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According to the US Census Bureau, less than 20% of American employers are owned by minorities. Yet owners of these 1.1 million minority-owned businesses often face heightened challenges when it comes to obtaining business financing.
In fact, black entrepreneurs were three times less likely to apply for credit for fear of loan rejection, according to a Duke University paper and the UNC Kenan Institute of Private Enterprise which found significant funding gaps between minority groups and white male business owners.
Securing grants, and minority grants in particular, is one solution that aims to help increase access to business finance for minority-owned business owners. With grants, you don’t have to pay back the funding your business receives, or share part of your business with investors. However, since grants are such an attractive source of funding, you are likely to face many competitors during the application process.
Here are 10 small business grants for minority business owners.
Featured Small Business Loans
$5,000 to $250,000
$6,000 to $250,000
$5,000 to $500,000
Grants.gov is one of the first resources you might want to check out for business grants, whether it’s minority grants or other opportunities. The database, maintained by the Office of Management and Budget (OMB), contains information on more than 1,000 federal grants. It also includes details on the eligibility requirements for each program.
To apply for a grant through the Grants.gov system, you must first establish a Workspace account that you (and your team) use to access system applications. Once you’ve completed this step, you’ll be free to search for federal grants that match your business goals and apply for the ones you think are right for you.
2. USDA Rural Business Development Grants
The USDA Rural Business Development Grant (RBDG) is another federal resource that provides small rural businesses with funding, technical assistance, and training. Although there is no maximum grant amount, $10,000 to $500,000 is the standard RBDG award range.
To qualify for this USDA grant, you must have a small rural business who earns less than $1 million per year (gross income) and has 50 or fewer new workers. If you think your business may be eligible for funding, you can visit the USDA website for more information on how to speak with a business program specialist in your state. The specialist can advise you on the forms and applications you will need to complete.
3. FedEx Small Business Grant Competition
Many small businesses have struggled due to the Covid-19 pandemic. In response to the crisis, FedEx created the FedEx Small Business Grant Contest. For the year 2022, 10 small businesses (defined as having less than 100 employees) will receive one of the following grant packages.
- Grand Prize: Three winners will receive a $50,000 grant, $4,000 in FedEx Office Credits (for business and printing services) and more.
- First Place: Seven winners will receive a $20,000 grant, $1,500 in FedEx Office credits and more.
Eligible businesses can create a FedEx account and participate in the 2022 scholarship competition through February 28, 2022. The voting period and when FedEx announces the top 100 winners is March 22-31, 2022. Final winners are announced May 4, 2022.
4. The Coalition to Support Black Business
The Coalition to Back Black Businesses is a partnership of several brands that have come together with the goal of empowering Black-owned businesses.
The Coalition is providing $14 million in minority grants, resources and training over a four-year period through 2023, intended to help small businesses recover from pandemic-related setbacks. The Coalition includes American Express, ADP, AIG Foundation, Altice USA, Dow and the S&P Global Foundation.
Select businesses will be eligible for grants in the amount of $5,000 each fall, in combination with training and mentorship benefits. As summer arrives, a few early grant recipients will receive additional $25,000 Enhancement Grants as a means of additional funding and support.
Eligible companies must be Black-owned businesses located in communities in economic difficulty. You can apply on the Coalition’s website in the fall when the application process opens. The Grants Committee will randomly select 400 or more eligible applicants to receive cash prizes and other benefits.
5. National Black MBA Association Scaling Pitch Challenge
If you have an idea for a scalable black-owned startup, you might benefit from researching the National Black MBA Association’s (NBMBAA) Scale-Up Pitch Challenge. NBANB has designed a contest to “make big ideas bigger”. The competition aims to give eligible startups the opportunity to connect with venture capitalists and other early-stage investors.
NBANB judges will also select three finalists to receive cash prizes. The grand prize is a small business grant worth $50,000.
When the application process is online, eligible companies can do a virtual location to a panel of judges by sharing their business idea. Finalists will later have the chance to make a three-minute live pitch to the judges explaining why their product or service should be considered for the grant.
6. Asian Women Giving Circle Grants
The Asian Women Giving Circle (AWGC) is a network that works to raise funds for projects led by Asian American women. Eligible projects must be related to arts and culture, promote social awareness of issues affecting Asian American girls, women, and families, and be located in New York City.
The Grants Committee awards grants of up to $15,000 per project. But the total number of grants given depends on the availability of funds. When the application process is online, you can submit your application in line.
7. The National Association of Self-Employed Growth Grants
The National Association of the Self-Employed (NASE) has awarded nearly $1 million in grants to small business members through its Grow Grants program. Eligible small businesses can receive grants worth up to $4,000 under the program, awarded on a quarterly basis.
You have to Become a member from NASE before you can apply for the Grow Grant program. Once you join, you will have the opportunity to apply for small business grants on a quarterly basis, according to the schedule below:
- January to March
- April to June
- July to September
- October to December
The Grants Committee reviews all applications the month following the end of the quarterly submission deadline. Recipients must demonstrate an identifiable business need, explain how they would use the grant to meet that need, and show potential for growth and success if their business received the funds.
8. Quick Break for Small Business
Black-owned and diverse businesses can apply for grants through the Fast Break for Small Business program, which is sponsored by LegalZoom as well as the NBA, WNBA and NBA. The program aims to distribute grants to more than 5,000 small businesses for a total of $6 million in cash rewards. Grants are awarded in increments of $10,000 and winners will also receive $500 in LegalZoom services.
The next round of grant applications will open in Spring 2022. You can Register online for updates on future funding opportunities.
9. First Nations Development Institute Grants
Since 1993, First Nations have provided grants to help support Native American organizations and projects, totaling $51.6 million in grants, as well as technical resources.
Past grant opportunities include Covid-19 response programs, Indigenous youth and culture support, college scholarships, and an Indigenous youth business plan competition, among others. Visit the First Nations website to learn more about new grant opportunities when they become available.
10. USDA Water and Waste Disposal Loan and Grant Program
The USDA offers a grant program to nonprofit organizations, government entities, and federally recognized tribes to support businesses in eligible rural communities which operate in the areas of water and waste disposal. Eligible recipient companies must also have a maximum of 50 new employees to have a chance to qualify for funding.
The USDA offers both loans and grants to qualifying businesses, whether minority-owned or not. Grants may be combined with USDA loans under certain circumstances to keep overall financing costs within reach of qualified borrowers. You can use grants for a variety of purposes, including:
- Legal fees
- Engineering fees
- Land acquisition (or acquisition of land and water rights)
- Start-up expenses
You can apply for USDA funding (grants and loans) once a year. Your USDA State Office manages the application process.
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