Scraping together capital to start a business is a feat for any entrepreneur. But obtaining funding for an LGBTQ-owned business can be more challenging due to discrimination that’s perfectly legal, says Jonathan Lovitz, senior vice president of the National LGBT Chamber of Commerce (NGLCC).

“You could be married in all 50 states, but still fired in more than half of them if you put your partner’s photo on your desk,” he says. “If you’re a business owner, some of the more direct implications include if you go into a bank to try to get a loan or to seek credit, you’re only protected from discrimination in those banks in less than 15 states.”

Funding challenges for LGBTQ-owned businesses

In addition to lacking legal protection from discrimination in many states, the LGBTQ community is also more likely to struggle with financial instability, with higher rates of poverty and homelessness—and lower income—than the general population. 

There have been efforts to reduce those barriers to LGBTQ entrepreneurship. Lovitz says if the Equality Act is passed by Congress, many of the discriminatory problems LGBTQ business owners face will be rectified. (The House of Representatives passed the bill in May, but it’s considered unlikely to make it through the Senate.) 

However, even if the Equality Act does pass, “it doesn’t change the fact that LGBT entrepreneurs often feel like there is a lack of immediate resources available to them, because those resources are often concentrated in certain regions and communities,” Lovitz says.

“But,” he adds, “thanks to the power of the internet and its ability to connect people—and the advocacy of NGLCC and others—there are more and more business resources available directly to the entrepreneurs wherever they are.” 

Here are a few places LGBTQ entrepreneurs looking for funding can start.

8 funding options for LGBTQ entrepreneurs

1. Seek out microlenders

There are organizations that offer microloans specifically for small businesses, particularly disadvantaged or minority-owned ones. One such organization is Accion, which offers loans starting at $300. Another is Opportunity Fund, which has loans starting at $2,600 and focuses on businesses that have difficulty accessing traditional credit. 

Lovitz also notes that traditional banks are getting better at helping LGBTQ businesses and understanding their unique challenges. 

“Most of the major banks are NGLCC partners and top scorers on HRC’s Corporate Equality Index,” Lovitz says. “They’re creating not only LGBTQ-inclusive training for their advisors and investors, but often times hiring direct LGBTQ market specialists at a lot of these banks, because they know not only are individual investing and family planning needs different, but our business needs are different.” 

2. Try online lenders

Nowadays, there are also numerous online lenders, whose loans are often easier and faster to get than a government or bank loan—though the interest rates can be higher.

Take a look at online lenders such as OnDeck, Funding Circle, or even Kabbage, which offers a unique business line of credit. Lovitz points out that LGBT-owned businesses used to be limited by geography, but online access to loans and other forms of funding can help entrepreneurs in areas that are less LGBTQ-friendly.

3. Turn to CDFIs

Community development financial institutions (CDFIs) are private organizations that are fully focused on lending to low-income or disadvantaged individuals and businesses in their communities.

CDFIs can come in four forms: banks, credit unions, loan funds, or venture capital funds. If you aren’t able to qualify for a business loan at a traditional financial institution, find a CDFI near you.

4. Join StartOut

This nonprofit for LGBTQ entrepreneurs offers many resources, including an investor portal that connects LGBTQ-owned startups with investors. If you pay for a premium membership ($125 annually), you get access to the portal and can post about your business to promote it and potentially obtain funding from accredited investors.

Lovitz, who previously served as acting executive director of StartOut, says the organization provides numerous mentorship opportunities and helps LGBTQ business owners find access to capital.

5. Look for angel investors

Gaingels, an LGBT-owned and operated angel investing syndicate, is the first of its kind, Lovitz says, and it was recently certified by the NGLCC. It provides “growth capital and expertise for companies that have at least one LGBT founder, senior C-level executive or board member,” according to the website, and its companies raised more than $250 million in funding in 2018.

Business owners present to Gaingels members, and even if they don’t receive an offer, the organization is keen to offer feedback and introductions.

Another angel investing organization called Pipeline Angels focuses on investing in women and nonbinary femme entrepreneurs.

6. Get NGLCC-certified

In addition to advocating for LGBT-owned businesses, the NGLCC is the only organization that certifies them. Getting NGLCC-certified gives your business a leg-up for networking and landing contracts, but it can also help if you’re seeking funding. While the NGLCC doesn’t directly fund businesses, it can help connect you with lenders that do.

For example, you can work with the NGLCC’s financial service partners, which have programs designed to help provide capital and scaling support for diverse-owned companies, including LGBT-owned, according to Lovitz. 

NGLCC-certified businesses also get access to mentorship, as well as scholarship opportunities to attend the Tuck School of Business’s Executive Education program at Dartmouth. This program equips business owners with the skills and tools they need to get investment ready.

Getting certified can also help your business look better to lenders. “One of the best ways for an LGBT company to gain access to all of the information and resources that are out there for them is to get certified as LGBT-owned,” Lovitz explains, “because that is one of the criteria that many of the banks and other institutions look for to ensure your business is solvent and ready for success.”

7. Attend conferences

Lovitz says attending NGLCC’s conferences provides ample opportunities for small businesses looking for funding. Both NGLCC and other professional organizations have “Shark Tank”-like programs.

“They’re designed to help small businesses get stage time in front of investors, and in the case of our conference in August, there’s $50,000 in cash and prizes on the line for whoever wins our LGBT business pitch competition,” Lovitz says. 

He adds that many lenders attend the NGLCC conferences, including large financial institutions, credit unions, and microloan institutions, so LGBT-owned small businesses have the opportunity to connect with them and learn about their options.

At NGLCC’s upcoming conference, MassMutual, the Massachusetts-based life insurance company, is going to have office hours with financial planners to help LGBTQ business owners see where they stand financially and determine what they need to obtain funding, Lovitz says.

The conference will include “several tracks focused on investability, on being prepared for what you need to scale and grow with capital infusion,” he says.

8. Join your local LGBT business chamber

If your city or region has an LGBT business chamber of commerce, join it. It will not only connect you with local businesses and resources—which might include financial institutions—but there are numerous educational opportunities. 

The NGLCC has over 50 local affiliate chambers across the country, Lovitz says, and they offer educational programming for members, which often includes financial literacy and investability as topics.

Fortunately, there are an ever-increasing number of resources to help LGBTQ-owned businesses access capital and grow successfully—and other promising signs of progress, too.

“Banks and lending institutions will realize that it’s their obligation and in their fiscal best interest to make sure that more and more of our businesses succeed with their help, so they can be part of that rich american LGBT economy, which is over $1.7 trillion dollars in GDP impact,” Lovitz says.

As the LGBT community becomes more visible and economically successful, he believes these positive trends will only continue to grow.

Emily Starbuck Gerson Emily Starbuck Gerson is a freelance writer with over a decade of journalism experience. She's currently based in San Antonio, Texas, and specializes in writing about personal finance, small business, and LGBTQ issues.
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