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Minority Business Loans and Grants

Janet Gershen-Siegel
Janet Gershen-Siegel

Owning your own business is the ultimate leveler of the playing field. These resources will help you get there.

Entrepreneurial dreams are for everyone. And the one thing every business has in common is the need for money. For business owners who are the members of a protected class, there are an array of options for funding.

Below are excellent financing options for diverse entrepreneurs. Note: These are not specifically programs for female entrepreneurs. Still, a woman business owner who is also a member of a minority may be able to qualify for more than one type of funding.

Loans for all minorities

Union Bank

Union Bank provides specific minority business loans and lines of credit. This bank's products are meant for small business owners who meet the bank's designation of minority and are looking for loans of up to $2.5 million. The bank's designation of minority matches the EEOC's.

Funding for members of disadvantaged communities

Community Connect Grants

For entrepreneurs living in or operating businesses in rural areas without internet broadband speed of 10 Mbps or more, this Department of Agriculture grant can be used to help fix that.

Rural Business Development Grants

Available to small businesses, this program offers funds, technical assistance and training for small rural businesses. Federally-recognized tribes are eligible for these grants. Smaller requests are given higher priority. There is no maximum amount for these grants.

NIH Small Business Innovation Research/Small Business Technology Transfer

Per this governmental initiative, eleven eligible governmental agencies must set aside a portion of their budgets so domestic small businesses can engage in R&D with a strong potential for technology commercialization. The eleven participating government agencies are:

One goal of the SBIR and STTR programs is encouraging innovation and entrepreneurship by socially and economically disadvantaged and women-owned small businesses.

Accion

International microloan organization Accion has a microlending program meant to target low- to moderate-income business owners who are having a hard time accessing capital via traditional channels. This makes it a great option for loans for a minority small business. While not specially for minority members, Accion member organizations offer loans from $200 to $300,000.

Funding for immigrant entrepreneurs

Business Center for New Americans

The Business Center for New Americans offers business loans to $75,000 specifically for immigrants, refugees, and women entrepreneurs. This organization's funding provides a path to self-sufficiency for immigrants and refugees.

Funding for Latinx business owners

Camino Financial

Camino Financial specializes in loaning to Latinx-owned businesses. Up to $400,000 is available.

The Latino Coalition

Latinx-owned businesses should also check with the Latino Coalition for possible business funding opportunities.

Funding for Native Americans

Native American Business Development Institute Grant

This Department of the Interior grant works for NABDI economic development feasibility study programs. These allow any Native American tribe or other organized group or community eligible for the special programs and services provided by the United States to natives because of their status as natives, or any authorized native organization, to conduct a feasibility study on the viability of an economic development project, opportunity, enterprise, business or technology.

First Nations Development Institute Grants

Check out the First Nations Development Institute. Grant opportunities come and go, with varying amounts, so Native American entrepreneurs should check back when they can.

Tribal Energy Development Capacity Grant Program

This program gives Native American tribes the ability to develop businesses in the field of energy resource development.

Grants for everyone

Grants from the federal government

Every business owner (even those not in protected classes) should check grants.gov for grant opportunities from the federal government.

FedEx Small Business Grant Contest

Every year, FedEx gives out 10 grants in this contest. The 2019 winners were already announced; the contest will reopen in early 2020. The grand prize is $50,000.

Loans from the SBA

The SBA is a stricter funding source, and not every program is just for minority business owners. However, minority business owners should investigate the 8(a) business development program as participation will make it easier to get financing from the SBA.

SBA 8(a) Business Development Program

Minority or disadvantaged business owners can participate in the SBA's 8(a) Business Development program for small disadvantaged businesses. Then, they will have a better chance of qualifying for an SBA loan, as the 8(a) program is meant to help level the playing field.

In October of 2018, to encourage lenders to make more small loans, the SBA waived the 2% fee for loans of under $150,000. This may result in more loans to minorities, as about 80% of SBA loan applications from black and Latinx business owners are for $150,000 or less, per the agency.

SBA Community Advantage Loans

The Community Advantage loan program is designed to meet the financing needs of small businesses in underserved markets. It is designed to service small business owners who might not qualify for traditional financing.

This program encourages local, mission-based lenders like nonprofit organizations to make loans of up to $250,000. They do so by guaranteeing up to 85% of the loan.

Additionally, it's a good option for minority entrepreneurs who need a large amount of capital.

SBA 7(a) Loans

Small Business Administration guaranteed 7(a) loans are for any entrepreneur who makes the cut, not just the members of minorities. However, they are hard to qualify for. Enter the SBA 8(a) Business Development Program.

SBA microloan program

Minority small business owners looking for loans of $50,000 or less should investigate the SBA microloan program.

Although it does not specifically provide small business loans for minorities, it makes loans of up to $50,000 to help small businesses start and expand. Microloan funds come from third-party lenders. These are often nonprofit community-based organizations which may offer management and technical assistance to small business owners with the loan.

Additional helpful resources

Minority Business Development Agency Grant Competition

The Minority Business Development Agency offers information on loans and a virtual business center grant competition.

Minority Chamber of Commerce

The Minority Chamber of Commerce has a website which could stand to be updated, so entrepreneurs would do better to visit or call their local chapter.

National Minority Business Council

The National Minority Business Council offers an entrepreneurship bootcamp in New York City.

National Minority Supplier Development Council

The National Minority Supply and Diversity Council helps minority-owned businesses get certified as minority-owned businesses and then connects them to contracting opportunities with its network of corporate partners.

Native American Business Enterprises Centers

Native American Business Enterprise Centers support and develop a Native American private sector to employ Native labor and increase the number of viable tribal and individual Native businesses.

Operation Hope

Operation Hope offers training for minority business owners. They do not seem to offer financing currently.

Local government centers

State and city business programs and centers may have minority-oriented financial education and networking programs.

For example, in New York, the Entrepreneurial Assistance Program offers business counseling, business plan development, financial education, and more.

The Georgia page on starting a business is packed with resources for entrepreneurs on getting business licenses and more.

Cleveland also has detailed resources, as does Boston.

Image Credit: fizkes / Getty Images
Janet Gershen-Siegel
Janet Gershen-Siegel,
business.com Writer
See Janet Gershen-Siegel's Profile
I'm the Content Manager for Credit Suite. My responsibilities include daily blogging and creating weekly webinar content about business credit. I have been admitted to practice law for over 30 years, with a focus on litigation, and I am a published author, with writing credits at FedSmith.com and BusinessingMag.com. I regularly write for Credit Suite, which helps businesses build credit for their EIN that’s not linked to their SSN, and get approved for loans and credit lines. My specialties: business credit, business credit cards, business funding, crowdfunding, law, and social media.