Where is the best place to apply for a minority business loan for your startup? If YES, here are 23 best places to get minority small business loans with ease.
Like all entrepreneurs, minority business owners must contend with a constantly fluctuating market and day-to-day obligations. Between purchasing new inventory, expanding staff and moving into different premises – running a small business takes money, and oftentimes, that means it requires borrowing.
Luckily, there are some sources of small business loans for minorities that are worth exploring. Outlined below are some of them.
23 Best Places to Get Minority Small Business Loans With Ease
- The Union Bank
Among the banks that offer minority small business loans is the Union Bank. Union Bank does provide specific minority business loans and lines of credit. These products have less stringent lending standards and are designated for small business owners who meet the bank’s designation of “minority” (which is the same as the EEOC’s) and want loans of up to $2.5 million.
To be eligible, you should qualify as a minority under the bank-adopted ethnicity and race categories. You must also own and actively manage at least 51 percent of your business. Also to qualify, your annual sales should not exceed $20 million and your company should have been in business for at least two years.
- 37 AngelsMinority Business Loans for Women
37 Angels is a female-founded firm that only funds businesses with a proof of concept. Venture capital investments are not exclusive to any demographic, however they do seem to show preference for women and minority-owned businesses.
- National African American Small Business Loan Fund
The National African American Small Business Loan Fund is a program for African American-owned small businesses based in Los Angeles, Chicago and New York City. Offered by The Valley Economic Development Center and JPMorgan Chase, this program offers loans in the range of $35,000 and $250,000.
The funds provided by the company can be used as capital to expand, buy or finance equipment, meet short-term cash flow needs and provide contractor lines of credit. Asides funding, they equally give financial consulting, and technical help.
To qualify, you need to first complete an online application where you’ll have to provide some basic information about your business and fund needs.
- SBA 7(a) Loans & 8(a) Business Development Program
Small Business Administration guaranteed 7(a) loans are not for minorities only. However, minority or disadvantaged business owners who participate in the SBA’s 8(a) Business Development program for small disadvantaged businesses have a better chance of qualifying for an SBA loan.
Some 80% of SBA loan applications from black and Hispanic business owners are for $150,000 or less, according to the agency. Ironically, smaller loans are often harder to get than big ones, since lenders don’t make as much money from them, and there are a lot more businesses vying for them.
- Minority and Women Revolving Loan Trust Fund Program
The Minority and Women Revolving Loan Trust Fund Program is making low-cost financial assistance available to minority and women-owned businesses that are unable to access traditional financial services.
Operated by Empire State Development, it has capitalized loans of more than $3.5 Million for 13 community-based economic development organizations located throughout New York.
- SBA Community Advantage Loans
The Community Advantage loan program works to meet the financial needs of small businesses in underserved markets. The program encourages local and mission-based lenders such as nonprofit organizations to make loans of up to $250,000 by guaranteeing up to 85 percent of the loan amount. The program is designed to service small business owners who might not qualify for traditional financing, so it is a great option if you are looking for minority small business loans.
This loan option is good for entrepreneurs that require more money to run their businesses. For details of how to apply, you need to contact your local SBA district office.
- Accion Progragm
International microloan organization Accion is a U.S. microlending program targeting low- to moderate-income business owners who have difficulty accessing capital through traditional channels, making it a great a option for loans for a minority small business.
With over 60 percent of its borrowers belonging to minority communities, the organization has a minority-oriented funding program.
Accion provides loans to minority-owned businesses in various industries such as construction, manufacturing, retail, restaurants and healthcare. The funds provided can be used to buy or upgrade equipment, add new health and beauty services, remodel, recruit staff, buy supplies or market products and services.
While not minority-specific, Accion’s U.S. member organizations offer loans from $200 up to $300,000 in all 50 states. To qualify for this loan, you should be at least 18 years of age, have a credit score of 550 or higher and meet some other additional criteria.
- Balboa Capital – Hispanic Small Business Loans
Balboa Capital offers easy business loan options for Hispanic firms. The loan program offers fast and convenient access to funds and boasts of a high approval rate. The loans are up to $150,000 with basic information being up for grabs. The fund also offers up to $1 million with a full financial package.
You can use the company’s free business loan calculator to get an instant quote and submit your application on its website.
- The Affiliated Tribes of Northwest Indians
The Affiliated Tribes of Northwest Indians (ATNI) revolving loan fund is aimed at providing funds and technical support to native American-owned businesses for the purposes of relocation, expansion or startup.
The maximum loan amount is typically $125,000, although in certain cases more is available. The term of the loans range up to 10 years. Funds can be used to buy inventory, equipment, remodel, or as working capital. To qualify, you need to contact Mike Burton and discuss your business proposal. If your application meets ATNI’s lending criteria or community benefit goals, you will be required to submit a completed application.
- Black Business Loan Fund
The Black Business Loan Fund (BBLF) offers loans to African American-owned businesses based in Seminole, Osceola, Orange and Lake counties in the state of Florida. There are two types of loans available to businesses under this program: direct loans of up to $100,000 and loan guarantees of up to $100,000.
To qualify, at least 51 percent of your business should be African American owned. It should have been in operation for a minimum of two years and it should be able to create jobs for people.
- Energy and Mineral Development Program
The Energy and Mineral Development Program is designed to provide funds to federally recognized tribes to perform technical evaluations of the energy and mineral resource potential of Indian reservations. In a nutshell, it is aimed at providing funding to both tribes and individual mineral owners to use resources on Indian lands.
The program is for federally recognized Indian tribes and individual American Indian mineral owners.
12. Business & Industry (B&I) Guaranteed Loan Program
While not exclusively aimed at minority borrowers, the Business & Industry (B&I) Guaranteed Loan Program provides a government guarantee to lenders for their loans to businesses based in rural communities — and this includes for Federally recognized tribal groups. The program seeks to improve, develop or finance businesses in the rural parts of the United States.
Funds can be used to buy equipment or inventory, repair or modernize business, and for debt refinancing, to name a few.
To qualify, you should be a cooperative organization, corporation, partnership or other legal entity organized and operated on a profit or nonprofit basis; an Indian tribe on a Federal or State reservation or other federally recognized tribal group; a public body; or an individual.
- Latino Economic Development Center
The Latino Economic Development Center (LEDC) offers loan assistance to small and mid-sized businesses based in Minnesota. There are four loan products in this program to choose from: microenterprise (to start or expand a business), community real estate development opportunities (to purchase or improve real estate by growing business), cooperative (to start or expand a cooperative enterprise), and co-op member share loan (to finance the purchase of a share in a co-op by an existing or proposed co-op member).
To apply, you should download the LEDC’s loan application form. Some of the documents you are required to submit include a business plan covering information regarding your business, last three years’ tax returns for corporations and partnerships, monthly cash flow projections for one year, and quarterly for second and third year, among others.
- Business Center for New Americans
The Business Center for New American gives minority business loans of $5,000 to $50,000 specifically to minority business owners in the United States. The BCNA specifically works with immigrants, refugees, women, and other minority entrepreneurs.
This organization helps finance minority entrepreneurs who were turned down from traditional financing options for any number of reasons, including; the loan the borrower requested is too small, the bank won’t lend to a startup, the borrower’s credit score is too low, but there’s ability to repay the loan.
- Nonprofit Microloans
If you need access to less than $50,000 to startup or expand, the SBA microloan program is one to check out. The average microloan is $13,000, and you can obtain one through a multitude of nonprofit community organizations.
- Belle Capital
Another early-stage angel fund, Belle Capital focuses on companies in underserved capital markets across the U.S.
- Business Development Program
You can get help for your minority owned business through the Small Business Administration in a couple different ways.
The SBA 8(a) Business Development Program helps entrepreneurs win lucrative government contracts and long-term growth. Participation in the program is dependent on strict eligibility criteria and is divided into two phases over nine years.
18. SBA Community Advantage Loans
The Community Advantage program has been introduced to meet the credit, management, and technical assistance needs of small businesses in under-served markets. The program provides mission-based lenders access to 7(a) loan guaranties as high as 85 percent for loans up to $250,000.
To qualify, you must meet SBA’s size standards. While you must prove your credit worthiness and the viability of your business idea, this program is not restricted by the size of your balance sheet.
- Entrepreneurial Assistance Program (EAP)
EAP centers provide education and support to minority business owners in New York who need help creating marketing plans, applying for loans, and more.
- National Association for the Self-Employed
The National Association for the Self-Employed is a nonprofit organisation that offers loans and grants to members who demonstrate the value of their small business.
- CDFI Small Business Loans for Minorities
Community Development Financial Institutions (CDFI) are focused on helping disadvantaged people and businesses get access to affordable financing. CDFI’s get backed by the federal government in order to make loans to small business owners that may have difficulty getting approval at a traditional lender or to get approved for financing with favorable rates and terms.
Traditional lenders are generally very conservative in their underwriting. Business owners must typically have high amounts of collateral, great credit, and a safe business model in order to qualify for financing with good terms. A minority owned small business with less than perfect credit, lack sufficient collateral, or that’s operating in a less than prosperous area may not only be more likely to qualify for financing with a CDFI, but qualify for a better loan.
A CDFI loan is a good option for minority business owners whether you’re a prime borrower or not. If you’re running into trouble getting financed through traditional lenders due to a lack of collateral or your credit profile, a CDFI may be able to get you financed with affordable rates. Also, if your small business is located in a disadvantaged geographic location, you may find a CDFI more willing to approve financing or offer financing on more favorable terms.
- VEDC – business loans for minorities
Valley Economic Development Centers (VEDC) is a non-profit organization that has partnered with various banking and other financial partners to offer specific financing opportunities for minority populations. One example is the National African-American Small Business Loan Fund which assists African American entrepreneurs in growing and sustaining businesses.
- Operation hope – small business loans for minorities
The Hope Small Business Empowerment Program helps aspiring entrepreneurs from low-wealth neighborhoods to build businesses in their communities. They have partnerships with over 25 direct lenders nationwide to help you gain access to a wide range of loan options. They also offer business training and other financial services.