Finding funding can be the most challenging part of getting your business off the ground. Sadly, this obstacle can be more difficult for minority-owned small businesses.
Just how difficult?
According to the Minority Business Development Agency, minority businesses with gross receipts less than $500,000 are denied loans at a rate nearly 3 times higher than their nonminority counterparts.
The good news is that minority small business grants can help you fill funding gaps.
The 12 Best Minority Business Grants
In late 2019, the U.S. Department of Commerce’s Minority Business Development Agency announced more than $3 million in funding for American Indian-, Alaska Native- and Native Hawaiian-owned businesses.
Minority business grants don’t stop there. Here are several other grant opportunities to consider:
1. LISC NYC
In light of COVID-19’s impact on commerce, the Local Initiatives Support Corporation (LISC) has dedicated $1 million to fund minority-owned small businesses in underserved communities in New York City.
Grants are awarded in the amount of $10,000, and funds can be used for a variety of needs, including rent, payroll, marketing, employee training and technology. To be considered, businesses need to be owned by a person of minority, have 20 or fewer employees and generate annual revenue of less than $500,000.
2. New Voices
In 2020, this nonprofit organization will have awarded up to 60 grants to women entrepreneurs of color. Through pitch competitions, applicants can win $5,000 to $25,000.
Additionally, after the competition, winners receive skills development training, coaching and business mentoring. To date, New Voices has held 9 pitch competitions, each distributing $100,000 in grant funds.
3. Rebuildtheblock
In an effort to help small black-owned businesses continue amid the coronavirus pandemic, Rebuildtheblock is taking grant applications, with more than 20 awards distributed since June of 2020.
To be considered, the business must have been in operation no later than January 1, 2020. Nationwide applications will be accepted. The funding deadline is the third Friday of each month.
4. Comcast RISE
Comcast has begun offering non-cash awards to minority small business owners in response to the need created by the pandemic. Through its Representation, Investment, Strength and Empowerment (RISE) program, applicants can win a multi-year commitment for the following:
- Marketing consultations
- Creative production
- Media placements
- Technology services
5. National Black MBA Association Scale-Up Pitch Challenge
This annual small business grant sponsored by FedEx is awarded to members of the National Black MBA Association. The challenge is designed for startup businesses aiming to “make big ideas bigger.”
Semifinalists present their business pitches, covering their products or services, revenue model and estimate, target audience, market size and differentiators.
If you’re searching for black business grants and you’re in the process of starting your business, don’t miss this grant opportunity. First prize is $50,000, second- and third-place prizes are $10,000 and $1,500, respectively, and there is a $1,000 people’s choice award.
6. Asian Women Giving Circle
Since 2006, this organization has been dedicated to funding artists and cultural projects in New York and has awarded nearly $1 million. To be considered for funding, an applicant must be working to bring about social transformation while raising awareness of issues impacting Asian-American women, girls and families.
The total number of awarded grants is based on available funding. Grants awarded in 2020 ranged from $2,500-$10,000. The Asian Women Giving Circle awards grant monies annually.
7. First Nations Development Institute Grants
First Nations Development Institute has been offering grants in support of Native American organizations and projects since 1993. To date, the Institute has awarded more than $40 million.
Funding in support of Native American small business grants has been among some of the sponsored opportunities. Relevant grants have included the Native Youth Business Plan Competition, which is open to young entrepreneurs with a startup business idea, and the Keepseagle Fast-Track Grants to Support Native Farmers and Ranchers.
8. Native American Business Development Institute Grant
This grant is offered through the U.S. Department of the Interior Indian Affairs division and is designed to fund feasibility studies to identify economic opportunities within Native communities.
Findings from the study can help approved applicants secure funding to execute a business venture. For 2020, the grants required applicants to be located in economically disadvantaged communities, known as Opportunity Zones.
9. FedEx Small Business Grant Contest
This contest is open to for-profit businesses in operation for at least 6 months with fewer than 99 employees. Twelve winners will receive grants for their business and FedEx printing and business services.
Prize packages range from $15,000 to $50,000. Each FedEx Small Business Grant Contest winner is awarded credit for FedEx print and business services ranging from $1,000 to $7,500.
10. National Association for the Self-Employed Growth Grants
If you’re a member of the National Association for the Self-Employed (NASE), you can apply for the group’s small business growth grants.
There are various membership levels available, ranging from $25 to $120 annually, and monthly memberships also are available. One grant is awarded per month, up to $4,000, and funds can’t be used to pay debt, rent or mortgage payments. Grant applications are reviewed quarterly.
Criteria the association considers when granting awards include intended use of the proceeds and the potential impact of grant funds on business growth.
11. Small Business Innovation Research and Small Business Technology Transfer Programs
The Small Business Administration (SBA) oversees the Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) funding programs, which are options to consider if you’re a high-tech business looking for SBA grants for minorities.
The SBIR program provides small business funding to support the needs of federal agencies in need of assistance with technological innovation, such as the National Aeronautics and Space Administration, the National Science Foundation and the U.S. Department of Defense.
Small business owners submit proposals to participating federal agencies looking for assistance with research, design and development of new technologies.
The STTR program funds opportunities for small businesses to partner with research institutions to conduct research and development.
12. USDA Rural Business Development Grants
This U.S. Department of Agriculture’s Rural Business Enterprise Grants program is a competitive grant designed to support targeted technical assistance, training and other activities leading to the development or expansion of organizations in rural areas.
Funds can be used for land purchases, equipment, construction and pollution control, among other needs.
There is no maximum grant amount. However, smaller requests are given higher priority. Applicants must have fewer than 50 employees and have less than $1 million in gross revenue.
5 Tips for Applying for Minority-Owned Business Grants
One of the clear advantages minority-owned business grants hold over small business loans and credit cards is that they’re essentially free money that you don’t have to pay back.
As you might expect, they’re in high demand and the application process can be quite competitive and daunting.
Don’t get discouraged. By following these tips, you can maximize your time and your chances of being awarded a minority business grant
1. Do Your Research
Identifying all the minority small business grant opportunities that are a good fit for your small business is challenging.
Consult with your local Small Business Development Center or SCORE office to learn about grant options relevant to your business.
Also, online resources such as Grants.gov are great tools to find and apply for open opportunities.
2. Verify Your Eligibility
The grant application process can be daunting. Before you begin, it’s essential to verify that your business meets the specific demographic, education and business requirements of the minority small business grant you’re seeking.
3. Make Some Time
The calendars of entrepreneurs and small business owners are often jam-packed, so it’s easy to push off non-essential tasks, such as applying for your minority business grant. Don’t make this mistake. Block off your schedule to give this task the due diligence it deserves.
4. Get Organized
Keeping track of all the minority small business grants you qualify for, their various application forms and deadlines can be a messy affair. To keep everything in order, create a spreadsheet containing pertinent information related to the application process.
5. Define Your Business Plan
Whatever minority-owned business grant you pursue, a well-crafted business plan will surely be a requirement. Make sure to describe why your business will be successful.
Also, explain how you’ll use the funds from the minority small business grant. Finally, be sure to detail how you’ll fulfill the specific goals of the grant.
Resources for Researching Minority Small Business Grants
The following online resources are a good place to start researching how to get grant money for minority business owners. Whether you’re looking for black minority business grants or grants for Hispanic-owned businesses, the following resources can help you find additional funding opportunities.
SBA
The SBA is home to a wealth of information for small business owners looking to start and grow their businesses. Here you can easily identify many programs specifically tailored to your demographic, including grants.
The SBA also works with partner lenders to provide small business owners financing, and SBA loans are known for their competitive rates and terms.
Grants.gov
Wondering how to get government grants for minority business endeavors? If you’re looking for federally sponsored grants, one of the best places to start is Grants.gov.
Search through a real-time database of all federal grants, including those reserved for small business owners. Look for government grants for Hispanic small business owners, grants for black business owners, funds for Asian entrepreneurs and more.
Minority Business Development Agency
The Minority Business Development Agency (MBDA), part of the U.S. Department of Commerce, is specifically designed to advance the growth of minority businesses.
On the MBDA website, there’s information about a variety of small business funding options for minorities, including available minority small business grants.
Obtain the Capital You Need to Grow and Succeed
There’s no getting around it: To set your entrepreneurial endeavors in motion, you need capital. Fortunately, there are plenty of small business funding options available to minority entrepreneurs looking to expand their operations.
In addition to small business loans for minorities, keep an eye out for open minority small business grant opportunities. Then take the time to apply.
