Funding for Minority-Owned Businesses: Programs and Options

What funders actually evaluate

Funders look at revenue, time in business, credit and bank activity. Owner demographics are not part of the evaluation at ROI Funder.

Every application at ROI Funder is considered on business performance: monthly deposits, how long the business has operated, credit and existing obligations. There is no special approval for any group, and no group is treated differently. Equal treatment in credit is also the law under the Equal Credit Opportunity Act.

What owners can control is the strength and clarity of the file, which is where preparation helps.

Resources worth knowing about

The Minority Business Development Agency, SBA resource partners and local development groups offer counseling, networking and sometimes access to capital.

The U.S. Minority Business Development Agency, part of the Department of Commerce, supports minority-owned firms through programs and business centers. The SBA funds SCORE mentors, Small Business Development Centers and Women's and Veterans' centers that serve all owners, and offers loan programs through banks and other lenders. Community development financial institutions, or CDFIs, also lend in underserved areas.

Program details change, so check each agency's website for what is current. Read about SBA loans for how they compare with faster funding.

Certifications and contracts

Certifications such as MBE or the SBA's 8(a) program can open government and corporate supplier contracts if you qualify.

Some cities, states and large companies set supplier diversity goals and look for certified firms. Certifying bodies each have their own rules, fees and paperwork. The SBA's 8(a) Business Development Program has its own eligibility requirements. Certification does not replace strong financials, but winning contracts can grow the revenue that supports funding.

When a contract has long payment terms, a business line of credit can cover payroll while you wait.

A payback example

Test any funding against the added profit it will produce, not just the payment.

This is an illustrative example. A catering company wins a supplier contract that requires $50,000 in equipment and inventory before the first invoice is paid. The contract adds an estimated $8,000 a month in gross profit. A funding cost of $3,000 a month equivalent leaves $5,000. If the customer pays 45 days late, the owner would need extra cash to cover payroll, so a line of credit is worth pairing with the purchase.

ROI Funder shows true cost, payback period and monthly-equivalent payments before you sign.

Which ROI Funder products fit

Working capital and lines of credit cover day-to-day needs, equipment financing covers machines, and SBA loans suit longer plans.

Working capital funds a defined need quickly. Equipment financing usually takes 2 to 7 days. Be wary of anyone who promises special approval based on ownership. Legitimate resources, such as MBDA centers and SBDCs, do not charge for counseling.

What to prepare before you apply

A clean, well-documented file helps any owner, and the steps are the same for everyone.

Gather three months of business bank statements, a clear explanation of any large or unusual deposits, and a summary of existing financing. Keep business and personal accounts separate. Pay down small balances that drag on credit if you can.

Know what you need the money for and what it will earn. A clear use of funds and a simple payback estimate show you have thought it through. If you are not ready, a nonprofit counselor or an SBDC advisor can help you build the file at no cost, and you can come back when the numbers are stronger.

How to apply

Send the online application and three months of business bank statements. ROI Funder considers 500+ FICO, 6+ months in business and $20,000+ monthly revenue.

Approved, complete files can fund the same business day. Applying takes a few minutes, uses a soft credit pull and carries no obligation. Apply online. See also women-owned and veteran-owned business funding.