Minority Grants: What You Should Know
Minorities in the U.S. have always faced challenges when it comes to starting their own business.
A lot of them don’t have the credit history or financial standing to qualify for the expensive financing like bank loans. This is despite the fact that minority-owned businesses contribute more than $1 trillion to the American economy.
Fortunately, there are plenty of government institutions and non-profit organizations that help minority entrepreneurs exclusively. They provide access to minority grants, financial assistance, and affordable loans to help level the playing field.
In this article, we’ll explore the many ways you can get funding as a minority business owner in the U.S.
Options for Minority Grants
The first stop for anyone looking for federal grants for minority business owners is Grants.gov. It’s an online repository that lists down potential grant programs from all government agencies that do so. These include the Small Business Administration and the U.S. Department of Commerce.
With more than 1,000 options available, Grants.gov is the first place to start your research. You can use the search options to narrow down the minority business grants you qualify for.
SBA 8(a) Business Development Program
This is a minority business development program hosted by the Small Business Administration. The goal of the program is to provide equal opportunities to business owners who come from socially and economically disadvantaged sectors of society.
While not a minority grants per se, it does offer exclusive opportunities to work on government contracts. Plus, owners get access to consultation and business support.
The eligibility requirements are stringent, and the application process is long but worth it.
Minority Business Development Agency
The Minority Business Development Agency (MBDA) is a group under the U.S. Department of Commerce that deals exclusively with minority-run businesses.
They act as an intermediary that connects businesses with minority entrepreneur grants and affordable minority loans to start a business. Apart from financing options, the MBDA also gives business opportunities for minority businesses, such as angel investor meet-ups and exclusive contracts.
NMSDC Business Consortium Fund
The Business Consortium Fund is a non-profit organization group affiliated with the National Minority Supplier Development Council (NMSDC) and certified by the U.S. Department of the Treasury.
The fund is one of the most comprehensive development groups for minority-owned small businesses in the U.S. It provides financing options and consulting exclusively to companies certified by the NMSDC, so you need to register your business first to see if it qualifies.
USDA Rural Business Enterprise Grant Program
This is a government grant for minority business startups and other non-minority-owned rural enterprises. The grant amount can be up to $500,000, which you can use for expansion and operations.
To qualify for the grant, your business needs to be located in a certified rural area. It also needs to be a small startup of fewer than 50 employees, with revenues not exceeding $1 million.
Operation Hope Small Business Empowerment Program
Operation Hope’s Small Business Empowerment Program offers a 12-week training curriculum for those in underprivileged areas to start their own businesses. Usually, these are the areas where there is a sizable minority population.
After completing the program, grants for minorities to start a small business become available. Participants also get access to counseling, services, and potential partnerships.
Explore local grants
Aside from national funding, you should also look into local options for minority grants. These are usually less crowded and have faster approval compared to federal grant programs that get thousands of applicants.
Some cities have local business groups that cater to minority-owned businesses. These can give you access to funding and working capital grants. Be sure to explore and connect with any local groups in your neighborhood.
Join grant contests
If you’re a minority with a particularly groundbreaking business idea, entering competitions is a fantastic idea.
There are many different federal and state programs you can enter. One of these is the FedEx Small Business Grant. The contest is for any small business that proves it’s making a significant impact on their community. Grant amounts can be up to $25,000.
There’s also the annual Miller Lite Tap the Future competition that’s exclusively for minority-owned businesses.
Look at alternative funding
Aside from minority small business grants in 2020, you must also consider other sources of financing. Banks are the obvious choice, but there are plenty of other alternatives out there.
Companies like L3 offer a wealth of merchant funding options like business cash advances and secured business lines of credit to help minority owners get off the ground.
Today’s minority businesses have access to funding options more than ever before.
If you’re looking to finance your operations and would like to know more about our funding solutions, apply now for a consultation with us. We’re the alternative many entrepreneurs trust when the banks say no.