Minority business grants are a type of assistance for minority-owned enterprises, typically small businesses. Unlike loans, you do not need to repay a grant. However, the IRS usually regard grants as taxable business income.
Minority business grants are available from both public and commercial sources in the United States. While the federal government does not provide grant funds to begin or grow a business, numerous private grantors do. Here, we’ll see some grants for minority-owned businesses and how you can apply for them.
Where To Get Grants For Minority-Owned Businesses
#1. Grants.gov
Grants.gov is a nationally run website that provides over 1,000 financing opportunities, including those for small and minority-owned enterprises.
Federal entities such as the Department of Commerce and the Small Business Administration offer these grants. After you sign up, you can browse the available grants to identify the ones that are most appropriate for your company.
#2. The USDA Rural Business Development Grant Program
Rural Business Development Grants can be utilized for technical assistance, training, and other programs that benefit rural areas. While not limited to minority-owned enterprises, the USDA Rural Business Development Grant Program is a vital resource for rural areas where minority populations are major sources of economic growth.
The USDA provides two types of grants: Opportunity grants and Enterprise grants. Both can be utilized for projects such as community improvement, feasibility studies, strategic planning, and leadership training. However, Enterprise grants go above and beyond to support programs such as training and technical assistance, rural distance learning, and land purchase.
#3. Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) Programs
The SBIR and STTR programs provide early-stage, high-risk funding to small enterprises that do federal research/research and development (R/R&D). Grants are provided by eleven federal agencies that currently engage in the programs, including the Department of Health and Human Services (HHS).
The National Institute on Minority Health and Health Disparities (NIMHD) of the HHS provides grant money to small enterprises of all backgrounds that provide research and development relevant to the health equality concerns encountered by underrepresented areas.
Both the SBIR and STTR programs have three phases: Phase I awards can be worth up to $250,000, while Phase II awards are often worth $750,000 over two years. These programs do not provide Phase III money, however, there may be funding and production contracts available from non-SBIR/STTR sources.
Private Grants For Minority-Owned Businesses
Several organizations provide general-purpose grants to entrepreneurs of various backgrounds, but some go above and beyond to promote diverse firms. The following grants are specifically for minority-owned and female businesses:
#1. Stacy’s Rise Project
Since 2017, Stacy’s has provided cash, resources, and mentorship to thousands of women entrepreneurs, including entrepreneurs of color. Stacy’s, in collaboration with Hello Alice, a startup that helps small businesses succeed, and Hello Sunshine, a media brand created by Reese Witherspoon, is presently awarding $15,000 in business grants to women creators in the packaged food and beverage market.
In addition to a financial award, each winner will receive mentorship from a PepsiCo executive, visibility on Stacy’s platform and those of its partners, and access to a peer network of other female entrepreneurs. To be eligible, you must:
- Identify as a woman entrepreneur or a woman entrepreneur of color.
- Be the company’s chief executive (founder or co-founder) and run a for-profit, U.S.-based corporation providing consumer packaged goods.
- Annualized sales must range between $25,000 and $1 million.
- Must be at least 50% female-founded or currently 50% female-owned.
#2. Coalition To Back Black Businesses
The Coalition to Back Black Businesses is an annual grant effort administered by the US Chamber of Commerce Foundation that has vowed to endow a whopping $14 million to promote Black-owned small businesses in economically disadvantaged neighbourhoods.
The program begins its final year of funding in August 2023. In September, a small number of randomly selected finalists and waitlisted finalists will need to submit a full grant application. (Special consideration will be given to Black women-owned enterprises, which must account for at least 25% of the grants awarded.) The recipients of the $5,000 grants will be revealed in October 2023. These winners are eligible to apply for an extra $25,000 enhancement grant the following summer.
#3. The Sogal Black Founder Startup Grant
Each year, the SoGal Black Founder Startup Grant, with the help of various partners, provides multiple $10,000 and $5,000 cash grants to Black women and Black nonbinary founders. Awardees also receive fundraising and technical assistance, as well as “ask-me-anything” access to the SoGal Foundation and SoGal Ventures teams. To qualify, you must:
- Self-identify as a Black woman or Black nonbinary entrepreneur (including multiracial Black women and multiracial Black nonbinary people).
- Have a legally registered business.
- Plan to seek investor funding to scale now or in the future.
- Have a scalable, high-impact solution or idea that has the potential to become the next billion-dollar corporation.
#4. Fearless Strivers Grant Contest
The Fearless Strivers Grant Contest is a cooperation between Mastercard and the Fearless Fund (a venture capital fund that invests in firms run by women of color seeking pre-seed, seed-level, or series-A financing). The program will provide $10,000 grants to 11 small businesses around the country.
Winners will also receive tools to help their internet business thrive as well as one-on-one mentoring. While the national program provides a single $10,000 grant each month, additional grants are frequently available to residents of certain locations throughout the year.
To be eligible, you must be a Black woman who is a legal U.S. resident, 18 years old or older, and the primary owner of a U.S.-based small business.
#5. Digitalundivided’s Breakthrough Program
If you need assistance with growth marketing or improving your consumer analytics, this grant could be your big break. Each startup accepted into Digitalundivided’s yearly BREAKTHROUGH program receives coaching on these themes as well as a $5,000 cash prize.
The program is a collaboration between Digitalundivided, a nonprofit organization dedicated to stimulating economic growth for Latina and Black women entrepreneurs, and JPMorgan Chase’s Advancing Black Pathways, an initiative to help the Black community achieve economic success and empowerment. Keep an eye on Digitalundivided’s website for updates on the next award cycles. To be eligible, each applicant must:
- Identify as a woman
- Identify as Black or Latina (or both)
- You must be 18 years old or older.
- Have a business that has been registered for at least a year
- Have control of a well-established company.
- Have a technological component to your firm (such as a website or mobile app).
- Make a minimum of $50,000 in annual business revenue.
#6. The Power Forward Small Business Grant
The Power Forward Small Business Grant is funded by a $1 million donation from Vistaprint, the Boston Celtics Shamrock Foundation, and the NAACP. The $25,000 grants are distributed on a rolling basis to Black-owned small companies in New England. Recipients will have the opportunity to be featured on national co-branded channels and will receive marketing and design resources tailored to their unique needs.
To qualify, you must be a Black-owned business with a maximum of 25 employees and be based and operating in Massachusetts, Maine, New Hampshire, Rhode Island, Vermont, or select parts of Connecticut.
#7. EnrichHER Small Business Grant
EnrichHER awards $5,000 grants to female and minority businesses. The company is a Black woman-owned FinTech lender that has so far distributed $14 million in financing to minority-owned businesses in 47 U.S. states. The funds can be used for anything from rebranding your firm to establishing a new product or service.
#8. Comcast Rise Investment Fund
Comcast NBCUniversal unveiled a multi-year initiative in 2020 to combat injustice and inequity. To that end, they committed to invest $75 million in cash and $25 million in media over the next three years. The Comcast RISE Investment Fund is a component of that strategy. The program will award 500 grants of $10,000 each. The grants are available in five cities:
- Chicago, IL
- Miami, FL
- Oakland, CA
- Seattle, WA
- Washington, D.C.
Each city is given 100 grants. To qualify, your business must be at least 51% owned and operated by a person of color, including Black, Indigenous, Hispanic, and Asian American entrepreneurs. This grant is open to all female entrepreneurs.
#9. Galaxy of Stars Grant
Galaxy of Stars is a community for minority and female entrepreneurs. It’s a terrific place for business owners to encourage one another to accomplish their goals. The organization’s $2,750 Galaxy Grant is offered to ethnic minorities and women who operate a business or want to start one. As a testament to the Galaxy of Stars’ emphasis on mutual assistance, they have an additional incentive for referrals: if you refer a friend to the grant and they win, the grant value is quadrupled, and both applicants receive a cash prize.
#10. Wish Local Empowerment Program
Wish is an e-commerce platform that allows physical establishments to become pickup destinations for online orders through a program called Wish Local. She has offered to give 4,000 Wish Local small business partners grants ranging from $500 to $2,000.
There are no precise limitations for spending the grant money, so you can use it for anything from real estate or equipment acquisition to working capital. Applicants must be Black-owned businesses with 20 or fewer employees and yearly revenue of less than $1 million.
Grants For Minority-Owned Businesses: How To Apply
Depending on the award, the application for a minority business grant may differ slightly. Government grants, in particular, tend to have a more extensive application and evaluation process.
In general, the application process for a minority company award will look something like this:
- The business owner supplies information about themselves and their company to ensure eligibility (for government grants, this may also include some sort of registration with the grant organization).
- If there are many distinct grants to choose from, the grant is picked from a set of alternatives (in this case, there may be further processes to limit funding categories or specific grant projects).
- The business owner applies for the grant and provides the necessary papers.
- The grantor evaluates all applications and notifies applicants of their success or status.
Documents Required for a Minority Business Grant
Because minority business grants vary in purpose and eligibility requirements, the documentation required to apply for one will vary depending on the nature of the grant in question.
Documents that may be requested as part of the application process for a minority business grant include the following to confirm eligibility:
- Financial documentation
- Personal and/or business information and identification
- Application forms
- Detailed business plans, project proposals, or abstracts
- Budget forecasts
- CVs or resumes
- References
Tips for a Successful Application
Because minority business grants are effectively free money, there is usually a lot of rivalry to get this form of assistance. As a result, entrepreneurs contemplating grant opportunities should provide enough time to prepare a complete and well-thought-out application.
Before beginning the application process for a minority business grant, it is critical to thoroughly study the eligibility criteria and ensure that they are met. It may also be beneficial to compile the relevant information ahead of time so that it is ready and in one location when the application is submitted.
Many grants are issued regularly—whether quarterly, annually, or according to a project schedule—so it might be beneficial to keep track of and set reminders for the dates associated with grant applications to ensure you can take advantage of the opportunity.
Many resources are available to help with grant writing. Frequently, especially for government grants, the granting agency may provide prior examples of successful grant applications for reference, or organize events or webinars to share more information about the program and its requirements. Many public or nonprofit groups also offer grant-writing support, typically for free, so exploring programs like these in your region might be beneficial.
How Do You Market A Minority-Owned Business?
Building partnerships with other minority-owned businesses is one of the best strategies to prosper as a minority-owned business. These connections can provide significant networking opportunities, assist you in gaining access to new markets, and provide you with a competitive advantage.
What Do Minority Owners Do?
Minority owners may be brought in to help with expansion, acquisitions, or other strategic goals, and they frequently bring essential skills in addition to the monetary commitment they make to the business.
Which State Has The Most Minority-owned Businesses?
California has the most minority-owned enterprises, with 1.89 million. In addition, the Golden State boasts the most small companies of any of the 50 states.
In Conclusion
Seeking grants is a terrific approach for minorities to get help starting and growing their businesses. These grants may benefit firms in underserved communities and business owners who may not have easy access to other resources.
- How To Get Business Grants: A Complete Guide
- How To Apply For A Small Business Grant
- Federal Grants For Small Business
- How To Get A Government Grant: Here’s All You Need To Know
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