Minority Small Business Grants: A Guide for Leaders

Grants are a great way to get seed money for your business or fund expansion without taking on debt. Many organizations offer special grants for minority-owned businesses to support their development.

 

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What is a minority small business grant?

Minority small business grants are financial assistance for businesses owned by members of a protected group based on factors like race and gender. Business owners who receive minority small business grants do not have to repay the money, but the funds might have conditions attached that they must be used for a specific purpose. Minority small business grants are designed to uplift and empower business owners who belong to a marginalized group that may have been previously underrepresented in their field.  

Read more: Minority Small Business Grants: A Guide for Leaders 

 

Benefits of minority small business grants

Minority small business grants have benefits for both the business owner and their community. Businesses rely on capital to establish their products and branding, but social inequity can add additional financial challenges for minority entrepreneurs. According to the Small Business Association, white small business owners are approved for more loans at higher amounts than non-white business owners. Geographic inequity can also make it harder for minorities to find business resources in their community network. Small business grants help fill this gap by providing a clear channel for Black, Hispanic, Native and Asian business owners to fund their business.

 

Empowering women and minorities to start their own business through grant money helps break a cycle of inequity and boost the local economy, especially in disadvantaged areas. Minority grants help a diverse range of professionals participate in the economy, bring new innovations to established industries and serve new markets using personal insight.

Related: Business Grants For Women: Key Opportunities 

 

Who qualifies for a minority small business grant?

Minority small business grants can be available to a range of candidates or for a specific intersection of identities. For example, one grant may offer small business funds for any person of color, while another provides grants to black women in the tech industry. Some of the classifications for minority small business grants might be:

  • Ethnicity
  • Religion
  • Race
  • Socioeconomic status
  • Citizenship status
  • Sexuality
  • Disability
  • Profession

Related: ‘Socially and Economically Disadvantaged’ in Small Business

 

Minority small business grant opportunities

Organizations across the country give out millions of dollars in minority small business grants each year. Here are some of the places minority entrepreneurs can find small business grants to start or grow your business:

 

Grants.gov

Grants.gov is a website database that collects thousands of federal, state and local small business grants that you can sort by eligibility requirements, making it easy for business owners to find grants that apply to their business. The small business grants on Grants.gov usually fit into a niche such as research or community organizing. In addition to the application portal, Grants.gov has resources to help you gather application materials and find grants that you have a good chance of receiving.

 

First Nations Development Institute

The First Nations Development Institute has connected indigenous entrepreneurs with over $36.7 million in grants. They offer mentorship, technical resources and significant financial support to business owners in different tribes to support community development and preservation.

 

National Black MBA Association

The Scale-Up Pitch Challenge sponsored by the National Black MBA Association gives out grants up to $50,000 to black entrepreneurs running a startup business. Applicants must be MBMBAA members and prepare a three-minute pitch. Winning pitches present at the organization’s national conference where funds are distributed.

 

Minority Business Development Agency

The Minority Business Development Agency is a chapter of the US Department of Commerce that offers grants and loans for minority groups. In addition to hosting grant competitions, the MBDA has physical business centers throughout the United States where business owners can take advantage of financial counseling and other guidance.

 

Amber Grant Foundation

The Amber Grant is a monthly grant for women-owned businesses. The foundation gives out $4,000 each month to grant recipients and an annual $25,000 award. You can apply for an Amber Grant using a simple online form where you explain your business or idea and describe how you would use the grant to grow your company.

 

How to apply for a minority small business grant

Follow these steps to find and apply for a minority small business grant:

 

1. Seek certification

Build a strong professional network that will connect you with minority small business loans by getting certified as a Minority Business Enterprise (MBE) by the National Minority Supplier Development Council. You do not have to be a certified minority-owned business by all minority small business grants, but it can be a helpful tool. 

 

2. Create a plan for funds

Your business plan is usually a significant part of a small business grant application. Think about how much money you want to grow your business and create a clear outline for how you would spend those funds. Grant organizations look for applicants who have a strong business plan that they can reasonably execute.

 

3. Search within your niche

Look for niche grants that have less competition to give your business increased visibility at the organization giving out the grant. Searching for keywords related to your business can help you find smaller grants that get less publicity and recognition.

 

4. Prepare business documents

Grant applications require certain paperwork to process your application and confirm that you have legitimate business within their qualifications. Gather proof of business address and ownership to submit alongside your business plan.

 

Frequently asked questions about minority business grants

 

How do I get a minority business grant?

To strengthen your application to a minority business grant, go through several drafts of your business plan and application materials to make sure they are as strong as possible. Research the organization providing the grant and tailor your application materials to their values as a way to show that your business will use the grant money to support their overall mission in some way.

 

What qualifies as a minority-owned business?

Businesses certified as minority-owned businesses must be at least 51% owned and run by a racial or ethnic minority in the United States.

 

What is the difference between a grant and a loan?

Grant recipients do not have to pay grant funds back, while people who take out a loan expect to pay it back, often with interest.

 

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