Top Minority Business Grants in 2021

 

According to Census Bureau data, the number of minority-owned firms doubled over the last decade.  This being said, however, although minorities are majorly driving the growth of entrepreneurship in this country, minority business owners still face a multitude of challenges when trying to start and finance their businesses. Overall, minority-owned businesses tend to be smaller and generate lower profits than businesses owned by white people. BIPOC entrepreneurs are also less likely to get access to credit, which is a key predictor of a business’s future success.

Luckily, in addition to traditional financing options, like business loans, there are a variety of alternative funding solutions that minority entrepreneurs can explore, like small business grants. In this guide, therefore, we explore a list of 12 of the best minority small business grants and what you need to know to apply for these grants for your business.

12 Best Minority Business Grants

If you’re having trouble qualifying for traditional financing, or simply want to consider all of your options, small business grants are a great funding alternative. Unlike business loans, where you have to pay back the capital you borrow—plus interest—grants are essentially free money.

With this in mind, however, it’s important to remember that grants can be extremely competitive and often require involved and lengthy application processes. Nevertheless, there are small business grants available specifically for minority-owned businesses—including those from the federal government, state and local governments, and private organizations.

1. Grants.gov

Although Grants.gov doesn’t exclusively offer minority-owned business grants, this federal portal is a great resource for finding grants applicable to your specific industry and eligibility. On the whole, Grants.gov offers eligibility guidelines, application information, and deadlines on over 1,000 small business grants.

All federal government agencies offering minority business grants (and others) will post their 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. In particular, minority-owned businesses might narrow the search based on the category “small business,” or your individual eligibility criteria, like “Native American tribal organization,” or “nonprofits.”

2. The National Association for the Self-Employed (NASE) Growth Grants Program

Nase offers the Growth Grants Program which allows members to apply for grants to help their businesses grow. These micro-grants are worth up to $4,000 each and you must be a NASE member to qualify. Once again, although NASE doesn’t exclusively offer minority small business grants, this program focuses on smaller businesses who can’t always find other methods of financing. Plus, a NASE Growth Grant can be used for a variety of business purposes—including purchasing equipment, hiring employees, or creating marketing materials.

NASE offers these grants on a monthly basis and applications are reviewed quarterly.

3. Small Business Innovation Research (SBIR) and Small Business Technology Transfer (SBTT)

If you’re looking specifically for minority business development grants, you might want to start with the SBIR or SBIT programs. These two government programs provide business funding opportunities for small businesses engaged in cutting edge research and development. Eleven government agencies including NASA, DOD, DOE, DHHS, and the National Science Foundation—reserve a portion of their research and development funds to contribute to this highly competitive grant program to foster technological innovation.

As you might imagine, the grant qualification requirements and amounts awarded are largely specific to the program and individual grant you’re applying for. This being said, however, you must have an American-owned and independently operated, for-profit small business, with the principal researcher employed by your business. Your business also must have 500 employees or fewer.

4. Rural Business Development Grants

Do you run your business in a rural area? If so, you’ll want to explore the Rural Business Development Grant Program from the USDA. Through this program, you can get apply for minority small business grants between $10,000 and $500,000.

More specifically, this program is available to businesses operating in rural areas, with a population under 50,000. Additionally, grant money must be used for projects that benefit your rural area or town. A variety of rural public entities are eligible for this program, including nonprofit corporations, federally recognized tribes, rural cooperatives, state agencies, and more. To apply, you can find the documentation and other requirements relevant to your state on the USDA website.

5. USDA Water & Waste Disposal Loan & Grant Program

The USDA Water and Waste Disposal Loan and Grant Program helps qualified business owners (minority business owners and others) who aren’t able to obtain more traditional business financing. This program, as per the name, provides both grants and business loans.

Overall, to qualify for this grant program, your business must be in the field of water or waste disposal in an eligible area—a rural area or town with a population of 10,000 or less, tribal lands in rural areas, or colonias. This being said, most state and local government entities, private nonprofits, and federally-recognized tribes are eligible for this program.

6. Tribal Energy Development Capacity Grant Program

These minority business grants are specifically available for federally recognized tribal organizations, Alaska Native Villages, and Tribal Energy Development Programs. This program is administered by the U.S. Department of the Interior with the goal of providing funding to maximize the economic impact of energy resource development on Native American land.

Therefore, with these minority business development grants, you can develop or enhance your business and regulatory environment for energy resource development.

7. USDA Community Connect Grants

The USDA Community Connect Grants program is a great option if your minority-owned business is looking to provide broadband service in rural areas. Funds from these grants can be used to construct, acquire, or lease land or building used to deploy broadband service for residential and business customers located in the applicable rural area, as well as critical community facilities in that area.

Additionally, funds may be used to provide free broadband service to community facilities for two years. State and local governments, federally recognized tribes, nonprofits, and for-profit corporations are all eligible for these grants.

8. Minority Business Development Agency (MBDA)

On the whole, the MBDA provides grants to organizations that operate their Minority Business Centers throughout the United States. Through one of these centers, however, you can receive business consulting, procurement matching, and financial assistance for your minority-owned business.

Additionally, the MBDA also runs a separate ongoing grant competition program. Last year, this program looked for proposals to develop and implement an MBDA Virtual Business Center.

9. First Nations Development Institute Grants

First Nations is a non-profit that runs a national grantmaking program. As of mid-year 2019, First Nations has provided 1,648 grants totaling more than $34.9 million to Native American projects and organizations in 40 states, the District of Columbia and U.S. Territory American Samoa.

Overall, although the individual minority small business grants that First Nations offers can vary, their program strives to provide financial and technical resources to tribes and Native nonprofits.

As their available grants change, you can look for current applications on the First Nations website.

10. SBA 8(a) Business Development Program

Whether you’re interested in Black minority business grants or business grants for women, you might look into the SBA 8(a) Business Development Program. Although technically, this program doesn’t offer grants, it is specifically designed for small businesses owned by “socially and economically disadvantaged people or entities.”

This being said, the SBA 8(a) program helps these business owners compete for set-aside and sole-source contracts. Additionally, on top of the actual business contract, this program gives minority business owners access to a Business Opportunity Specialist, a mentor-protégé program, and business training, counseling, and executive development.

11. Asian Women Giving Circle (AWGC) Grants

The AWGC provides minority small business grants to Asian American women-led organizations and individual artists in NYC. Specifically, AWGC grants are awarded to businesses who are using arts and culture to bring about progressive social transformation, raising awareness and action around issues that affect Asian American women, girls, and families, and highlighting and promoting women’s central role in these projects.

The AWGC typically awards five to eight project grants in each cycle (usually on an annual basis) in amounts up to $15,000.

12. FedEx Small Business Grant Contest

The FedEx Small Business Grant Contest is a nationwide competition held by FedEx that awards $25,000 to around 10 different deserving business owners every year.

Although this contest doesn’t offer exclusive grants for minority-owned start-up businesses, many of the past winners have, in fact, been minority-owned businesses—and overall, the grants are awarded to those with a unique business idea that positively impacts the community.

The Bottom Line

At the end of the day, exploring and applying to the best minority small business grants may take time, but the effort is certainly worth the end result. With one of these grants, you’ll have free funding to start, grow, and manage your business. Plus, once you’ve used this financing successfully, you’ll find that it’s much easier to qualify for more traditional types of funding, like minority business loans and other debt-based financing products.

Article Sources:

1. BizJournals.com. “Minority-Owned Companies Driving Growth Among U.S. Businesses, Survey Says“
2. SBA.gov. “Access to Capital for Women- and Minority-Owned Businesses: Revisiting Key Variables“