Loans for Native American, Native Hawaiian and Alaska Native business owners

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Ask a Lender
September 26, 2017


Key Points

Loan resources for minorities

  • State and federal governments have resources to help Native Americans, Native Hawaiians and Alaska Natives to secure business loans.
  • The Small Business Administration has resources for Native Americans, Native Hawaiians and Alaska Natives to help grow their businesses.
  • Native Hawaiians have resources unique to them through the Office of Hawaiian Affairs and nonprofit organization Hi’ilei Aloha.

Native Americans are nearly twice as likely to live in poverty, and face greater unemployment than other Americans. Unsurprisingly, these obstacles can make it difficult for Native Americans — as well as Native Hawaiians and Alaskan Natives — to qualify for loans, whether it’s to purchase a home, buy a car or start a business.

Despite these challenges, many organizations exist to help Native Americans, Native Hawaiians and Alaska Natives qualify for financing to start or grow a business, in addition to providing other resources to support entrepreneurship.

Business loans for Native Americans, Hawaiians and Alaskans

The Small Business Administration (SBA) is a federal agency that provides support to small businesses and entrepreneurs. The SBA’s Office of Native American Affairs is charged with helping Native Americans, Alaska Natives and Native Hawaiians develop or expand small businesses.

One of the office’s services is providing free technical assistance to businesses in a variety of fields, such as marketing, strategic and operational planning, financial analysis, opportunity development and capture, contract management, and compliance.

Another resource is the Bureau of Indian Affairs’ Division of Capital Investment, which manages an Indian Loan Guarantee, Insurance and Interest Subsidy program. The program helps Native American borrowers qualify for business financing. The program was created as part of the Indian Financing Act of 1974, which aimed to “reduce the disparity between business capital available to Indian and non-Indian businesses.”

The loans are funded by non-government lending institutions, but up to 90 percent of the loan amount is guaranteed or insured by the federal government. The loans may be used for a variety of purposes, including operating capital, equipment purchases, business acquisition and refinance, building construction and lines of credit.

The maximum loan guaranteed for individuals is $500,000. The program can guarantee larger amounts for tribes, tribal enterprises or business entities, but guarantees for such loans are subject to certain limitations.

SBA 8(a) Business Development Program

Native Americans, Hawaiians and Alaskans all may take advantage of the SBA’s 8(a) Business Development program. The program helps qualifying minority-owned businesses grow their businesses through counseling, training workshops and management and technical guidance. The program also provides access to government contracting opportunities.

The program is designed for business owners who have experienced social or economic disadvantage. The SBA lists Native Americans and Asian Pacific Americans as two groups presumed to be socially and economically disadvantaged. Individuals not a member of a group presumed to be economically disadvantaged can still qualify for the 8(a) program, but must provide “substantial evidence and documentation that demonstrates that they have been subjected to bias or discrimination and are economically disadvantaged,” according to the SBA.

Business loans for Native Hawaiians

Native Hawaiians can take advantage of the Hua Kanu Loan, offered by the state-run Office of Hawaiian Affairs.

The Hua Kanu Loan was created in 2013 and is available for established businesses owned by Hawaiian residents. Highly-qualified applicants are eligible for loans between $200,000 and $1 million. The loans are repaid over seven years. Recipients of the loan can choose to receive the money as a lump sum or a line of credit. The annual percentage rate (APR) on the loan ranges from 4-6.25 percent.

Applicants must be Native Hawaiians; this is verified with a birth certificate, OHA Hawaiian Registry Card, or a Department of Hawaiian Home Lands or Kamehameha Schools verification letter.

Another resource for Native Hawaiians is Hi’ilei Aloha, a nonprofit sub-entity of the Office of Hawaiian Affairs (OHA), created to “identify, promote, develop, and support culturally-appropriate, sustainable opportunities that benefit Native Hawaiians.”

The organization carries a broad mandate, which includes economic development activities, and efforts to assist Hawaiian nonprofit organizations and businesses.

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