How to Get Funding as a Black Small Business Owner

Published on August 6, 2025 | Webster Bank

For Black business owners and entrepreneurs, systemic barriers and disparities in capital access may make it tough to get funding. You may feel like you’re swimming against the current while everyone else is floating down the river. Fortunately, there are several avenues you might explore to help secure funding for your business. Here are seven categories of possible funding sources to consider.

1. Bank Loans

One good place to start your search is with regional banks and credit unions that offer small business loans. To improve your chance of approval, be prepared to present a solid business plan, convincing financial projections, and sufficient collateral for the loan. Be sure to ask whether the bank has specific programs that support minority-owned businesses, as these could boost your chances and might require less collateral.

2. Small Business Administration Loans

The Small Business Administration (SBA) is the go-to place for small business finance. This organization offers many loan programs, including the 7(a) Loan and Community Advantage programs.¹ The 7(a) Loan Program is the most common loan offered by the SBA. The program provides funding for applicants seeking loans between $500,001 and $5 million. The SBA’s 8(a) Business Development Program also provides help to socially and economically disadvantaged businesses, including Black-owned businesses.

3. Community Development Financial Institutions

Community Development Financial Institutions (CDFIs) are organizations that provide financial services to underserved communities. They offer loans, microloans, and other financial products to minority-owned businesses. CDFI products generally have more flexible terms and eligibility requirements than traditional bank loans. For example, you may be able to get a loan even if your credit score isn’t great, your collateral is modest, or you need extended terms to lower your payments because you cannot afford a larger monthly payment.

4. Minority Business Development Agency

The Minority Business Development Agency (MBDA) is part of the U.S. Department of Commerce. It provides support and resources for minority-owned businesses. One of the biggest sources of support is the help offered to access capital through grants, loans, and other financing options.

5. Venture Capital and Angel Investors

Seek out venture capital firms and angel investors that focus on supporting minority entrepreneurs. These investors are always looking for new and innovative investments and are skilled at finding diamonds in the rough. You could connect with venture capitalists and angel investors by attending networking events, pitch competitions, and conferences, particularly those focusing on Black-owned businesses.

6. Crowdfunding

Consider using crowdfunding platforms like Kickstarter, Indiegogo, or GoFundMe to raise funds from your supporters—or even strangers. Craft a compelling campaign highlighting your business idea, mission, and impact to attract backers. Social media is your friend when it comes to crowdsourced funding.

7. Business Incubators and Accelerators

Join business incubator or accelerator programs that provide funding, mentorship, and resources to early-stage startups. Some programs, such as those focused on minority entrepreneurship, may offer grants or investment support.

Important Disclosures:

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.

All information is believed to be from reliable sources; however, LPL Financial makes no representation as to its completeness or accuracy.

This article was prepared by WriterAccess.

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Footnotes

¹ Types of 7(a) loans
https://www.sba.gov/partners/lenders/7a-loan-program/types-7a-loans