Minority Business Grants: 25 Resources for Minority Entrepreneurs

Best Minority Business Grants

1. Grants.gov Federal Grants Portal
2. The National Association for the Self-Employed (NASE) Growth Grants Program
3. Small Business Innovation Research (SBIR) and Small Business Technology Transfer (SBTT) Grants
4. Rural Business Development Grants
5. FedEx Small Business Grant Contest

Minorities are majorly driving the growth of entrepreneurship in this country. According to Census Bureau data, the number of minority-owned firms doubled over the last decade. These businesses employ 6.3 million workers and generate $1.8 trillion in revenue each year. And those numbers are expected to increase over the next few decades as more minorities turn to entrepreneurship as a path to financial independence.

Although more minorities are carving out a successful niche in business, starting a company still poses unique challenges if you’re a minority business owner. Minority-owned businesses tend to be smaller and generate lower profits than businesses owned by white people. Minority entrepreneurs are also less likely to get access to credit, which is a key predictor of a business’s future success. 

The path to entrepreneurship is certainly harder for people of color, but there are resources that can help. These can be invaluable for businesses seeking specialized advice or assistance on getting started, finances, networking, and education. Make sure you’re taking advantage of all the opportunities available to you: See our roundup of the 25 best minority business grants and other resources aimed toward minority entrepreneurs.

Resources for Minority Business Owners Starting Out

• U.S. Small Business Administration (SBA) – The SBA is the perfect starting place for any business, with resources for writing a business plan, educational resources, and information on government contracting, SBA loans, and grants—some of which are specifically tailored to minority businesses.
• Minority Business Development Agency (MBDA) – Don’t miss out on the tools and opportunities available from the Minority Business Development Agency. This government agency is specifically designed to enhance the growth of minority businesses in the U.S. and is ripe with educational and business resources, including financial and globalization information, the MBDA’s mission is to expand economic opportunity for all Americans.
• National Minority Business Council – This non-profit is dedicated to providing educational assistance, training, and networking opportunities for minority-owned businesses. Although the National Minority Business Council is based in the tri-state area, they help businesses nationwide.
• Minority Chambers of Commerce – In most cities, there are national and local U.S. Chamber of Commerce chapters for black, Asian, and Hispanic entrepreneurs. These are advocacy groups that champion favorable legislation for entrepreneurs, but they also offer growth resources and networking opportunities.
• SCORE – SCORE is a resource partner of the SBA and can help entrepreneurs at any stage of business ownership. The organization is composed of a volunteer network of over 10,000 business mentors in 300 chapters nationwide. Part sounding-board and part coach, mentors, particularly those in your industry, can provide invaluable help when you’re starting out.

Resources for Minority Business Certification

In order to qualify for some government benefits, you will need to officially certify your business’s minority status. Certification can help your business gain access to minority business grants and government contracts and help you become a supplier for large companies. Several government agencies at the local, state, or federal level offer certification, although some charge a fee (ranging from $300 to $1,200) for certification.

• NMSDC’s (National Minority Supplier Development Council) – This organization has 37 regional councils. If your business wants to connect with private-sector buyers, complete the NMSDC application process. To qualify, your business should be at least 51% owned and operated by an entrepreneur from a minority background.
• Small Business Administration’s 8(a) Business Development Program – The SBA’s 8(a) program is designed to help minority-owned businesses compete better for federal government contractors. To comply with this program, federal government agencies need to set aside a portion of their contracts for 8(a) applicants. Before you’re eligible, the SBA must certify your company as a minority-owned business.
• Department of Transportation (DOT) Disadvantaged Business Certification Program – This program provides a vehicle for increasing the participation by minority-owned businesses in DOT contracts. At least 10% of DOT contracts go to minority-owned businesses. They will certify your business based on on-site visits, personal interviews with the owners, stock ownership, the business’s financial capacity, and other factors.

Minority Business Grants

Grants are another excellent resource for minority entrepreneurs. Grants are great because they are essentially free money. Unlike a business loan, you don’t have to pay back a grant or pay interest. Several small business grants are available specifically for minority-owned businesses—but don’t miss out on some of the general grant opportunities either. Grants come from the federal government, state and local governments, and private organizations. 

• Grants.gov – This is a federal portal offering eligibility information and deadlines on over 1,000 small business grants. All federal government agencies offering grants will post the information on this site. Over two dozen federal agencies offer grants, including the Department of Agriculture, Department of the Interior, Environmental Protection Agency, and National Aeronautics and Space Administration.
• The National Association for the Self-Employed (NASE) Growth Grants Program – This program lets business owners apply for a $4,000 micro-grant. To be eligible, you must be a member of NASE and identify how the grant will help you satisfy a specific business need. Past recipients have used funds to purchase computers, hire part-time help, and create marketing materials.
• Small Business Innovation Research (SBIR) and Small Business Technology Transfer (SBTT) – Together, SBIR and SBTT provide funding opportunities for businesses engaged in cutting edge research and development. Five government agencies—NASA, DOD, DOE, DHHS, and the National Science Foundation—participate in this highly competitive grant program to foster technological innovation.
• Rural Business Development Grants – This grant program from the Department of Agriculture is worth special mention because of the size of the grants. Through this program, businesses can get grants between $10,000 and $500,000. The program is available to businesses operating in rural areas, with a population under 50,000.
• FedEx Small Business Grant Contest – This is a nationwide competition that awarded $25,000 each to 10 deserving business owners in 2018. It’s an annual competition, and winners are those with a unique business idea that positively impacts the community.

Business Loans for Minority Entrepreneurs

If you’re not able to qualify for a minority-owned business grant, then a business loan is the next best thing. You can also use business loans to supplement funding from a minority business grant. Although there isn’t a particular lender you can go to that specializes in minority business loans, there are federal, state, local, and private loan programs tailored to address some of the challenges that minority small business owners often face. Remember, before committing to any loan, you should make sure you fully understand the cost and other terms.

• Small Business Administration Community Advantage Loans – The SBA guarantees loans made by banks and other direct lenders. About one-third of SBA loans go to minority-owned companies each year. The SBA Community Advantage loan program works to meet the financial needs of small businesses in underserved markets. The program encourages local, community lenders such as nonprofit organizations to make loans of up to $250,000 by guaranteeing up to 85% of the loan amount. The program is designed to service small business owners who might not qualify for traditional financing.
• Microloans – International microloan organization Accion has a U.S. microlending program targeting low- to moderate-income business owners who have difficulty accessing capital through traditional channels, making it a great option for loans for a minority small business or women of color entrepreneurs. While not minority-specific, Accion’s U.S. member organizations offer microloans in all 50 states. 
• National African American Small Business Loan Fund – This is a joint effort of JP Morgan Chase and the Valley Economic Development Centers (VEDC). The fund serves minority-owned small businesses in low- or medium-income communities in New York, Los Angeles, and Chicago, providing access to capital, financial consulting, and technical help.
• Online Alternative Lenders – Unfortunately, minority entrepreneurs often have trouble accessing financing due to lower credit scores. If you’re in that position, it might be time to reach out to an online alternative lender. These lenders place less emphasis on credit and more on business revenues.

Resources for Handling Small Business Taxes

Although there are no direct tax incentives for minority-owned businesses, understanding business tax breaks and assistance programs might help your business. A number of tax incentives at the local, state, and federal level are designed to encourage businesses to operate in locations that are economically distressed. These are not only for minority-owned businesses but for any businesses that qualify—it’s worth a search to see if your business runs in a qualified area.

• New Markets Tax Credits – Offered through the U.S. Community Development Financial Institutions Fund (CDFI), New Markets Tax Credits incentivize business owners and investors who contribute to low-income communities. You can claim 39% of the amount you invested in a low-income community as credit, over a seven-year period.
• Section 179 Tax Deduction – The Section 179 tax deduction allows small business owners to deduct up to $1 million on equipment purchases in the year of purchase, rather than depreciating the equipment year over year. The result is a windfall to small business owners in the year they purchased the equipment. This helps your cash flow and allows you to make big investments in your business.
• Distressed Zones Tax Credits – The government offers tax breaks to companies that operate in economically distressed areas, with the hope of attracting more companies to those areas. Businesses operating in such zones might qualify for these special tax breaks:

• • Empowerment-zone employment credit: Up to $3,000 per eligible employee, for hiring workers in these locations.
  • Special capital-gain exclusion: For small-business stock in corporations within the zone that is held for more than five years.
  • Additional first-year expensing write-off: Up to $35,000 for purchases of equipment and machinery, in addition to the basic write-off amount.

Media Resources and Books

Black Enterprise

If you’re interested in learning about business news, educational tools, and minority business trends, check out Black Enterprise, an online small business magazine. They publish articles on career advice, how to build wealth, and profiles of African American business success stories.

Making It TV

Ever wish you could pick the brain of a successful small business owner?  Here, they confess all their secrets. Making It TV is packed with information pertaining to minority enterprises. You can watch lively discussions on the site’s DirecTV show or check out video clips available online to learn the secrets of entrepreneurial success. The site also hosts events or workshops on topics from finding small business grants, getting government contracts, and starting a business.

“Minority Business Success: Refocusing on the American Dream”

Leonard Greenhalgh and James Lowry, the authors of “Minority Business Success: Refocusing on the American Dream,“ chart a path for the full participation of minority businesses in the U.S. economy. The book summarizes demographic changes in America and shows why it’s in the country’s interest to foster the success of minority-owned businesses. The authors also suggest what minority firms must do to take their place in major value chains and examines how governments, corporations, and support organizations can foster minority inclusion. This book is less about practical advice and more a forward-looking analysis of the importance of minority-owned businesses.

“The Man From Essence”

Edward Lewis, co-founder of Essence Magazine, shares his journey to success in “The Man From Essence“. What started as a small publishing platform with three partners grew into a multi-million dollar company. Lewis explains his view on management, startup strategy, and perseverance through the inevitable ups and downs of running a small business.

“Start Your Own Business: The Only Startup Book You’ll Ever Need”

Tapping into more than 33 years of small business expertise, the staff at Entrepreneur Media takes entrepreneurs beyond opening their doors and through the first three years of ownership. The revised edition of “Start Your Own Business: The Only Startup Book You’ll Ever Need” features updated chapters on choosing a business, adding partners, getting funded, and managing the business structure and employees, and also includes help understanding the latest tax and healthcare reform information and legalities.

Use Minority Grants and Other Resources to Grow

There you have it—25 resources to start, grow, and manage your minority-owned business. Things can be an uphill climb for minority small business owners, but with the right resources, you can overcome these challenges and find a way to launch your business. And the good news is that once your business is up and running and exits the “startup phase,” securing resources and business financing becomes a lot easier. 

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