Grant programs for traditionally underrepresented business owners — and specifically minority-owned businesses — are available from private organizations, nonprofits and the government.
The definition for what qualifies as a minority-owned business isn’t uniform across the board. The government, private organizations and nonprofits can all have different working eligibility criteria based on the definition they’re using.
Fully read all requirements to ensure your business qualifies before you apply. And look into whether the program requires your business to be certified as a minority business enterprise (MBE). Doing so can save you time down the road.
3 grant programs for minority-owned businesses
These grant programs are available to minority-owned businesses or work to serve minority communities. Some programs are on hold for 2020 due to COVID-19, with plans to relaunch in the future.
MBDA Grants
The US Minority Business Development Agency (MBDA) has several grant programs for minority-owned businesses:
- Enterprising Women of Color Grant Competition. Support to help three women-owned businesses access funding, contracts and increase job opportunities in the community.
- Entrepreneurship Education Program for Formerly Incarcerated Persons. Funding and support for minority entrepreneurs who are reentering the workforce after release from incarceration.
- MBE Inner City Innovation Hub Grant Competitions. Funding and training for tech businesses in areas designated as “inner city” with a high concentration of minority residents and minority-owned businesses
NBMBAA Scale-Up Pitch Challenge
The National Black MBA Association runs an annual contest for Black-owned startups that have plans to scale up. The first prize is $50,000, while three additional entrepreneurs win prizes that can run from $1,000 to $10,000.
To enter the competition, at least one owner must be a member of the NBMBAA, and your business must be in the early startup phase.
Office of Minority Health Program Grants
The US Department of Health and Human Services Office of Minority Health often offers grants to healthcare businesses that work to serve minority populations. Many focus on specific initiatives — like promoting physical activity or offering hepatitis B vaccines. Sign up for its weekly newsletter for the latest grant opportunities.
Other grant programs
Your business can likely benefit from other business grant programs. Search for federal programs on the Department of Health and Human Services Grants.gov site — you may find even more resources for minority-owned businesses.
Other programs like the National Association for the Self-Employed (NASE) Growth Grants Program and the USDA’s Rural Business Development Grants might also be helpful, even if they aren’t specifically available to minority-owned businesses.
3 alternatives to grants for minority-owned businesses
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, you can check out these other funding methods.
- Specialized loans. Looking into loans specifically for minority-owned businesses might answer your needs — albeit at a cost. Private and government programs are available, which can potentially help boost your chances of being approved.
- Local programs. Connect with the MBDA to be put in touch with additional resources available to your community. This can include programs that help you tap into alternative financing, like how to use family assets to secure funding, set up IRS-approved loans with family and friends and more.
- Peer-to-peer lending. If you’re just starting out, bank loans typically have too-stringent of requirements to qualify — but a peer-to-peer lending platform may be more accessible. While these aren’t typically geared directly to minority-owned businesses, they might give you a stronger chance of approval.
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Bottom line
Specialized programs may be the best bet for getting your business the capital it needs to grow, especially if you’ve struggled to qualify elsewhere. Scrutinizing eligibility criteria can save you time down the line, and looking into local grants may give your business a better chance of securing funds.
To compare and learn about even more financing options, read our guide to business loans. If you are looking for business banking, see which minority banks are near you.
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