How Minorities Can Get a Business Loan in 2021: The Definitive Guide

Minorities own over 9 million businesses in the United States and growing fast. In this guide to funding for minorities, we will show you:
- The best loan minorities should apply for to get operating capital
- What you need as a minority to qualify for a loan
- How to get approved and funded quickly in just 1-2 days
- How to secure the lowest interest rate on a business loan
- Answers to frequently asked fundraising questions by minorities
So if you want to get instant financing for your minority-owned company, you'll love this guide.
Let's get to it.
The Top Five Business Loan Options for Minorities
Even with the economic boom, statistics show that access to working capital is the key factor in growth for companies owned by minorities. We are here to solve that.
Having approved and funded over 10,000 minorities, we’ve simplified the process of choosing the right loan and getting approved without any hassle. Here are the best business loans that provide the capital for minority entrepreneurs to succeed:
1. Business Line of Credit for Minorities
Ideal for minorities who want a flexible funding option to manage day-to-day business expenditure.
Business lines of credit are similar in structure to a traditional credit card (with a much lower interest rate). You are approved for a specified amount of revolving funds that you can draw from on-demand. The key benefit of a line of credit is that you only pay interest on the funds your business withdraws for use. There are no restrictions on the type of expenses you want to pay for. You can purchase new equipment, stock up on inventory, hire more staff, and open a new location.
Benefits of a business line of credit for minorities:
- Minorities with bad credit scores can secure funding
- Low APRs starting at 6%
- Working capital is available on-demand as needs arise
- Only pay interest on the funds you withdraw
- Improves your personal credit rating
- No prepayment penalties
Apply for Business Line of Credit
Long-Term and Short-Term Loans for Minorities
Ideal for minorities who want instant approval regardless of their credit score without giving any personal guarantee or collateral.
Short-term loans are the most popular financing option for minority-owned businesses. It is the most traditional way of getting working capital. You get a lump sum of money with a fixed interest rate that you pay back over a specified loan term length. The term length is usually between 6 months to 2 years.
Clarify has the highest approval rates for minority term loans and offers early payoff incentives that further reduce your costs. The entire funding process takes as little as 1 day with interest rates starting at 7%. Another benefit is that you don’t need to provide any collateral or personal guarantee to secure a short-term loan.
Benefits of term loans for minorities:
- Fixed interest rate
- Early payoff incentives that lower costs
- Fast business loan option
- Any personal credit score can get approved
- All types of minority-owned businesses are eligible for approval
- No prepayment penalties
- No collateral or personal guarantee requirements
3. Equipment Financing for Minorities
Ideal for minorities who want to buy or lease new or used equipment.
Equipment financing is a great way for minorities to borrow up 100% of the money needed to purchase equipment. The process to get an equipment loan is quick and can be used on a myriad array of purchases including technology, vehicles, and commercial machinery.
The term length of the loan is dependent on the expected life of the equipment you’re buying. The only collateral needed is the equipment itself. So there is no personal guarantee needed.
Benefits of equipment loans for minorities:
- Low documentation or paperwork
- Highly competitive APRs due to the collateral
- Bad personal credit is okay
4. Invoice Financing for Minorities
Ideal for minorities who want to get paid instantly for outstanding customer invoices.
Invoice financing (also called factoring), allows minorities to borrow capital based on unpaid receivables as collateral. A lender will provide you 85% to 99% of the total invoice amount as a lump sum, with the remaining amount also paid to your business once the invoices clear. Your personal credit score does not matter at all, making it a great option for minorities with poor credit.
Benefits of factoring for minorities:
- High approval rate
- No personal credit score requirements
- Instant infusion of cashflow without taking on debt
- Only collateral needed is the unpaid account receivables
5. SBA Microloans for Minorities
Ideal for minorities who have good credit score and need less than $50,000 in funds.
While the Microloan program from the SBA (Small Business Administration) is open for any qualifying small business owner, it makes for a good starer loan for minorities. The program is geared to provide up to $50K to help a founder start or expand their company. Unlike their 7(a) program, microloans are fulfilled through SBA-approved local nonprofit lenders.
Benefits of SBA microloans for minorities:
- Low interest rates for minorities with great credit score and business plan
- Good option if you need less than $50,000 and not in a rush to secure funding
Benefits for Minorities of Getting Financing from Clarify Capital

Minority-owned small businesses saw a growth of 79% between 2007 and 2017. That is approximately 10x faster than the overall growth of small companies in the United States. Clarify Capital is committed to helping minorities succeed with the cashflow they need to grow. Our network of 75+ lenders offer fast approval and competitive interest rates, even with less than stellar credit scores.
1. Best interest rates for minorities
As one of the largest lenders for underserved minorities, we offer the most competitive rates on short-term loans and business lines of credit. Our core mission to help minorities achieve success in their business endeavors.
2. Instant approval and funding
We have the highest approval rating in the industry for minorities. Traditional financial institutions like banks take weeks to make a decision, but Clarify offers instant approval online. Even if you have bad credit, our team works hard to get you approved for funding.
3. Fast approval process for minorities
Time is your most precious asset. So we have streamlined our loan process to have money in your account in as little as 24 hours. The online business loan application is simple (takes less than 2 minutes) and your dedicated Clarify advisor will walk you through the entire process.
4. Minimal documentation — we handle all the paperwork for you
For short-term loans, all you need is three months of recent bank statement. That’s it! We have you covered with all the legwork needed. So you can focus on running your business.
5. No collateral required
You do not need to provide any personal guarantee or collateral to get a minority business loan. We are committed to lowering any risk for minorities to borrow working capital.
6. No hidden fees, full transparency
We take transparency seriously. There are never any hidden fees or complicated terms you can’t understand. Business loans for minorities are crystal clear on the rates you are getting, the loan term length, and payment plan that is tailored to your specific needs. We take pride in being the most transparent lender in the industry.
7. Interest is tax deductible
You can deduct any interest paid on business loans at the end of the year, further reducing your overall cost of the financing. No matter which type of loan you go with, the IRS allows you to deduct interest payments.
8. Customized payment schedule based on your cashflow
With term lengths from 6 months to 2 years, we tailor a payment plan that works best for your business. We offer all flexible re-payments options — daily, weekly, bi-monthly, and monthly.
How Minorities Can Apply for a Business Loan
As a minority business owner, you want a friction-less loan process that doesn’t slow you down. That’s what we’re great at. We have a simple online application that you can complete in under 2 minutes.
Here is a detailed look of how the overall process works:
Step 1: You decide how much money you want borrow
We recommend first visualizing your business goals for the next 12 months. Jot down the expenses that you can expect to pay to run and grow your company. This will allow you to make a better decision on how much capital you need to be successful.
Step 2: Apply online
The online loan application is as simple as it gets — three quick steps and you’re done! Minority business owners love the instant approvals and ease of getting funded.
Step 3: Keep 3 months of bank statements handy
After you’ve filled the online application, our team will get to work. All you’ll need to provide your advisor is three months of most recent bank statements for cashflow verification. That’s it! We do all the other paperwork to save you time.
Step 4: Money is sent to your account
Our advisors will guide you through all the available loan options so you can make a better business decision. No hidden fees, no language you can’t understand. Just complete transparency. Funds are deposited to your account within a day.
Eligibility Requirements for Minorities to Get Approved
When you apply with Clarify, we consider you family — and do everything needed to get you approved fast. Our streamlined process for minorities factors in just three things. Here is what you need to be eligible for a business loan:
1. Credit score over 550
You can get approved for a minority loan even with bad personal credit. We recommend you have a credit rating of 550+. The higher your score, the better the APRs and loan terms you get from alternative lenders.
2. Have been in business for 6+ months
We recommend that your minority-owned business has been operational for 6 months or more. The longer you’ve been in business, the more confident lenders are to provide you operational capital.
3. Average monthly revenue over $10,000
Your current cashflow helps lenders decide on the maximum amount of much capital you can borrow. The higher your revenue, the more you can borrow. As such, we recommend that your business should be generating at least $10,000 per month or $120,000 per year on average.
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Types of Minority-Owned Businesses That Can Get Funded
There are no restrictions on which type of business can get funded by Clarify Capital. We have financed over 10,000 companies and here are just a few of them:
- check Construction
- check Trucking & transportation
- check Medical & healthcare
- check Retail
- check Restaurants & bars
- check Manufacturing
- check Automotive
- check Professional services
- check Technology
- check ... and many more!
How Minorities Utilize Financing in Their Businesses
Having the required working capital needed to handle expenses is critical for the success of a minority-owned business. Here are the most common ways minority entrepreneurs use their financing:
- check Buy or repair equipment
- check Store renovations and improvements
- check Taxes & payroll
- check Marketing & advertising
- check Hiring more employees, education, and training
- check Open up a new location
- check Pay for emergency repairs
- check Operating expenditure
- check Pay rent for office space
- check Manage unanticipated business expenses that arise
- check Refinance any existing debt you have
- check Short-term operational expenses
- check Overcome gaps in payables vs. accounts receivables
- check Explore new growth opportunities
- check Bulk material purchases
FAQ about Minority Business Loans
We take pride in bringing simplicity and clarify to online small business loans. Here are the questions that we get asked the most by minority business owners before they get funded:
What credit score do minorities need to get approved?
We recommend a minimum credit score of at 550. The higher your score, the better APR and loan term lengths you get from alternative lenders.
How long does it take for minorities to get approved and funded?
You can get funded within 24 to 48 hours. The online application process takes 2 minutes. You can speed up the funding process by keeping 3 months of bank statements handy after you complete the online application. Our dedicated advisors reach out to you and walk you through your available options and finalize the underwriting process.
How can minorities qualify for a small business loan?
With the highest approval rate for minorities, all you need to know is three things: your average monthly revenue, credit score, and when you started the business. Our network of 75+ lenders compete to offer you the best rates and terms.
Do minorities need a downpayment to get a business loan?
No, minorities don’t need a downpayment to secure funding.
How much can minorities borrow?
The amount of working capital you qualify for depends on your monthly revenue. You get multiple offers from lenders once you fill out the simple online application.
Do minorities need collateral for a short-term loan?
No, minorities don’t need to provide any collateral or personal guarantee to get approved.
Are business loan payments tax deductible for minorities?
Yes, the IRS allows you to deduct any interest paid on your business loan when you file taxes. This lowers your cost of the loan even further.