Minority Business Direct Loan Program

About this programme

The Minority Business Direct Loan Program (MBD Loan Program) is a below-market-rate business loan program for existing minority-owned businesses in Ohio that are three years or older. It is run by the Minority Business Development Division (MBDD) of the Ohio Department of Development.

The program exists to promote economic development, business expansion, and job creation or retention by giving minority-owned small businesses an alternative source of financing when they do not have ready access to traditional lenders.

How it works

Loans range from $45,000 to a maximum of $1,000,000, depending on project merits and funding availability, at a fixed 1.5% interest rate for the life of the loan (rising to a default rate of 8% if the loan goes into default).

Terms run up to 10 years for machinery and equipment and up to 15 years for owner-occupied real estate, with a blended term of 12.5 years possible when a loan covers both. There are no prepayment penalties.

The borrower must contribute at least 10% equity toward project purchases. MBDD contributes a maximum of 75%, with the remaining 15% coming from a bank, another financial institution, another third party, or the borrower.

Development takes a first lien position, or shared first lien position, on all collateral, and each owner with at least 20% ownership must give a personal guarantee.

There is a $300 application fee and a commitment fee of 1.5% of the loan amount. MBDD does not pull personal credit reports.

After a Preliminary Application Form, MBDD staff interview interested applicants to check general eligibility, then send a link to the full application to eligible applicants. Approved applications go to the Minority Development Financing Advisory Board (MDFAB), which meets on the fourth Tuesday of the month (November and December are combined into one meeting on the first Tuesday of December), then to the Controlling Board for final approval.

Real estate purchases are fully funded at closing. Renovations, leasehold improvements, and equipment purchases are funded through a multiple reimbursement process. Loan proceeds are disbursed electronically through OhioPays.gov, and borrowers must have a valid bank account linked there for repayment via ACH.

Who can apply

The business must hold State of Ohio MBE certification or Ohio Minority Supplier Development Council MBE certification.

The business must have its principal place of business and operations in Ohio, and must demonstrate three consecutive years of revenue.

The proposed fixed-asset expansion or retention project must create or retain jobs for Ohioans.

The applicant, its principals, or any prior business owned by its principals cannot have previously defaulted on financial assistance from MBDD or Development, cannot have filed Chapter 7 or Chapter 11 bankruptcy in the past three years, and cannot be delinquent on federal, state, or local taxes or in default on existing loans. A state tax search must come back clear before the application can move forward, though clearing it does not guarantee approval.

Ineligible businesses include, but are not limited to, investment real estate, residential home lending and leasing (excluding nursing homes and assisted living facilities), multi-level marketing, adult entertainment, gambling, bars, breweries, tap houses, liquor stores, rent-to-own, and check cashing.

How to apply

1. Submit a Preliminary Application Form to MBDD.
2. MBDD staff interview the applicant to confirm general program eligibility.
3. Eligible applicants receive a link to the full application, which asks for information on the loan request, the company, its ownership structure, principals, and guarantors, plus supporting documentation.
4. MBDD staff review the application internally, then recommend it to the Minority Development Financing Advisory Board (MDFAB). The borrower must attend the MDFAB meeting; MBDD notifies applicants of the date, time, and location.
5. If MDFAB approves, the application goes to the Controlling Board for final approval. Approval is communicated to the borrower in writing; if denied, MBDD notifies the applicant in writing with the reason.
6. Loan closing documentation is completed by outside counsel, scheduled at a time acceptable to both borrower and counsel, and loan proceeds are disbursed electronically after closing.

Documents you’ll typically need

• Tax returns and transcripts, bank statements, income statements, balance sheets, and accounts receivable/payable aging reports
• Projected financial statements and proof of general liability/hazard insurance and required industry licenses or certifications
• An executive summary and/or business plan
• Personal tax returns and personal financial statements for owners
• Owner resumes showing business experience and skillset
• Third-party cost estimates supporting project costs

Frequently asked

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Reviewed 2026-09-25. Programmes change, so check eligibility, amounts and deadlines on the official page before you apply. CapEasy is a private firm and is not part of any government body.