Many government agencies and organizations offer grants, funding, and low-cost loans intended to help minority-owned businesses grow.
If you operate a minority-owned business, there are opportunities to obtain government and corporate contracts allocated specifically for businesses with this classification. But what if you are just getting started or if your business has hit a rough patch, and you could use some additional funding?
Many government agencies, banks, corporations, and associations offer grants and loans to provide aid to minority-owned enterprises. While some of the best funding opportunities specifically target minority-owned businesses, other still-good options for funding have broader eligibility but should still be explored. Additionally, some venture capital firms specialize in investing in minority founders.
Community Development Financial Institutions Fund
The Community Development Financial Institutions (CDFI) Fund, part of the U.S. Treasury Department, awards funds to community development organizations, banks, credit unions, and other financial institutions. In turn, those recipients provide low-cost loans and services to underserved populations and communities, including many minority-owned businesses. You can search for local financial institutions that have received awards from the CDFI Fund.
Disadvantaged Business Enterprise (DBE) Program
The U.S. Department of Transportation’s Disadvantaged Business Enterprise (DBE) Program aims to give minority- and women-owned businesses “a fair opportunity to compete for federally funded transportation contracts.” Substantial awards are given out each year to businesses that focus on highway, transit, airport and related projects. While it does not offer direct funding in the form of grants or loans, this program is still notable for its contracting opportunities.
FedEx Small Business Grant Contest
Each year, the FedEx Small Business Grant Contest awards more than $250,000 to 12 small businesses. The contest focuses on providing grants to businesses with “products reaching niche and under-served markets, business models focused on sustainability, and just all-around innovative products.” Many winners over the years have been minority- and women-owned enterprises. The winners for 2020 have been announced, but the contest will open up again for entries in early 2021.
Grants.gov is one of the best places to look for grants. It is worth your time to learn how to navigate this site as it can give you access to thousands of funding opportunities. Grants are matched with businesses and individuals who can help the government with “projects to provide public services and stimulate the economy.” Types of projects that receive funding are comprehensive and include economic recovery initiatives, innovative research, training programs, and targeted work for U.S. embassies worldwide.
Minority Business Development Agency
The Minority Business Development Agency (MBDA), an agency of the U.S. Department of Commerce that “promotes the growth of minority-owned businesses,” offers various targeted grants and loans throughout the year. Some examples of grants include an “Entrepreneurship Education Program for Formerly Incarcerated Persons Grant” and an “Enterprising Women of Color Grant Competition.” Minority-owned businesses can also take advantage of MBDA Business Centers that are located around the country. These centers can help companies with “securing capital, competing for a contract, identifying a strategic partner, or becoming export-ready.”
National Association for the Self-Employed
The National Association for the Self-Employed (NASE), the country’s largest organization supporting self-employed and micro-businesses, offers grants up to $4,000 to help its members. These “Growth Grants” provide NASE members with capital to train employees, improve their marketing assets, invest in hardware and software, and more. The NASE says it has distributed about $1,000,000 in Growth Grants to members since 2006.
Small Business Administration (SBA)
Businesses can seek low-cost loans between $500 and $500,000 from the SBA. Additionally, the SBA has a program called 8(a) Business Development, which specifically offers opportunities and contracts to businesses that are “at least 51 percent owned and controlled by U.S. citizens who are economically and socially disadvantaged.”
Small Business Innovation Research and Small Business Technology Transfer
Small businesses can have a difficult time competing with larger players when it comes to cutting-edge research and technology. The federal government’s Small Business Innovation Research (SBIR) and Small Business Technology Transfer (SBTT) programs are designed to help counter this notion by offering hundreds of grants a year for innovative small businesses.
Venture Capital Firms
While the majority of venture capital firms don’t tailor investments specifically to minority-owned businesses, some firms have been established during the past few years that are designed to invest in minority- or women-owned businesses.