There are many grants available for minority-owned businesses. Find out how you can take advantage of these grant programs to start or grow your business.
Minority-owned small businesses face many unique challenges, particularly when it comes to securing capital to start or grow a business. While loans are always an option, many small business owners prefer to forego adding debt to their balance sheet, and others cannot qualify for loans with good repayment terms.
Minority small business grants can be a valuable alternative because they offer funding that does not need to be repaid.
What is a grant?
A grant is a source of funding that does not require repayment; however, it is usually associated with a lengthy and specific application process. A business owner seeking a grant must first check to make sure they meet the eligibility requirements before applying to the grant program.
Once the application is submitted in accordance with the grant program rules, recipients are selected from the many applicants seeking funding.
Filling out a grant application is typically an in-depth process, leading many business owners to hire a professional grant writer to complete the process properly.
Grant funding can help businesses avoid or reduce their reliance on business loans or other sources of funding, such as accepting venture capital. While grants often are considered "free money," they require a significant investment of time and effort, and the funding is never guaranteed.
There are government grant programs available for economic development as well as grant programs created by private organizations and nonprofit organizations.
If you're looking for grant money to fund your small business, keep an eye out for the many grant opportunities available to you.
What is a minority small business grant?
A minority small business grant encompasses a wide range of grants intended to help minority-owned small businesses grow and succeed. Minority-owned businesses come in many different varieties, and there are grants available for many of them. For example, there are numerous business grants for Black women entrepreneurs. Similarly, business grants for Hispanic males are also widely available. Other minority-owned businesses also include women-owned businesses, businesses owned by Indigenous people, and entrepreneurs with disabilities.
There is no shortage of minority small business grants and assistance programs out there. Finding the right one for your business could prove to be challenging, though. This list highlights some prominent minority small business grants, some of which were established specifically to provide entrepreneurs relief due to the impact of the COVID-19 pandemic. Others are focused on economic development in historically marginalized communities.
Minority business grants
We've compiled 10 minority small business grants. The application process for each grant is unique and often takes significant time and effort. Carefully review the application guidelines of each grant program to improve your chances of being selected for funding.
Grants.gov is a running list of more than 1,000 available government grants, including minority business grants. The website compiles grants from more than two dozen government agencies, such as the U.S. Small Business Administration (SBA), the U.S. Department of Agriculture (USDA), and the U.S. Department of Commerce.
To find a grant that's right for your business, use the Search Grants tool on the website to sort through the list of grants by keyword or opportunity number. Once you have located the grant you wish to apply for, click the hyperlinked opportunity number for more detail. There, you will find more information about the specific grant as well as any associated documentation you might need.
To apply for a grant through Grants.gov, you must first register. Then, you will be able to download an application package for the grant you are interested in obtaining. It's important that you are prepared for a lengthy and specific process. For more information, review our guide on how to apply for a government grant successfully.
2. The Minority Business Development Agency
The Minority Business Development Agency (MBDA), operated by the U.S. Department of Commerce, is dedicated to helping minority-owned businesses access the resources they need to grow and succeed.
Grant competitions are regularly changing; visit the MBDA's website for information on the current opportunities. At the time of this writing, the MBDA recently closed the application process for three grant competitions for 2020: the Entrepreneurship Education Program for Formerly Incarcerated Persons Grant; the Enterprising Women of Color Grant; and the Minority Business Enterprise Inner City Innovation Hub Grant.
3. The Verizon Small Business Recovery Fund
The Verizon Small Business Recovery Fund, established in response to the COVID-19 pandemic, offers $10,000 to successful applicants. The fund is specifically focused on providing grants to business owners of color, women-owned businesses, and other underrepresented entrepreneurs.
Visit the website to apply for a Verizon Small Business Recovery Fund grant.
4. The Native American Business Development Institute (NABDI) Grant
The NABDI Grant, funded by the U.S. Department of the Interior's Bureau of Indian Affairs, provides funding to business owners of Native American or Alaskan Native descent. In 2019, the program provided more than $727,000 to 21 indigenous tribes to support economic feasibility studies for specific economic development projects or business startups.
Visit the organization's website to apply for a NABDI grant for your proposed economic development feasibility study.
5. The National Minority Supplier Development Council's Business Consortium Fund
The National Minority Supplier Development Council (NMSDC) provides a grant program known as the Business Consortium Fund, which is intended to support certified minority-owned businesses. To become a certified minority-owned business with the NMSDC, minority business owners must own and control at 51% of the business. Minority business owners include entrepreneurs who are African American, Hispanic American, Native American, Asian-Pacific American or Asian-Indian American.
Through the NMSDC, certified minority-owned businesses can access working capital loans and grant funding through the Business Consortium Fund, an organization of suppliers and vendors associated with the NMSDC. To learn more, visit the NMSDC website.
6. The U.S. SBA 8(a) Business Development Program
The U.S. SBA 8(a) Business Development Program aids small business owners who are economically disadvantaged, providing business development support and consultation support for management.
To qualify, the business must be 51% owned and controlled by an entrepreneur who is economically and socially disadvantaged with a net worth of $250,000 or less. For a more specific definition on what constitutes "economically and socially disadvantaged," see Title 13 of the Code of Federal Regulations.
To apply for support through the SBA 8(a) Economic Development program, you must first be certified by the agency. To do so, visit the agency's website and create a profile. Then, follow the steps outlined to complete the certification process. You will receive correspondence via mail to confirm whether you were approved for certification.
Once accepted into the program, your certification will last for up to nine years. However, it is required that certified businesses complete annual reviews to remain in good standing with the program.
7. The U.S. SBA Program for Investment in Micro-Entrepreneurs
The Program for Investment in Micro-Entrepreneurs (PRIME) provides a variety of grants to small businesses, prioritizing women-owned businesses, economically and socially disadvantaged business owners. These grant opportunities include:
*Technical assistance grant: Offers training and technical assistance to micro-entrepreneurs.
*Capacity-building grant: Extends training and scaling support to micro-entrepreneurs as well as assistance expanding services.
*Research and development grant: Assists research and development efforts as well as the establishment of best practices for technical development in micro-enterprises.
*Discretionary grant: Determined by the U.S. SBA based on whether an organization is consistent with PRIME's goals.
According to the SBA, organizations eligible for a PRIME grant include:
*A micro-enterprise development organization or program that has a demonstrated record of delivering micro-enterprise services to disadvantaged micro-entrepreneurs
*An intermediary, such as a private, nonprofit entity serving micro-enterprise development organizations
*A micro-enterprise development organization or program that is accountable to a local community, working with a state or local government or Indian tribe
*An Indian tribe acting on its own, if the Indian tribe can certify that no private organization or program exists within its jurisdiction
See the PRIME website to apply for a grant through the SBA's PRIME program.
8. The South Asian Arts Resiliency Fund
The South Asian Arts Resiliency Fund, operated by the India Center Foundation, is designed to support South Asian arts workers impacted by the COVID-19 pandemic. The fund will disburse grants up to $2,000, depending on financial need to U.S.-based arts workers of South Asian descent. This includes those in the performing arts, film, visual arts, and literature with heritage from Afghanistan, Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan, and Sri Lanka. Initial funding for the program is $20,000, but the India Center Foundation is soliciting donations to expand the grant program.
To be eligible for the South Asian Arts Resiliency Fund, applicants must be of South Asian descent, work in the arts and demonstrate loss of income due to COVID-19. Additionally, applicants must be at least 21 years old, not enrolled in a degree program, and able to receive taxable income in the U.S. Grant funding could be put toward any artistic project that could be developed, created, and presented within four to six weeks of receiving funding.
9. The USDA Rural Business Enterprise Grant Program
The USDA's Rural Business Enterprise Grant Program offers grants to public entities to offer training and technical support to small businesses with fewer than 50 new workers and less than $1 million in gross revenue.
Unlike many of the other grants on this list, the USDA Rural Business Enterprise Grant is awarded to public entities, such as towns, state agencies, nonprofits, or universities, which then use the grant to provide support to local small businesses within rural communities.
These grants can be used for a wide range of purposes, according to the USDA, including:
*Training and technical assistance, such as project planning, business counseling, and training, market research, feasibility studies, professional or/technical reports or producer service improvements
*Acquisition or development of land, easements, or rights of way; construction, conversion, renovation of buildings; plants, machinery, equipment, access for streets and roads; parking areas and utilities
*Pollution control and abatement
*The capitalization of revolving loan funds, including funds that will make loans for startups and working capital
*Distance adult learning for job training and advancement
*Rural transportation improvement
*Community economic development
*Technology-based economic development
*Feasibility studies and business plans
*Leadership and entrepreneur training
*Rural business incubators
*Long-term business strategic planning
10. Operation HOPE Small Business Development Program
Operation HOPE's Small Business Development Program is designed to help entrepreneurs in low-wealth communities start businesses despite challenges like poor credit, lack of capital, or limited access to financial services. The program includes a 12-week adult education program designed to provide aspiring entrepreneurs with the skills, tools, and knowledge needed to succeed.
Additionally, Operation HOPE established a COVID-19 mini-grant relief program for entrepreneurs affected by business interruptions, credit issues, and debt in the wake of the novel coronavirus pandemic. Visit Operation HOPE's website to apply for the COVID-19 mini-grant.
Minority business grants FAQs
These frequently asked questions shed some more light on choosing a minority business grant and applying for a grant for your small business.
Who qualifies for small business grants for minorities?
Eligibility requirements vary from grant to grant. Carefully review the requirements of each grant you are considering applying for prior to filling out the application.
When it comes to federal grants, a common barometer for eligibility includes "economically or socially disadvantaged." Both terms are defined extensively under Title 13 of the Code of Federal Regulations. To review these definitions, visit the Code of Federal Regulations.
Do minority business owners get tax breaks?
U.S. tax law is nondiscriminatory, meaning there are no special tax considerations for minority-business owners. However, small business owners can take advantage of a range of tax deductions.
How do you become a certified minority business?
To become certified as a minority-owned business through the NMSDC, you must demonstrate that your company is 51% owned, operated, and controlled by an entrepreneur who's ethnicity is at least 25% Black, Asian-Pacific, Asian-Indian, Hispanic or Native American.
Certification requirements for women-owned businesses are similar, although certification is handled by the Women's Business Enterprise National Council rather than the NMSDC.
How does one get a small business grant with bad credit?
Credit scores generally do not factor into grant applications since grants do not have to be repaid. In fact, some small business grants are designed specifically for people from low-wealth backgrounds who might have poor credit, significant debt, or lack access to the capital needed to start a business.
Grantors take into account the eligibility requirements and application of potential grantees rather than their financial stability, like lenders would. Instead, an applicant's suitability in relation to the mission of the grantor organization is what is most important.
Grants are available, if you know where to look
There are countless grants from a wide range of organizations, including government agencies, private businesses, and nonprofits. The first challenge is finding the right grant for you.
Once you've identified grant opportunities suitable for your business's needs, you need to ensure you are indeed eligible and then diligently complete the application process according to the grantor's guidelines.
Grants are a great way to access funding without a repayment obligation. If you qualify for small business grants, you could potentially launch or grow your business without taking on unnecessary debt.
Source: Adam Uzialko/business.com
Date Posted: Sunday, September 27th, 2020 , Total Page Views: 2152
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