Starting a new business is no easy task. Even after you’ve spent countless hours coming up with your product or service, building your team, and constructing a comprehensive business plan, all of this work is useless until you’ve secured the necessary funding . Unless you have a large amount of capital sitting in the bank, chances are you’ll have to receive a business loan or grant to get your business off the ground. Furthermore, having this large amount of capital is much less common amongst minorities, so securing the necessary funds often poses a greater hurdle for non-white business owners. In this article, we’ve compiled a list of resources that are specifically targeted towards minority small business owners and are intended to bridge the financial gaps that exist in our economy. While applying for business grants is often a long and arduous process, the financial help that they provide can be invaluable for those looking to pursue their business dreams.
For a small business to be considered a Minority-Owned Small Business, the business must be 51% owned by minority individuals. One or more minority individuals must also run management and daily business operations. The SBA’s recognized minority demographics include African Americans, Asian Americans, Hispanic Americans, and Native Americans. Furthermore, these businesses must have no more than 500 employees. Although minority-owned businesses make up nearly 30% of all American enterprises, minorities are 3 times more likely to be denied business loans. This is why grants from both the government and non-profit organizations play such an important part in helping minority-owned small businesses get started.
Grants are a great financial tool since, unlike business loans, they don’t have to be paid back and don’t accrue interest. Furthermore, being backed by an institution that provides you with the grant can add prestige to your business and can be used in promotional materials. However, grants do come with their share of downsides as well. In most cases, applying for a grant is a complicated and time-consuming process, so they aren’t ideal if you need a quick financial solution. Also, grant money often comes along with lots of strict guidelines and regulations that your business will have to follow. Lastly, while grants may give you the boost you need to get started, you aren’t guaranteed to receive more money after your initial grant has run out.
While this list is not a comprehensive list, the organizations listed below provide great opportunities for minority small businesses to receive the financial help they need. Additionally, not all of these grants are exclusive to minorities; however, they should still be considered as they assist small businesses of all kinds.
The National Association for The Self Employed or the NASE grant accepts applications year-round so it is a great option for all small businesses looking to get some financial help. The NASE developer grant rewards small business owners up to 4,000 dollars, so while this may not be enough to take care of all your finances, it is a great resource to help cover a specific funding need. To apply for the NASE grant, you’ll first have to become a member of the NASE, which costs roughly $10 per month. However, being a member of the NASE comes with a fair amount of benefits besides qualifying you for the grant. The NASE gives members direct access to business experts, benefits, and consolidated buying power normally only available to large corporations.
The MBDA is primarily for minority-owned small businesses looking to break into the public sector since it exists to help business owners connect with federal contracts and other financial resources. While the MBDA does not provide grants itself, its extensive database will help you find and apply for grants that are targeted towards your specific business. Furthermore, Just like the NASE, the MBDA provides resources to help new business owners learn invaluable skills and receive support such as access to capital, marketing assistance, and legal aid. The NASE has physical business centers across the country, which provide even more services to help minority-run small businesses succeed.
While the FedEx Small Business Grant Contest is not directly targeted towards minority-owned small businesses, it still makes a list due to the high prize amount. Though the exact amount varies from year to year, the top reward was $50,000, while the second and third place winners received $30,000 and $15,000 respectively. In addition to a cash prize, winners receive thousands of dollars worth of FedEx printing services.
The Asian Women Giving Circle or ( AWGC ) exists to promote the art culture of Asian American women and raise awareness of the critical issues that affect the everyday lives of Asian American women, girls, and families. Grants are awarded to community organizations and filmmakers, musicians, visual artists, and other kinds of artists whose work revolves around progressive political and social change. 5-8 grants are given out per cycle, with a maximum grant amount of $15,000
The Coalition to Back Black Businesses fund was formed in response to the huge financial hit caused by the covid-19 pandemic. The initiative gives grants to specifically black-owned small businesses (3-20 employees) located in economically vulnerable communities. Furthermore, the businesses must have been financially hurt by the pandemic. Grants are valued at $5,000 and are distributed on a rolling basis through 2023. In addition to prize money, grantees will receive mentorship, online resources and educational materials, and an opportunity to receive a $25,000 enhancement grant.
Rebuild the Block, or RBT , aims to bridge black business owners with reputable resources in order to build generational wealth and capital within the black community. One way that RBT achieves this is through its small business relief fund. Applicants must describe how their business was affected by Covid-19 and today’s climate. Applicants must be black-owned small businesses and have launched no later than January 1, 2020. The RBT grant cycle is three months long, and RBT has awarded 25 grants to 25 companies across 12 states so far.
SoGal is a global platform with the mission to close the diversity gap in entrepreneurship and venture capital. The SoGal Black Founder Start-Up Grant grants $5,000 and $10,000 grants to black women and nonbinary entrepreneurs . In addition to the prize money, grantees will receive financial advice and assistance, allowing them to continue their fundraising pursuits and scale their business. Despite black women being the fastest-growing demographic of entrepreneurs, they receive less than .5% of venture capital funding. The SoGal Black Founder Start-Up Grant fights the perpetual discrimination against black female business owners and the barriers they face when raising capital.
The First Nation s Development Institute is an organization that provides financial grants and technical assistance, and training to Native Americans. First Nations began its grant-making program in 1983 and has become the top-rated American Indian non-profit in the country. Over the years, First Nations has given out $46 million worth of grants to Native American organizations and projects. You can see a comprehensive list of all available grants on the First Nations’ website.
While grants.gov isn’t a grant in itself, it is a fantastic resource for businesses looking to assess all of their grant options. Grants.gov’s database consists of over 1,000 grant opportunities between the 26 federal government grant-making agencies. Although most of these grants are for healthcare services, scientific research, education, and social services, the database does include grants specifically for minority business enterprises. To apply for grants through Grants.gov, applicants must have a DUNS number and create a Grants.gov account. Furthermore, many cities have business service centers that can help entrepreneurs find local grants.
Despite making up nearly 30% of America’s enterprises, minorities are three times more likely to be denied business loans when compared to non-minorities. This is why grants, particularly those from organizations that provide aid for minority-run businesses, are such an important part of the minority-owned small business journey. By increasing the growth of minority-owned small businesses, the US stands to generate billions of dollars worth of annual income and create a million jobs. While this is not a comprehensive list, we hope that one of the organizations above will suit your business needs. Seek Capital can help you find the best credit cards or loans to help turn your business dreams into reality for additional funding. Of course, the best financial solution for you will depend on the nature of your business and the sort of projects that you intend to fund. Sources: NASE | About Us MBDA | Minority Business Development Agency FedEx | 2021 FedEx Small Business Grant Contest We Back Black Businesses | Coalition to Back Black Businesses Rebuild the Block | Our Mission & Vision First Nations | Current Grant Opportunities Grants.gov | Convenience Comes to Federal Grants Asian Women Giving Circle | About SoGal | Black Founder Startup Grant