In 2018, minorities owned 45% of small businesses. That’s an impressive increase from 15% in 2015. African American small business owners led this charge, with a 400% increase between 20017 and 2018.
According to Guidant Financial, Hispanics followed suit, making up 14%, while Asians made up 8%, and Native Americans 4%. Small business grants for minorities help businesses owned by members of minority populations.
As with any grant, owners can use the fund to expand their businesses. As you can see, you’re in good company. Thousands of small businesses apply for the same grant opportunities.
To be successful, you need to be comprehensive in your approach to grant applications. Business grants for minorities have specific requirements. Read on to learn more about finding and applying for minority small business grants.
Become Certified as a Minority-Owned Business
Your first step in how to get business grants for minorities is getting Minority Business Enterprise Certification (MBE). You can apply for MBE certification through the National Minority Supplier Development Council (NMSDC).
This certification assists you in accessing government contracts and grants.
1. Do You Meet the Qualifications?
You be a U.S. citizen and meet the specific criteria to qualify for certification. Your business must be 51% minority-owned (or more), controlled, and operated.
Minorities are individuals who are at least 25% Black, Asian, Native American, or Hispanic. If your company is publicly-owned, then one or more minority group members must own at least 51% of the stock.
Your company must be a for-profit business located in the United States or one of the U.S. territories. Further, a minority ownership member must manage and oversee daily operations.
2. Gather Business Documentation
Have all your applicable business documents ready. The required documentation varies depending on the type of business you own.
Some of the typical documents include partnership agreements, meeting minutes and agendas, canceled checks, and banking agreements.
Other documents include your articles of incorporation and bylaws, business leases, and insurance policies. You will need proof of citizenship as well.
3. Complete the Application Online
For the NMSDC to certify you as an MBE, you first need to complete an online application. You will need to provide some necessary information, such as your name and business contact information.
You’ll also need a description of the products and services you provide as well as the type of business and your company’s history. Next, give the names of the shareholders and owners. Include the number of minority employees that you have.
Of course, you’ll need information about the business owners’ race or ethnic original, citizenship status, and gender. Also, identify what his or her role is in the business. Finally, include your financials and a list of customer references.
4. Pay the Certification Fee
Your final step in this certification process is to pay the regional certification fee. Fees can range from $350-$1200. To find your reason, go to the NMSDC website. Note that it can take up to 90 days to receive your certification.
Finding Minority Small Business Grants
With your MBE in hand, you can now search for minority business grants. You have several search avenues and online search tools.
Small Business Association (SBA) Search
The SBA provides you with small businesses access to their grant and loan search tool. Using this search option will help you find government financing options. Many of those are grants.
The tool tailors your results to the answers you provide to some initial questions. The answers provide your business’s zip code, financial needs, owner characteristics, and industry.
Federal Online Grants
The federal government has its own. You can search for federal grants and filter to see the newest opportunities first. You can also search per category or keyword.
Your first instinct may be to search for “minority-owned business.” Though, you may have more success to search for those grants relevant to your business type.
Funding Opportunity Guides
Take some time to review guides designed to help business owners like yourself find grant opportunities. For example, New York Senator Gillibrand created a guide called “A Guide toBusiness Funding Opportunities.”
The guide contains useful information on several types of funding. Types include Rural Business Opportunity Grants for economic development in more rural communities.
It also contains information on Rural Business Enterprise Grants. They are for growing businesses that provide job training and education in a rural community.
A final example is the Community Development Financial Institution (CDFI) Assistance Grants. They provide funding to CDFIs that offer microloans to women-owned and minority-owned organizations.
Google for Grant Websites
Conducting your own search online for grant websites will return reliable results. Search for “minority-owned business grants” and explore the results. See which ones are relevant to your organization.
Other than Google, there are some reputable sites to help with your search. One is BusinessGrants.org. This site contains links to other grant organizations. It also warns you about fake websites you may encounter.
The Gates Foundation Website is another source. The Bill and Melinda Gates Foundation distributes grants for not-for-profit corporations. This includes private foundations, charities, social clubs, and business leagues.
Last, the MBDA website contains a wealth of information about grant competitions and federal funding.
Apply for Minority Small Business Grants
Once you are certified and have taken some time to see what opportunities are out there, it’s time to start applying. This is a time-consuming process.
The best plan of attack is to apply to those opportunities that are the most relevant to your business. Also, download and save your application information. Often, you will be reusing the same information over again.
Choose Relevant Grants
While you will be eligible for a multitude of grants, select those that reflect your business. Be sure that your business meets the eligibility requirements as the application specifies. Yours will need to more than a minority-owned business.
For example, some grants are for non-profit businesses only. Those offered by the Gates Foundation are an example. Other times, grants may be limited to specific business fields such as technology.
Location may be another limitation, as in the case of local state government grants. Other grants are for specific communities, such as rural or urban.
Draft a Grant Proposal
Most grants opportunities require a grant proposal to show how you meet the eligibility criteria. It’s also the platform for you to describe your company’s goals, business budget, and intended use of funds.
Effective proposals include all the sections that the grant organization requests. That means you should respond to all questions asked. Follow any guidelines contained in the instructions.
Pay attention to smaller things like page limits and word count, for example. A proposal is a written representation of your organization. Thus, be sure to edit for grammar and other errors. Better yet, have someone else so that for you.
Some grant applications include questionnaires. These are required, so be sure to answer all questions. If it’s a paper application, take care to write legibly. Whenever possible, type your responses.
You may have to attach copies of original documents such as your minority-owned business certification. Other required documents often include tax documents.
Remember that these files are required. You can upload or send a hard copy, depending on the format of the grant application.
Submit Your Application Early
Be sure to submit your application before the due date. Doing so ensures you will get your application in on time even if you have technical difficulties. If you are sending your application through traditional mail, allow for delivery delays.
The organizations handling the grant will not review your application if it arrives after the due date. Further, websites won’t allow you to submit once the deadline passes. As always, be sure to follow the instructions for submission.
Await the Decision
Most of the time, the grant instructions include the length of time you’ll wait for a decision. There is no need to contact the grant-reviewing agency to check on the status of your application unless that period has passed.
The instructions will also inform you how to expect notification, whether by phone, mail, etc.
Should the agency deny your grant application, begin again. As long as you met the requirements and supplied all the pertinent information, then your chances for success can only improve.
Start Your Search, Grow Your Business
Minority small business grants are out there. It’s a matter of doing the legwork and digging into the application process. While minority-owned businesses are growing, finding funding remains a challenge.
Grants for minority-owned businesses have specific requirements. If you meet them, isn’t it worth the time and effort to prepare the application?
If you have any questions about grants or other types of finding for your minority-owned small business, please contact us.