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 19 minutes

Top 10 Minority Business Loans

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.

These are at a glance the best small business loans for minorities:

  1. Community Development Financial Institutions (CDFI)
  2. Community banks
  3. SBA Business Development Loans
  4. National African American Small Business Loans
  5. Accion US Network
  6. Business Center for New Americans
  7. Business Consortium Fund, Inc.
  8. Business Diversity Lending Program
  9. Indian Loan Guarantee Program
  10. Camino Financial

We’ll see the features of each below, but first things first… let’s answer the most basic question that you may have.

“How do I qualify for a minority business loan?”

Usually, to qualify for a minority business loan your business must be majority-owned by a member of a minority group, as we’ll describe right below. Additionally, a minority business may need to be registered or certified as a minority business, or disadvantaged business enterprise (MBE/DBE). Have in mind that not all lenders have those requirements. Camino Financial, an alternative lender that you’ll find at the bottom of this publication,  is open to lending to any business owner and, therefore, the requirement described here doesn’t apply.

What else do you need to be considered for programs created to offer minority business loans and 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 for minorities 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:

Lender Required Collateral? Need profitable tax return? Average Credit Score Ease of loan process Speed of loan process Offered Business Education
Large Bank Yes Yes 650+ Requires significant documents 60-90 days Sponsors events and workshops
Community Bank Yes Yes 650+ Requires significant documents 45-60 days Personalized customer care
CDFI Yes No 620+ Requires significant documents 60-90 days Workshops
Camino Financial No No Not required to apply
Low amount of documents submitted electronically 2-10 days Blog, online videos, webinars, e-mails, newsletters.

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

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 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 ten 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 minority business loans to entrepreneurs like you. We have curated a selection of the ten best lenders/programs in the market.

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 collateral.

2. Community Banks

Another great alternative if you’re looking for personalized customer care and competitive rates among minority business loans. 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.

3. SBA Business Development Loans

Targeting socially and economically disadvantaged people, SBA Business Development Loans offer business owners an opportunity to compete for federal contracts set aside for small businesses. After certifying as a small business, you work with a business analyst specialist and form joint ventures with other businesses. According to the guidelines, disadvantaged people include anyone subjected to racial, ethnic and cultural bias or those with less capital or credit.

Pros: You can receive business training and counseling and get help with marketing your business. The federal government earmarks 5 percent of their contracts for the benefit of disadvantaged people as defined by their regulations.

Cons: You must meet specific criteria to qualify for the program. At least 51 percent of the business must be controlled by a U.S. citizen so anyone who isn’t a lawful permanent resident doesn’t qualify. Personal net worth must be less than $250,000.

4. National African American Small Business Loans

Minority business loans are offered to low and medium-income communities in New York, Los Angeles, and Chicago. The NASBLF helps provide assistance of capital to African American minority-owned businesses that can’t get funding through traditional means.

Pros: Loans range in size from $35,000-$250,000. The program also provides technical assistance and financial consultation to small business owners. Recipients may use the money to purchase equipment, provide more cash flow, and to expand operations.

Cons: Funding is restricted to three major cities limiting outreach to minorities in other locations. Likewise, businesses must be owned by African Americans. The loan fund is capped at $30 million dollars unless NASBLF receives additional grants.

5. Accion US Network

Funding from $200-$300,000 is available in all 50 states to business owners with low to moderate incomes. In addition to minority-owned businesses, Accion reaches out to women, veterans, restaurant owners and people with disabilities.

Pros: The nonprofit community lender helps entrepreneurs build their businesses from the ground up. The organization puts business owners in contact with banks, non-profits, and government agencies to provide a support network.

Cons: You can’t be over 30 days late on bills, loans or credit cards. Applicants must have a minimum credit score of 575 as well as no late mortgage or rent payments within the last 12 months.

6. Business Center for New Americans

Loans are granted to minority business owners in the US in amounts between $5,000-$50,000. BCNA offers these loans to entrepreneurs; specifically refugees, women, and immigrants. The organization helps business owners who have been turned down by other lenders because of low credit scores, loan requests that are too small, or for having startup businesses.

Pros: Lenders charge fixed interest rates between 8.25 and 10 percent, low application fees and a 2 percent closing fee on loans.

Cons: A cosigner on the loan is required for amounts over $3,000. Borrowers are required to match 20 percent of the loan amount.

7. Business Consortium Fund, Inc.

The non-profit business program certified by the US Department of the Treasury is dedicated exclusively to offer business loans for minorities. Once you’re approved, you can qualify for $75,000-$500,000.

Pros: Business loans are mainly term loans or lines of credit. Loan amounts above $500,000 are considered on a case-by-case basis. Uses for BCF loans include contract financing, working capital, and equipment financing.

Cons: You must certify your business through The National Minority Supplier Development Council. You can only apply for a loan if you have a supplier relationship with the NMSDC.

8. Business Diversity Lending Program

Union Bank offers minority business loans and lines of credit through its Business Diversity Lending Program. Qualifying ethnicities include Hispanic, Latino, American Indian, Alaskan Native, Asian, Black or African American, and Native Hawaiian or other Pacific Islander.

Pros: Businesses with revenues up to $20 million may qualify for a loan and borrow up to $2.5 million.

Cons: You must have been in business for at least 2 years. Business owners must legally own at least 51 percent of the business.

9. Indian Loan Guarantee Program

Native American-owned businesses can secure financing through the Indian Affairs branch of the federal government. Individuals may apply for up to $500,000 while tribal enterprises and business entities are allowed to complete an application for larger amounts in minority business loans.

Pros: Applicants apply with any lending institution as long as the lender uses a designated Indian Affairs application.

Cons: There are additional loan requirements if you use the funds for construction, renovation, or to refinance an existing loan. Most loans require an analysis of the business operation, a list of available collateral, and a credit report from a national credit bureau.

10. Camino Financial

Camino Financial is an online finance company that helps minority-owned business growth by offering minority business 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 $75,000 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 option 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 one of the minority business loans seen above 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 in 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!  

Looking for more alternatives? Check here a variety of small business grants and capital resources for Latino business owners.



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