Modern American capitalism is an ironic tableau of cruel contradictions. While cheap consumer goods are more accessible than ever and the price of large high-resolution TVs keeps going down, the things actually required for human beings to live and thrive — housing, health care, education, retirement security, etc — become ever less accessible to the exploited, over-policed masses by the day. This reality has all the more salience to minority groups whose access to these necessities was precarious at best to begin with.
Startup capital is another resource that has been made scarce to marginalized communities. 10 years after the financial crisis of 2008, banks still aren’t lending to those who could do the most good with the cash (never mind that all of us, both marginalized and privileged, were made to bail out these same banks after they ruined the world). For most minority small business owners, the prospect of getting free money to cover business expenses is going to sound rather far-fetched.
That’s where business grants come in. Small business grants are not easy to obtain, but they do exist and can be an invaluable source of funding for those who obtain them. We decided to compile a list of the best grants and grant-related resources for minority-owned businesses.
But first, here’s more information on getting funding for your small business:
- Do I Qualify For A Startup Grant?
- How To Find A Startup Grant
- The Best Business Grants For Women
- The Best Small Business Loans For Minorities With Bad Credit
Minority Business Development Agency
AnÂ agency of the U.S. Department of Commerce, the purpose of the Minority Business Development Agency, or MBDA, is to help connect minority business owners to federal contracts and other financial resources. The agency also periodically awards grants to minority-owned companies for specific purposes. In November, the federal government announced that the MBDA had awardedÂ over $13 million in grants to 35 projects across the country.
From helping youÂ find grants and loans to providing marketing and legal assistance, the MBDA’s physical business centers are set up to provide a range of assistance to minority business owners and entrepreneurs. Here’s a searchable directory of these MBDA businessÂ centers.
Grants.gov doesn’t originate grants; rather, it’s a searchable databaseÂ of every grant program from across all 26 grant-making agencies of the federal government. It’s a valuable resource, though the website is prettyÂ clunky.
In order to apply for federal grants, you must do the following:
- Get a DUNS number from Dun & Bradstreet
- Register to do business with the federal government through its System Award ManagementÂ website
- Create an account at Grants.gov
National Association for the Self-Employed
The NASE is a nonprofit trade association that gives grants and provides educational resources for small businesses and entrepreneurs. TheirÂ Growth Grants ProgramÂ lets small business owners apply for grant financing for a particular small business need.
These grants are worth up to $4,000 each, so while you won’t hit the funding motherlode with the NASE, it’s a great resource for minority business owners with a specific, defined funding need. You’ll need to join the NASE to apply for a grant, and you’ll need to explain in detail how you’ll use the funds and how this funding will bolster your business operations.
FedEx Small Business Grant Contest
The FedEx Small Business Grant Contest is a nationwide competition held annually to award grants in the form of cash and prizes (such as credits for FedEx services) to small business owners and entrepreneurs. The amount awarded to contest winners and the number of grant recipients varies year-to-year. The details of the 2019 competition have yet to be unveiled, but these specifics will be unveiled when the 2019 competition is announced early in the new year.
For reference, here is a series of features on the winners of the 2018Â Grant Contest winners.
Dare To Dream Grant Program
The Eugene ApplebaumÂ Dare to Dream grant program is a prominent program based at the University of Michigan offeringÂ business development seminars and $500-$5,000 in grants to individuals and/or student teams. Prospective entrepreneurs in the upper midwest, take note!
USDA Rural Business Development Grant
For minorities in rural areas, this grant, issued by theÂ United States Department of Agriculture, is an attractive prospect. In the words of the USDA:
This program is a competitive grant designed to support targeted technical assistance, training and other activities leading to the development or expansion of small and emerging private businesses in rural areas which will employ 50 or fewer new employees and has less than $1 million in gross revenue.
Program applications vary by state, so you’ll need to find the specifics of what’s on offer in your state through the USDA’s RBDG website.
Native American Business Development Institute (NABDI) Grant
This grant program is funded by the U.S. Department of Indian Affairs and is intended to support Native American and Alaskan Native business owners. Currently, they don’t have a great deal of information posted on the grants being offered, but you can always contact theÂ Office of Indian Energy and Economic Development to learn how the program stands to benefit your business.
Office of Minority Health Grant Programs
A division of theÂ Department of Health and Human Services, the Office of Minority Health (OMH) offers grants to businesses whose mission is to eliminate health disparities among racial and ethnic minority populations. Keep an eye on the OMH website to learn about grant opportunities when they are announced.
How To Find & Apply For Small Business Grants For Minorities
Finding the right grant program, applying for it, and actually getting the grant in question can be a daunting prospect. That’s why it may be a good idea to simultaneously look for alternate sources of funding, such as personal loans or lines of credit. We recommend the following reputable funder to minorities who are looking for business financing:
Personal Lenders For Business
|Lender||Borrowing Amount||Term||Interest Rate||Min. Credit Score||Next Steps|
|$2K – $25K||2 – 4 years||15.49% to 30%||600||Apply Now|
|$1K – $50K||3 or 5 years||8.16% â 27.99%||620||Apply Now|
|$2K – $35K||3 or 5 years||6.95% – 35.99% APR||640||Apply Now|
|$1K – $40K||3 or 5 years||5.32% – 30.99%||640||Check Rate|
Lenders That Specialize In Lines Of Credit
|Lender||Borrowing Amount||Draw Term||Draw Fee||APR||Next Steps|
|$6K – $100K||6 months||None||Starts at 13.99%||Apply Now|
|$2K – $5M||Varies||Varies||Varies||Apply Now|
|$5K – $5M||6 months||1.50% per draw||21% – 65%||Apply Now|
|$1K – $100K||12 weeks||None||12% – 54%||Apply Now|
Remember that unlike with loans and the like, the money that comes with grant programs has strings attached. It must be used in precisely the way specified by the grant giver. That’s why it pays to know the details of the grant you’re applying for, as there’s no reason to apply for grants that would disburse money for a funding need you don’t even have.
I should reiterate that in order to qualify for any federal grants, you need to register at sam.gov. Unfortunately, the registration process isn’t as straightforward as it should be, as the government agencies in question seem to be in the middle of shifting their small business assistance materials between agencies and websites. As things stand, sam.gov lays out the steps required to register your small business here.
One organization that can get you pointed in the right direction in your quest for business funding is SCORE. It’s a partner of the Small Business Administration (SBA) and provides mentoring services to small business owners and entrepreneurs from over 300 chapters across the country. They also provide online webinars and business courses.
What To Do Before Applying For A Grant
- Define your exact funding need: be ready to define the precise objectives a grant would help you meet
- Create a detailed business plan
- Gather and assemble all the business records you can from at least the last three years
- Have your plan and records reviewed by experts, whether they be SCORE mentors or others with experience in guiding business owners through the grant-hunting process
- For a large grant, consider hiring a professional grant writer if you can
Entrepreneurial talent can be found in every community across this land. Sadly, social and structural barriers to equality persist. Small business grants are but one means by which minority small business owners can get some ever-elusive funding. For other such means, check out our article on the various types ofÂ alternative financing available for small businesses, or look into one or more of the alternative funders below:
|Lender||Borrowing Amount||Term||Interest/Factor Rate||Req. Time in Business||Min. Credit Score||Next Steps|
|$5K – $500K||13 – 52 weeks||x1.029 – x1.1872||9 months||550||Apply Now|
|$5K â $300K||6, 9, 12, 15, or 18 months||x1.15 â x1.31||1 year||600||Apply Now|
|$5K – $500K||3 – 36 months||x1.003 – x1.04/mo||12 months||500||Apply Now|
|$2K – $5M||Varies||As low as 2%||6 months||550||Apply Now|
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