Losing the Race Race? Don’t Let Your Background Affect Your Business Loan Eligibility

Losing the Race Race? Don’t Let Your Background Affect Your Business Loan Eligibility
Reading Time: 3 minutes(Last Updated On: June 7, 2018)

Racial discrimination; it’s one of those ugly things that pops its head up every now and then and, unfortunately, when it comes to the world of lending, economic racism can be found lingering.

It’s hard enough getting a small-business loan. It’s even harder if you’re not white to get minority business grants.

Despite 50 years passing since the federal Fair Housing Act banned racial discrimination in lending, African-Americans, Latinos and pretty much anyone who isn’t translucently white is still commonly denied mortgages and business loans. Here we’ll delve into the stats and how to gain fair treatment…

Unequal Access to Small Business Financing


It’s a real shame that a growing business can face setbacks and dwindling capital access purely based on their ethnicity and gender. But it happens. Often.  

Research by Sarah Harkness suggests that lenders assess their borrowers based on cultural stereotypes and the borrowers’ status. In an eye-opening experiment, Harkness evaluated a series of loan applications whose race and gender were tampered with. Despite the applicant’s having identical financial histories, the results frustratingly show that race and gender “significantly affect lenders’ funding decisions because they alter lenders’ status beliefs about the applicants”, making gaining small business loans for minorities an uphill battle.

In fact, a 2017 governmental service report on the availability of credit to small businesses, found that less than 47% of black-owned businesses seeking finance from the bank were funded. This failure rate was highest among all categories by a whopping 10%! Female-owned firms were also more likely to be turned down than their male counterparts despite external factors such as finance and business health being of similar levels. Minority business grants should be on par with the rest of the world, but the numbers speak for themselves.

The blatant prejudice is there – it’s black and white, quite literally. So what can you do to avoid this?


Avoid Racial Discrimination: Loans for Minority-owned Businesses


If one of the most consistent relationships in the lending market, particularly when it comes to the bank, is the differential treatment of Black, Hispanic and female borrowers, it begs the question, what can these less-favored groups do to increase their chances of getting their hands on a loan? The answer is simple – look to the future. Move far, far away from the old-school face-to-face interactions of the bank and not to mention all of that paperwork. Not only will you be more likely to get the loan you deserve, but the trees will be eternally grateful too.

So what do we mean by ‘look to the future’ when looking for small business loans for minorities?

Let’s Get Digital, Digital ♪♫♬


Loans for minority-owned businesses are hard to come by, but not in the digital lending landscape.

Using an AI-powered marketplace that’s 100% online – it’s perfect for providing business loans for minorities. You can now get a loan for your small-medium business based on the health of your business alone. With none of that gender and racial bias malarkey.

Become offers such a technology whereby businesses are matched with relevant lenders (at no cost), purely based on the length of time the business has been open and the financial health of the company. There’ll be no shady questions regarding your ethnicity, and certainly no gender inequality.


When it comes to the race and/or ethnicity of a given applicant, at the end of the day, it really has no impact on a candidate’s viability. Alternative lenders are of a new, modern class of business, using methods that are changing the nature of the industry – for the better. Those companies that have embraced the digital world cut the need for face-to-face interactions are eradicating the ‘issue’ of race altogether with regards to loan approval. Business owners should be provided with an equal opportunity based entirely on the health of their business.”
– Eden Amirav, Co-Founder and CEO, Become.


If you’re wondering why there’s ‘no cost’ and how this is even possible, think of Become as a matchmaking service, matching you, the borrower, with lenders that are best suited to your needs. It’s that simple.   


Click here to see if you’re eligible for a loan – fair treatment guaranteed.

Business loans for minorities are clearly a big issue. Have you experienced racial and gender biases when applying for a loan? Tell us about it – we want to hear your story. Comment in the section below.

Disclaimer: The above information is of a general nature. Before receiving a business loan you should consider the loan agreement and finance documents provided by the lender, and whether the loan is suitable for your business.
Disclaimer: The information contained in this article is provided for informational purposes only, should not be construed as legal advice on any subject matter and should not be relied upon as such. The author accepts no responsibility for any consequences whatsoever arising from the use of such information.