Mixed race couple behind the counter at their coffee shop to illustrate the idea of minority business loans
Italia Martinez Vallejo
By: imartinezvallejo
Read in 12 minutes

Top 3 minority business loans

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Many entrepreneurs look for ways to fund their business but feel unsure about their options. That’s especially true among minority business owners: according to the SBA, only 5% of them get a loan! They often seek financial help but feel more comfortable getting the funds from their own savings or family. Does this sound familiar to you? If you are a minority business owner, the truth is you could be missing a unique opportunity to fund your business. There are alternative lenders and special programs out there that offer minority business loans specifically crafted for entrepreneurs like you.

First things first… Can you be considered for programs created to help minority business owners? If you answer “Yes” to any of the following questions, you’re likely eligible for flexible loan programs to capitalize your business.

  • Do you run a business generating less than $1 million in sales?
  • Has your business reported less than 2 years of positive net income in its tax returns?
  • Are you starting a business or have been operating for less than 3 years?
  • Do you belong to one of these minority groups?: women, African Americans, Asian Americans, Indian Americans, Hispanic, Latino or Pacific Islanders.

So now that we have determined your eligibility, what are your options? 

First look and comparison

Analyzing all the information about business loans can make you dizzy! Check out this comparison table to take a fast look at what could be the best minority business loan for you:

LenderRequired Collateral?Need profitable tax return?Average Credit ScoreEase of loan processSpeed of loan processOffered Business Education
Large BankYesYes650+Requires significant documents60-90 daysSponsors events and workshops
Community BankYesYes650+Requires significant documents45-60 daysPersonalized customer care
CDFIYesNo620+Requires significant documents60-90 daysWorkshops
Camino FinancialNoNo640+Low amount of documents submitted electronically2-10 daysBlog, online videos, webinars, e-mails, newsletters.

Want to learn more? See below a deep dive on each loan option.

Large Bank Loans

This is probably the first thing that came to your mind, right? It seems only obvious. If you need a loan, you go to a bank because they offer the best rates and you probably have a checking account opened with them. While banks do offer the lowest rates and the longest payback terms, you need to consider the following challenges many small business owners encounter when first going to the bank:

  • Large banks are not very comfortable lending to businesses earning less than $1 million in sales because of the relatively small loan amounts and higher failure rates in comparison to larger businesses. Since banks are not as tech-enabled as an alternative lender like Camino Financial, it costs them the same to approve a $700,000 loan than a $7,000 loan.
  • Small businesses don’t always own large assets such as a commercial real estate or a fleet of vehicles to pledge as collateral for the loan. More likely, small businesses rent or lease large properties or assets instead of owning them. Due to the lack of collateral, small businesses find it challenging to access a secured loan from a bank.
  • Within the first 3 years of operating a business, small business owners likely don’t have perfect credit scores because they may have overused their credit cards to get started. Sounds familiar? When applying with a large bank, you need to ensure you have a credit score over 680 to qualify.

But don’t lose hope yet! There are other loan alternatives that adapt perfectly to your situation. Since small businesses, especially those started by minorities, are taking a bigger role in the country’s economy, many innovative technology companies like Camino Financial are keen on partnering and funding this new breed of entrepreneurs. You’ll find your top three options for minority business loans below.


Small Business Loans for Minorities

OK, so here comes the best part. There are alternative lenders and special programs that offer business loans to entrepreneurs like you. We have curated a selection of the 3 best lenders/programs in the market.

Option 1: Community Development Financial Institutions (CDFI)

CDFI are non-profit financial institutions looking to lend to traditionally underbanked communities including minority business owners. After the Community Reinvestment Act of 1977, banks are obligated to fund communities that find it harder to qualify for a loan. Many large banks indirectly fund minority business owners by funding their CDFI partners and referring bank clients to them. The best way to locate a CDFI is by going to your local Small Business Administration office or business development center to inquire about them.

Pros: Personalized assistance with your loan that helps you prepare to get a large bank loan in the future. Competitive rates with wide coverage in the U.S.

Cons: The application process might take a while. If you’re in need of a larger amount of loan, a CDFI loan might not be enough, and just as with a large bank loan, you might require a collateral.

Option 2: Community Banks

Another great alternative if you’re looking for personalized customer care and competitive rates for your small business. Community banks are usually a great option for minority-owned businesses as they’re more accessible than large banks and more focused on helping people in the community instead of serving big national businesses. But as in everything in life, there are pros and cons.

Pros: Faster and better customer service so you can access your loan more easily. They will get to know your story and will consider this in the loan application. Building a relationship with your bank is key! Since most banks are certified SBA lenders, their rates and loan terms are just as good as large banks.

Cons: Similar to large banks, they don’t move very fast. Also, community banks are even less tech-enabled than large banks which requires you to make several trips to the bank branch to submit paperwork and sign your loan docs.

Option 3: Camino Financial

Camino Financial is an online finance company that helps minority-owned business growth by offering loans and business solutions. Different than CDFIs, they’re process is 100% online making it convenient, simple and secure for small business owners to access capital. Camino Financial offers microloans that range from $5,000 to $50,000 and small business loans that range from $10,000 to $400,000. Since Camino Financial was built to serve minority communities, they have a bicultural team that speaks English and Spanish.

Pros: Collateral is not required, and you can repay the whole loan amount at any time with no penalties or additional fees. Your application is pre-qualified within 24 hours, and all required documents are submitted electronically to avoid unnecessary trips to submit or sign documentation.

Learn here the 4 easy steps to get a business loan with Camino Financial

Cons: The loans can’t be used for real estate investing, financial investing and car dealerships.


Camino Financial Success Story

We found Camino Financial to be the best options for minority business loans. But don’t take our word for it. Meet Oscar, a passionate business owner of a small deli shop in San Francisco, California. After working for two years at his favorite sandwich shop, he finally got the opportunity to acquire it, and that’s when his journey began.

His main goal was to make some changes in the dining area to improve the customer experience. He also wanted to get in some new equipment to ease the work for his employees. Oscar tried three other lenders and he was never approved. He also found a merchant cash advance loan but it was too expensive. Then he found Camino Financial and learned it was the best fit for him.

Not only has the process of getting a loan has been fast; Oscar is also very satisfied with the customer service and the way they’ve been so understanding and helpful with his business needs. Camino Financial has helped Oscar to increase 5 times his credit capacity and to increase 50 points in credit score, so he’s now able to access higher credit lines.

Get inspired by more stories like this one. Getting exactly what you need and a lender that understands can make your small business soar in little time.



Getting a loan for your small business will always involve some effort, and it’s something you should look into very carefully to find the option that best fits your needs and your ability to pay back. It seems that there are more obstacles for minority business owners to get a loan, but as we mentioned on this article, there are also several financial institutions and organizations focusing on this sector of the population.

Camino Financial might be just what you’re looking for: not only the rates reasonable but there’s also no need for pledging collateral. The amount of documents required is very low and the best part is that your loan can be approved in 24 hours. Receive the treatment you deserve by talking to one of our loan specialists. They’ll be happy to hear from you and guide you through the process of getting the loan you need. Apply now and start this journey with us!  



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