Small Business Loans for Minorities

Small Business Loans for Minorities

Access to capital can make or break a small business when it’s first starting out. Even well-established businesses need help time to time with small business loans or capital to grow their business.  Historically speaking, it has been harder for minorities to access capital. This gap has been narrowing, however, as more women applied for funding in 2018 than in any year prior.

That is why many organizations, non-profits, and government agencies have been formed to help minorities access the capital they need to succeed in business. Women are still approved for loans at a rate of 33% less than their male counterparts, and the numbers are even worse for other minorities.

If you are a minority business owner who needs business funding, here are a variety of resources to help you raise the capital that you need. This is not an exhaustive list, but rather intended to help point you in the right direction.

State Loan Programs for Women

Each state has State Loan Financing Programs which establish various economic programs to help women in business. After answering a few questions and typing in your zip code on the website, this government resource displays a variety of local resources for financing. The Small Business Administration has offices and help in every state, some of which are listed below. We also recommend taking this SBA-provided 45-minute business financing course here to prepare for applying with many of the SBA-backed sources.

Grants for Minorities

There are two types of grants; those that the government offers and those sponsored by individuals or private organizations.

Government Grants for Minorities

Government grants can help you fund an existing project if you operate in certain industries or are a certain type of organization. Government grants have stringent compliance and reporting requirements to qualify, and fierce competition.

Government grants are funded by tax dollars so they are generally not available for start-ups or expansion purposes. They are notoriously difficult to receive, and typically only given to non-profits and non-commercial entities such as education, technology development or medicine, scientific research or if your entity contributes to the community in specific areas.

If you think your business might meet the requirements from the government here are some excellent resources.

  • https://www.grants.gov/web/grants/search-grants.html is a comprehensive grant resource database where you can search for most of the Government Grants available.
  • The Small Business Innovation and Research Program and The Small Business Technology Transfer, https://www.sbir.gov/about/about-sbir, are grant programs specifically geared to companies working on technological innovations or research and development that has the potential for commercialization.
  • The comprehensive directory Grants for Women has details about organizations and the grants they offer to women-owned businesses.
  • On the Grant Watch website you can search for grants geographically and by the type of funding source.

Private Grants

Private grants can be offered by organizations or individuals who want to give back to their communities. Private grants for minorities are typically small sums of capital which will not entirely fund a start-up, but in combination with other forms of financing can be a good option.

Here are some resources to get you started finding private grants.

  • Zion’s Bank Women’s Financial Group offers Smart Women Grants which are $3,000 grants to each of 6 different categories or business types. The grant recipient must either be a woman or be running a business which directly benefits low-income and underserved populations in Utah or Idaho.
  • Amber Grant is a program that offers $2000 grants for women entrepreneurs. After being selected for one of the smaller grants female business owners are then eligible for the $25,000 annual grant.
  • First Nations Development Institute Grants. These grants are given to native nonprofit organizations or tribes seeking to develop asset-backed programs. They give money in 39 states and American Samoa.
  • The women’s clothing retailer Eileen Grant sponsors the Eileen Fisher Grant. It is a program that awards $10,000 grants to a business where the majority stake in the company is owned by a woman. The company must already be operating and have the potential to create social or environmental change.
  • FedEx offers small business grants of up to $25,000 awarded to small businesses. Nonprofits cannot apply. These are not specifically minority-focused grants but open to all small business owners.
  • The Walmart Global Women’s Economic Empowerment Initiative assists women in business by either purchasing their products or providing financial grants.
  • The American Association of University Women gives out career development grants to help women reentering the workforce or trying to pursue academics beyond the bachelor’s level. While not specifically to help your business, they could help you get some of the education you need to run it successfully.
  • The Open Meadows Foundation gives you $2,000 grants if your project directly benefits girls or women. The foundation focuses on political change or assisting in building community power.
  • Dare to Dream Grant Program. Only available to University of Michigan students, this grant offers business development programs to individuals and student teams as they develop the idea for a business.
  • If your business involves creating or designing jewelry, the Halstead Grant offers up to $7,500 in a grant as well as $1,000 worth of jewelry supplies for emerging talent in the jewelry industry.
  • NASE Growth Grants are monthly grants of $4,000 to small businesses which are meant to help them grow. Money can be used to hire new employees, buy new equipment, or boost marketing.
  • Google offers a program called Google Ad Grants where eligible nonprofits are given up to $10,000 a month in free advertising.
  • The Minority Business Development Agency is a federal agency which runs minority business centers and offers resources to help minority small business owners succeed. They do not offer standing grants, but run competitions for specific minority groups. The current grant competition is for American Indian, Alaskan Native and Native Hawaiian

As this list makes obvious, there are grants available within industries, such as jewelry, for current or former students of universities, and for minorities on the basis of race or sex. Use this list as a jumping off point to search for grants which are specific to your situation.

Small Business Loans for Minorities Provided by Private Organizations or Banks

Some organizations and banks offer small business loans specially tailored to women or other minorities. Many of the options listed below were created for women, however, there may be more available specific to other minority groups. It is worthwhile to network within many of these organizations’ local branches to find options in your city.

While minorities are eligible to apply for business loans in any bank, as long as they have good credit, many local community banks offer business loans tailored to minorities which include more services and access to helpful business and financial planning resources.

Foundations, Funds and Initiatives that Give Small Business Loans to Minorities

  • The Tory Burch Foundation lends money to women who have operated a business for at least two years, have a good credit rating, and operate a sustainable business model. These small business loans are given out through Community Development Financial Institutions.
  • An organization dedicated to helping women succeed, the Women’s Venture Fund provides funding and additional business resources to female entrepreneurs.
  • The National Minority Supplier Development Council exists to help minorities succeed in business. Once your business is certified as minority-owned, corporations and other businesses seeking to develop more ties to the minority community will be more willing to work with you. Your business is then included in the council’s database and you have access to top corporate purchasing executives.
  • Women’s Economic Ventures is dedicated to assisting women in business by providing small business loans as well as additional business resources. Startups can borrow as much as $25,000 and expanding businesses can receive up to $50,000 in loan funding.

Geographically-Based Small Business Loans for Minorities

Often offered in economically-depressed areas or only available to minorities, geographically-based loans and grants might be available in your area. The amount you can borrow varies, but many of these loans are at below-market rates and the grantors provide training and access to resources in addition to funds.

  • If you operate or expect to operate in Wisconsin, the Wisconsin Women’s Business Initiative grants small business loans up to $250,000 to startups or existing businesses.
  • Small business loans from $25,000 to $500,000 are available through the Economic Development Corporation of Eerie NY. They’re given to women-owned existing businesses or startups in operation for less than two years and that are located in distressed areas in the Eerie region.
  • Northeastern University Business Loans range from $1,000 to $1 million and have below-market interest rates. You must be a women owned busines in Boston in operation for less than two years.
  • The Business Outreach Center Network is a NY organization that lends small business loans to women in New York in amounts up to $50,000. They also help with business plan development and have many other business development resources.
  • Women and minority businesses in Philadelphia can borrow through the Women’s Opportunity Resource Center of Pennsylvania. Startups and existing businesses are eligible for loans from $500 to $35,000.
  • My Entrepreneur Works gives out small business loans to startups or existing businesses in the Philadelphia region. They also offer training and a variety of business tools to boost women’s odds of succeeding in business.
  • Maryland Capital Enterprises Inc lends small business loans to women in Maryland. Loans go up to $250,000 and have interest rates between 7% and 12%. Both startups and existing businesses can get financing as well as MBE certification, tools to write business plans, and networking opportunities to help female entrepreneurs get their business off the ground.

Local Bank Small Business Loans for Minorities

This list of local and national banks who offer minority-specific programs is not meant to be comprehensive, but rather to demonstrate that these programs exist. Use search terms similar to the names of these programs to find one in your area.

  • Key Bank announced a commitment to female business owners and backed up their announcement with loans to businesses of all sizes. They also help with custom financial solutions, educational and networking opportunities to women-owned companies in 14 states, including Ohio and surrounding areas.
  • PNC has financial products and services which are specifically geared to women. They also have educational and advisory services to women in business. Headquartered in Pennsylvania, the bank serves that region of the country.
  • Union Bank’s Business Diversity Lending program was created to help women owned companies to more easily qualify for needed financing required to build their business. They have branches in California, Oregon and Washington and primarily serve the West Coast.
  • Goldman Sachs “10,000 Women” initiative is meant to provide female entrepreneurs with business management resources, networking and mentoring, as well as ways to access to capital.
  • North Carolina based Local First Bank, offers a variety of small business loan options to women entrepreneurs.
  • Another North Carolina bank, Live Oak Bank, gives small business loans to women operated businesses that receive federal government contracts.
  • American National Bank, in Wisconsin, lends to women-operated businesses that are already in operation. Women-operated businesses can receive funding up to multi-million dollar business loans. The bank is a certified preferred lender with the SBA.
  • JP Morgan Chase runs Lift Fund loans, which recently announced an initiative to increase access to small business loans for women in the South. Available small business loans range from $500 to $1,000,000.
  • If you are a minority who lives in an underserved community, look into Community Advantage Loans, which are granted through approved local lenders. Offered through an SBA pilot program they provide access to credit and technical assistance to small businesses in underserved communities.

Economic Development Agencies

Each state and many local governments have dedicated resources to help new and established businesses grow and be successful. To find an agency in your state, the SBA has a platform where you can search state.


Community Development Financial Institutions, or CDFIs, are financial institutions established through the government to provide affordable loans to low-income or disadvantaged communities. Their programs have certain criteria to qualify, such as your business must be located in a disadvantaged community, the owner must be a member of a minority group, or income requirements. Here are some examples of CDFIs as well as a few resources to find local CDFIs in your area.

  • The CFDI website, cfdi.org, is the central resource to find a list of community-based CDFI’s.
  • If you live in the Pacific Northwest, look into the nonprofit CDFI Craft3. They offer small business loans for women with amounts ranging from $25,000 to $5,000,000. Interest rates range from 7% to 12% with repayment terms from 3 to 7 years. There are additional legal and origination fees to consider, so be sure to understand all of the loan’s terms before applying.
  • ACE Women’s Business Center is another CDFI that gives out small business loans to those who have bad credit scores as low as 550. Loan amounts go up to $50,000. They also have business advisory services and their website features online business training courses with  Dreambuilder.
  • If you do not qualify for traditional financing and are an entrepreneur or small business owner, AEO Works is a network of community lenders with the mission to serve people like you. Initiatives give underserved entrepreneurs access to small business loans in local communities through CDFIs.

Venture Capital

Angel investors or venture funding often supply start-up capital or secondary funding for small businesses in the early stages. Known for being extremely picky, Venture Capitalists have a very stringent vetting process. If you have a great idea or business model you could consider approaching them, but you might need to hire someone experienced in raising funding with them. Many have been started to focus on working with and funding women-owned businesses.

The SBA offers great teaching tools to learn about venture capital and angel investing. Below are a few venture capital funds that primarily work with, or seek to work with more, women.

  • Female entrepreneurs around the world can obtain capital, take advantage of networking opportunities, and receive business guidance through Astia. You do not have to be a start-up.
  • Golden Seeds gives funding to women-led companies where a female both owns a good amount of the company and that woman has power and influence. They follow strict requirements as to company type, revenue, and margins.
  • A group of women investors that give women access to capital in amounts up to $150,000, 37 Angels is a group of female investors that gives women access to capital in amounts up to $150,000. They understand women and entrepreneurship and working with them can be a good fit for a woman owned business.
  • Plum Alley brings together investors and influencers to advance women owned and gender diverse companies. Their hands-on approach walks you through the entire business funding process and gets you capital for your business.
  • Women’s Capital Connection is a network of more than 100 women investors that focuses on investing in women-led startups.
  • The female-founded group Topstone Angels encourages women-owned startups to apply for venture capital. Unlike some venture capitalists, which specialize in one sector, they invest across multiple industries.
  • Early-stage capital fund BBG Ventures lends to mobile and internet startups with at least one female founder.
  • Belle Capital is an Angel Fund that invests in the technology sector. They fund companies that are founded by women, have female executives, or who are willing to recruit women for the executive level.
  • Springboard is a network of expert innovators, influencers, and investors looking to accelerate the access to growth capital for female entrepreneurs.
  • Phenomenelle Angels Fund invests in early stage women-owned companies in the Midwest. Their network of successful female entrepreneurs advises other women, assists in recruiting, and helps with marketing and partnerships. They also assist business owners with additional financing.
  • Backstage Capital lends to people of color, women, and LGBT founded companies. In exchange for 5% equity, you can get up to $100,000 in funding, support, and free co-working spaces.
  • The Harriet Fund invests in early-stage women owned companies. Funds come from investors in the community as well as by a woman-owned venture fund. Their accelerator program provides coaching and mentoring in addition to capital.
  • Women-owned tech companies can get capital through the Female Founders Fund, which invests in early stage women owned tech companies. The Fund also provides networking options with leading female CEO’s and executives.

Microloans for Minorities

Microloans are loans which only give a small sum of money, too small a sum of capital to interest a bank. Most microloans are capped at $35,000, though some can range up to $100,000, with the average being about $13,000 according to a recent senate report.

  • Grameen America, an offshoot of the pioneer in microlending, provides microfinancing to women entrepreneurs.
  • The nonprofit Accion offers microloans up to $50,00 to lower income entrepreneurs, including women. They also have articles and videos as well as other business resources on their website to assist entrepreneurs on business matters.
  • The SBA Microloan Program gives out loans up to $50,000 to assist small business owners and certain types of nonprofits with starting up or expanding their business. The funds can be used for items such as inventory, furniture, machinery or equipment, or working capital.
  • The NY Minority and Women Revolving Loan Trust Fund Program assists minority and women owned small businesses with loans up to $50,000. Additionally they guide applicants through the application process and give applicants business plan assistance, mentorship, and other business services.
  • Shield Funding knows that minorities can struggle to raise capital. Small business loans fit the “microloan” definition, as Shield lends in amounts as low as $5,000. Because start-ups and new businesses have so many unusual circumstances, they lend on the basis of monthly revenues and only require two months in business.
  • The Michigan Women’s MicroLoan Fund Program provides microloans up to $50,000 to small businesses where a woman owns at least 51%. The business must be legally established and based in the state of Michigan.

At Shield Funding we believe in assisting minorities in business. We believe that educated borrowers are empowered borrowers, and want you to know all of your options for small business funding. We also suggest reviewing your borrower’s rights before taking out a loan.

If you have any questions, please call. We would be happy to help guide you to the right choice when it comes to financing your business.