Minority small business grants are designed to provide funds and opportunities to business owners who belong to historically marginalized communities. Unlike loans, these grants offer capital you don’t have to pay back. Plus, many grants also provide free coaching and other forms of support.
Read on for a closer look at how small business grants for minorities work, key places you can find these grants, and how to apply for a small business grant.
How Small Business Grants for Minorities Work
Minority business grants are for people who identify as Asian, Pacific Islander, Hispanic, Latinx, Native American, Black, multiracial, and other non-white races or ethnicities. They are designed to provide financial resources to individuals who may otherwise find it difficult to get ahead in the business world.
The funds granted do not have to be paid back the way a loan would. Depending on the source, this money can be used for a variety of purposes, including:
• Equipment
• Marketing
• Payroll
• Office space
• New product line
Applying for small business grants will likely require some legwork. However, those willing to put in the effort could be rewarded with an injection of capital that could help their businesses thrive.
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Where to Find Small Business Grants for Minorities
New grants for minority business owners are created all the time. Here’s a list of options that can serve as a jumping off point.
1. NAACP Black-Owned Business Grants
The NAACP partners with other companies and organizations to offer several grants. Since the group is continually looking for new partners, small business grants for Black entrepreneurs change from time to time — so keep an eye out for new ones.
A good place to start is the Hello Alice and NAACP partnership site, where you can find a running list of Black minority business grants.
Qualifications vary by grant, though all require that businesses be Black-owned.
2. GrantWatch
GrantWatch provides a database of small business grants that allows you to search by grant topics. When using the group’s search function, you can select “small business” as the recipient and “BIPOC” (which stands for Black, Indigenous, and People of Color) as the category to home in on grants designed specifically for minority business owners.
As GrantWatch rounds up thousands of grants, including those for nonprofits, individuals, and small businesses, there isn’t one standard set of qualifications.
3. Galaxy Grants
Galaxy of Stars is a community of minority and women business owners offering support to entrepreneurs. Additionally, they provide a grant opportunity for minority business owners worth $3,750 to start or grow a company. Unlike many other grant options, you only need to fill out a brief form with the absolute basics to enter. Any and all women small business owners are encouraged to apply.
They offer additional grants or financial awards on occasion, so you may want to bookmark this site and check back from time to time.
4. First Nations Development Institute
The First Nations Development Institute offers grant opportunities to Native Americans in 42 states, Washington, D.C., and American Samoa. Their grants change throughout the year, and not all grants are specifically for small business owners, but some can support small business ventures or business-minded students. New grants opportunities are posted periodically on the website.
5. IFundWomen
IFundWomen is a funding marketplace exclusively for women-owned businesses. The platform provides access to small business grants from corporate partners, along with expert business coaching, and connections to other women business owners. By filling out the IFundWomen Universal Grant Application, you put your business in the running for all the grant opportunities that come their way. In addition to upcoming grants, you will be the first to hear about new funding opportunities, and receive additional resources from the IFundWomen community.
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Are There Federal Grants for Minority Small Business Owners?
Many federal government agencies offer grants to businesses, including minority-owned businesses. Here are two resources that can help you find federal grants.
Grants.gov
Grants.gov is a database that helps grant seekers find and apply for federal funding opportunities. It stores information on more than 1,000 grant programs offered by a range of federal grant-making agencies, including the U.S. Department of Commerce and the U.S. Small Business Administration (SBA). To apply, you’ll need to create an account, as well as a unique entity ID, which lets you apply for federal grants and bid on government contracts.
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United States Department of Agriculture (USDA) Grants
Though not limited to minority business owners, the USDA provides financial backing and technical assistance for rural businesses to create quality jobs and improve the quality of life in rural areas. USDA Rural Business Development Grants are available to small and large for-profit businesses, as well as nonprofit and tribal entities. The funds can be used for a wide range of projects, from agriculture innovation to housing, water quality, health care, and rural job creation in general.
How Do I Apply for a Small Business Grant?
Small business grant applications vary widely. Some grantors require full grant proposals, while others only ask for a small amount of information. Here are some steps that can help you get started.
1. Check the grant’s requirements. These are often very specific so be sure you meet the basic program requirements, including location, business size, industry, and any founder requirements. Some may even require that you have a membership to a specific organization before applying.
2. Collect all of your documents. You’ll likely need to supply a business plan that lays out why you’re applying for the grant and how you plan to use the funds. In addition, you may need:
• Employer Identification Number (EIN)
• DUNS number
• Revenue history
• Organizational chart, including the number of employees
• Bank statements
• Tax returns
• List of contracts your business holds
3. Fill out the application. This is typically the most time-consuming part of the process. You may need to answer multiple questions about why you need the funds and your plans for their use and how your business contributes to the community.
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Other Resources for Minority Business Owners
In addition to the above grants for minority business owners, here are some other helpful resources you may want to tap.
National Minority Supplier Development Council
The National Minority Supplier Development Council strives to provide business opportunities for certified minority businesses through training, networking, and funding opportunities.
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SBA Microloan Program
The U.S. Small Business Administration’s (SBA’s) microloan program provides up to $50,000 to new and existing startups. It is fully funded by the SBA but administered by an intermediary network of nonprofit community-based lenders, rather than traditional banks.
Unlike many traditional loans, SBA microloans are available to small-business owners with no credit history, as well as lower incomes. The program is also geared toward businesses otherwise underserved by traditional banks, including women- and minority-owned businesses and those in low-income communities. Exact eligibility requirements vary by lender.
To apply for a microloan, work with an SBA-approved intermediary in your area.
Operation Hope’s Small Business Development Program
Operation Hope’s Small Business Development Program is a 12-week intensive course providing training in business basics like financial counseling, personal development, and access to professional services.
SBA’s 8(a) Business Development Program
The SBA’s 8(a) Business Development Program aims to help socially and economically disadvantaged people or entities by assisting in applying for federal contracting opportunities. They also offer mentoring and business training.
Small Business Loans
If grants aren’t available for your business right now or you need faster funding, you may want to look into different types of small business loans. While banks typically have strict qualification requirements, such as at least two years in business and a minimum amount of revenue per year, online lenders tend to be more flexible, as well as faster to fund (though rates are typically higher).
The Takeaway
There are many grants available to small businesses owned or being started by minorities, meaning you can access cash that you don’t have to repay. While it does take some time researching and applying for these, it can be a valuable source of funding to get your small business off the ground or help it expand. Since competition can be stiff, you may also want to investigate other sources of capital for your business.
If you’re seeking financing for your business, SoFi can help. On SoFi’s marketplace, you can shop top providers today to access the capital you need. Find a personalized business financing option today in minutes.
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