The federal landscape for minority business support changed significantly in 2025 — a March 2025 executive order directed the elimination of the MBDA, and many of its roughly 38 business centers have closed or reduced services. Verify any MBDA-connected resource before you rely on it.
State-level programs and private grants have become increasingly important alternatives to federal funding — start with your state’s official small business or economic development website, and create a free account on Hello Alice to track active private grants.
Most business grants are taxable income — the IRS generally treats grant money as taxable on your business return, so talk to a CPA before spending grant funds.
This summary was generated by AI and may contain errors or omissions.
Grant programs for traditionally underrepresented business owners, and specifically minority-owned businesses, are available from private organizations, nonprofits and the government. The need is real: only 42% of small business applicants received the full financing they requested according to the Federal Reserve’s 2025 Small Business Credit Survey, and minority-owned firms face an even wider gap. And the federal landscape shifted significantly in 2025, so it’s worth knowing what’s changed for 2026 before you start applying.
What’s changed in 2026
The federal picture for minority business support looks different than it did a year ago. In March 2025, an executive order directed the elimination of the Minority Business Development Agency (MBDA) “to the maximum extent consistent with applicable law.” By April 2025, the agency had gone from roughly 100 staff to a skeleton crew, and grants to the roughly 38 business centers it operated were cut. Several centers have closed or significantly reduced services.
This doesn’t mean federal or private grant funding has disappeared, but it does mean you should verify the current status of any MBDA-connected resource before you rely on it. State-level programs and private grants have become increasingly important alternatives.
Grant programs for minority-owned businesses
The definition of a “minority-owned business” isn’t uniform across programs. Government agencies, private organizations and nonprofits can each have different eligibility criteria. Read all requirements carefully before you apply, and look into whether a program requires your business to be certified as a minority business enterprise (MBE). Getting that sorted early can save you real time later.
MBDA grants
The US Minority Business Development Agency (MBDA) was the only federal agency dedicated solely to the growth of minority-owned businesses. It operated a national network of business centers offering free consulting, help accessing capital and connections to contracts and markets.
Important note for 2026: A March 2025 executive order directed the elimination of the MBDA — because of that, many centers have closed or significantly reduced services. Before reaching out to a local center, check mbda.gov to confirm it’s still operational in your area.
NBMBAA Scale-Up Pitch Challenge
The National Black MBA Association runs an annual contest for Black-owned startups with plans to grow. The top prize is $50,000, with additional prizes of $10,000 (second place) and $7,500 (third place).
To enter, at least one founder must be an active NBMBAA member and must be Black (of African descent) with at least an equal ownership stake in the startup. The business must be in an early stage of development, no more than ten years old, and not previously won first place in this challenge. You must also be a US resident aged 18 or older.
Winners receive non-dilutive funding — you won’t owe the NBMBAA any ownership or financial obligation in return.
Check nbmbaa.org for the current application cycle and deadlines, as these vary by year.
Hello Alice
Hello Alice is a woman- and minority-owned platform that aggregates and runs grant programs for underrepresented small business owners. It hosts a running list of active grants, including programs from corporate partners and foundations. Grant amounts and eligibility vary by program.
It’s one of the more practical starting points for finding current private grant opportunities — create a free account at helloalice.com to see what’s open and get notified when new programs launch.
Office of Minority Health Program Grants
The US Department of Health and Human Services Office of Minority Health offers grants to organizations working to improve health outcomes for minority populations — think nonprofits, hospitals, universities and community health programs rather than private businesses. If your business operates in the healthcare space and has a nonprofit or research component, it’s worth checking. Sign up for updates at minorityhealth.hhs.gov.
How to find other grant programs
These programs aren’t exclusively for minority-owned businesses, but they’re worth checking — and between them they cover most of what’s out there.
Grants.gov. The central database for federal grant programs. Search using terms like “small business,” “minority,” or your industry to find relevant opportunities.
USDA Rural Business Development Grants. Worth exploring if your business is in a rural area, even though the program isn’t exclusively for minority-owned businesses.
NASE Growth Grants. The National Association for the Self-Employed awards grants of up to $4,000 to members on a quarterly basis. You must be an NASE member in good standing to apply — monthly members need to wait 90 days before applying, annual members can apply immediately. Not minority-specific, but open to all small business owners who can demonstrate a clear business need.
State programs. With federal programs reduced, state-level grants have become increasingly important. Many states run programs through their Office of Minority and Women Business Enterprises or a local economic development authority. Start with your state’s official small business or economic development website.
What to know before you apply
Certification helps but isn’t always required. Minority Business Enterprise (MBE) certification through the National Minority Supplier Development Council (NMSDC), or 8(a) certification through the SBA, can open doors to larger opportunities and government contracts. For most small grants, you can apply without it — but if you want access to corporate supply chains or federal contracts, start the certification process early. It takes time.
Grants are competitive and often local. Many programs have narrow eligibility windows, geographic restrictions and short application deadlines. Applying to several at once, rather than sequentially, is a smarter use of your time.
Most business grants are taxable income. The IRS generally treats grant money as taxable on your business return. Exceptions include federally declared disaster relief grants. Talk to a CPA before spending grant funds.
Alternatives to grants
Grants are typically fairly limited in their funds, and can be hyper local depending on the program. If you need capital now, or can’t qualify for one of the above programs, these are worth exploring.
Loans for minority-owned businesses. Private and government programs are available specifically for minority-owned businesses, which can help boost your chances of being approved. CDFIs and SBA programs like Community Advantage are designed for underserved borrowers and often have more flexible requirements than traditional banks.
Business loans. A standard business loan can fill the gap if you need capital quickly. Compare lenders to find the best rates and terms for your situation.
Personal loans for business. If your business is too new to qualify for a business loan, a personal loan for business use is an option, though rates tend to be higher and amounts lower.
Peer-to-peer lending. If you’re just starting out, bank loans typically have too-stringent requirements to qualify. A peer-to-peer lending platform may be more accessible, though these aren’t typically geared directly to minority-owned businesses.
SBA 8(a) program. Not a grant, but worth knowing about. Certification gives minority-owned businesses access to set-aside federal contracts and streamlined SBA loan processes.
State and local programs. Connect with your local Small Business Development Center (SBDC) for free help finding programs in your area.
Bottom line
The federal support landscape for minority-owned businesses has contracted in 2026, which makes it more important to look at private grants, state programs and alternative financing alongside any federal options. Scrutinizing eligibility criteria before you apply saves time, and casting a wide net across multiple programs gives you the best shot at securing funds.
Frequently asked questions
Most programs define a minority-owned business as one where a minority individual owns at least 51% of the company and actively controls day-to-day operations. Being a silent investor doesn't count — you need to run the business. The specific groups recognized as minorities can vary by program, so check each program's eligibility criteria.
Not always. For most small grants, you can apply directly without certification. Certification — like MBE through the NMSDC or 8(a) through the SBA — becomes more important if you're pursuing larger grants, government contracts, or corporate supplier diversity programs. If that's your goal, start the process early because it can take months.
Generally yes. The IRS treats most business grants as taxable income on your business return. Exceptions include federally declared disaster relief grants and grants to 501(c)(3) nonprofits. Talk to a CPA before spending grant funds so you're not caught off guard at tax time.
Yes. Most grants are available to LLCs, corporations and sole proprietors. Your business structure typically doesn't determine eligibility — what matters is that a minority individual owns at least 51% and actively runs the business.
No — the SBA does not provide grants to start or expand a business. What it does offer are loan programs, certifications like 8(a), and contracting set-asides that can be very valuable for minority-owned businesses. For grants, look to Grants.gov, private programs like Hello Alice, or state-level programs.
There isn't one, at least not anymore. The $10,000 figure comes from the EIDL Advance program — a one-time COVID-era relief program that ended in January 2022. The SBA does not offer grants to start or expand a business. If someone is advertising an SBA grant for your business, treat it as a red flag.
It depends on the program — there's no single "$5,000 grant." Several programs happen to award $5,000, each with different requirements. The Breva Thrive Grant ($5,000 quarterly) is open to US-based businesses that demonstrate community impact and have at least one year in business. Eligibility varies widely across programs, so the best approach is to search Grants.gov and Hello Alice and filter by amount and your business type.
Anna Serio was a lead editor at Finder, specializing in consumer and business financing. A trusted lending expert and former certified commercial loan officer, Anna's written and edited more than 1,000 articles on Finder to help Americans strengthen their financial literacy. Her expertise and analysis on personal, student, business and car loans has been featured in publications like Business Insider, CNBC and Nasdaq, and has appeared on NBC and KADN. Anna holds an MA in Middle Eastern studies from the American University of Beirut and a BA in Creative Writing from Macaulay Honors College at Hunter College, CUNY.
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Megan B. Shepherd is a personal finance expert and editor for loans and insurance at Finder.
Her personal finance expertise has been featured on Forbes, Nasdaq, MediaFeed, Fox News, Time, Reviews.com, and carinsurance.com, adding invaluable information related to personal loans, financial strategies and smart borrowing tactics.
Megan graduated from the University of Texas at Dallas with a BS in Business Administration with an entrepreneurial focus. She's worked as a certified financial adviser and has earned certificates of completion from A.D. Banker & Company.
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