October 7, 2025

2 In 5 Black-Owned Business Loan Applications Were Denied, Study Finds

Working man

Black-owned businesses faced the highest rejection rate for loans in 2024, according to a recent analysis by LendingTree. Nearly 2 in 5 (39%) of Black founders were denied when applying for loans, lines of credit, or merchant cash advances. Hispanic business owners also faced high levels of rejection, with a 29% rejection rate. Comparatively, only 1 in 5 (18%) of white-owned businesses experienced rejection.

Black-owned businesses facing loan rejections

Black-owned founders have always had to work significantly harder than their white peers. These latest statistics underscore the challenges faced by Black founders in securing the necessary capital to run a business.

A 2024 report from The Alliance for Entrepreneurial Equity found a troubling decline in venture capital and other forms of funding for Black-owned businesses. The report reveals a decline in venture capital and other forms of funding for Black-owned businesses following a brief surge after the 2020 George Floyd uprisings. 

Black-owned businesses are often categorized as high-risk investments, which further complicates their ability to secure traditional financing. They are frequently shut out of government contracts and must resort to non-traditional means to find capital. 

Other key findings in the report

Around 1 in 5 firms overall (21%) were denied funding last year, a figure that has remained the same since 2023. Small businesses were more likely to experience financial rejection, facing a 1 in 4 (26%) denial rate, which is five times higher than that of larger firms. New York had the highest denial rate at 29%, with Georgia and Texas tying for second at 28%.


Image: Troy Spoelma

Habiba Katsha

Habiba Katsha is a journalist and writer who specializes in writing about race, gender, and the internet. She is currently a tech reporter at POCIT.