
Evaluate your needs. Determine how much your business needs to borrow and what the loan funds will be used for. Some lenders place restrictions on how loan proceeds can be used, so understanding your needs will help you identify an appropriate lender. You can also use this opportunity to evaluate how much the business can afford in loan payments each month.
Compare lenders and determine if you’ll qualify. Loan programs typically have specific requirements, such as minimum revenue or time in business. For example, new businesses must often choose from startup business loans with less restrictive requirements. Loans for minority-owned businesses impose additional eligibility requirements that vary widely between lenders. Also, consider factors like loan amounts, interest rates, repayment terms and fees before consenting to a hard credit check.
Gather the necessary documents. Once you choose a lender, review its application requirements and compile all of the requested documents and information. This often includes personal and business tax returns, bank statements and other financial documents that demonstrate the business’ ability to repay the loan.
Submit an application. Finally, submit a loan application online or, where applicable, at a brick-and-mortar location. If possible, track your status through the lender’s online dashboard or keep an eye on your email. The process varies by institution, but most lenders contact applicants via phone or email if they require additional documentation.
Find the Best Small Business Loans of 2024
Other Resources for Minority-owned Businesses
There are a number of resources available to minority-owned businesses, including government grants, training programs and business-focused nonprofit organizations. Here are some of the best options to get started:
SBA 8(a) business development program. The SBA’s 8(a) business development program is specifically tailored to socially and economically disadvantaged business owners and some minority-owned businesses. The program provides a number of resources and assistance to help businesses grow operations.
Minority Business Development Agency (MBDA). The MBDA is a federal agency that provides assistance to minority-owned businesses. It can help business owners with everything from starting a business to accessing capital. Visit the agency’s list of MBDA Centers to find a location in your area.
Community resources. In addition to federally-backed resources, there are a number of community-based organizations that can provide assistance to minority-owned businesses. To find a community resource organization in your area, contact your local chamber of commerce.
SCORE. SCORE is a nonprofit organization that offers free business counseling and mentoring to small business owners. The organization does not focus solely on minority-owned businesses but can be an excellent source of knowledge for business owners.
Small business grants. Minority-owned business owners also can apply for small business grants through various government agencies and private organizations. Unlike loans, grants do not require repayment and can be a great way to cover start-up costs or expansion. That said, grant programs are often extremely competitive and opportunities vary by state.
¹The required FICO score may be higher based on your relationship with American Express, credit history, and other factors.
Frequently Asked Questions (FAQs)
What is minority lending?
Minority lending is a form of financing that’s tailored to and reserved for minority-owned businesses. Minority business loans are available through a variety of sources, including the SBA, CDFIs and other organizations.
Minority-owned businesses can also get funding through online lenders and traditional financial institutions, but these sources of financing are not specifically designed to address the challenges faced by minority-owned businesses.
What are the benefits of being a minority-owned business?
Minority-owned businesses can qualify for grant programs, contracts and other programs that are not available to other businesses. This means that minority-owned businesses may have increased access to certain business opportunities, as well as access to training, mentorship and other community programs specifically tailored to their needs.
Can minorities still get PPP loans?
Paycheck Protection Program (PPP) loans are no longer available. The program ended on May 31, 2021.
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