Minority small business grants are designed to provide funds and opportunities to business owners who belong to historically marginalized communities. Unlike loans, these grants offer capital you don’t have to pay back. Plus, many grants also provide free coaching and other forms of support.
Read on for a closer look at how small business grants for minorities work, key places you can find these grants, and how to apply for a small business grant.
Key Points
• Small business grants aim to provide financial assistance to minority-owned businesses to promote diversity, equity, and inclusion in the entrepreneurial space.
• Unlike small business loans, minority business grants do not require repayment.
• Both federal, state, and private organizations offer grants, including programs like the Minority Business Development Agency (MBDA).
• In addition to grants, small businesses who need funding can apply for small business loans, business lines of credit, microloans, and more.
How Small Business Grants for Minorities Work
Minority business grants are for people who identify as Asian, Pacific Islander, Hispanic, Latino, Native American, Black, multiracial, and other non-white races or ethnicities. They are designed to provide financial resources to individuals who may otherwise find it difficult to get ahead in the business world.
Grants do not have to be paid back the way a loan would. Depending on the source, this money can be used for a variety of purposes, including:
• Equipment
• Marketing
• Payroll
• Office space
• New product line
Applying for small business grants will likely require some legwork. However, those willing to put in the effort could be rewarded with an injection of capital that could help their businesses thrive.
Recommended: Survey of Hispanic-Owned Businesses
Private Small Business Grants for Minorities
There are many grants for minority business owners that you can apply for. Here’s a list of options that can serve as a jumping off point.
1. NAACP Black-Owned Business Grants
The NAACP partners with other companies and organizations to offer several grants. Since the group is continually looking for new partners, small business grants for Black entrepreneurs change from time to time — so keep an eye out for new ones.
A good place to start is the Hello Alice and NAACP partnership site, where you can find a running list of Black minority business grants.
Qualifications vary by grant, though all require that businesses be Black-owned.
2. GrantWatch
GrantWatch provides a database of small business grants that allows you to search by grant topics. When using the group’s search function, you can select “small business” as the recipient and “BIPOC” (which stands for Black, Indigenous, and People of Color) as the category to home in on grants designed specifically for minority business owners.
As GrantWatch rounds up thousands of grants, including those for nonprofits, individuals, and small businesses, there isn’t one standard set of qualifications.
3. Galaxy Grants
Galaxy of Stars is a community of minority and women business owners offering support to entrepreneurs. Additionally, they provide a grant opportunity for minority business owners worth $4,250 to start or grow a company. Unlike many other grant options, you only need to fill out a brief form with the absolute basics to enter. Any and all women small business owners are encouraged to apply.
They offer additional grants or financial awards on occasion, so you may want to bookmark this site and check back from time to time.
Recommended: Small Business Loans for Women
4. First Nations Development Institute
The First Nations Development Institute offers grant opportunities to Native Americans in 45 states, the District of Columbia, and U.S. Territory American Samoa. Their grants change throughout the year, and not all grants are specifically for small business owners, as some can support small business ventures or business-minded students. New grants opportunities are posted periodically on the website.
5. IFundWomen
IFundWomen is a funding marketplace exclusively for women-owned businesses. The platform provides access to small business grants from corporate partners, along with expert business coaching and connections to other women business owners. By filling out the IFundWomen Universal Grant Application, you put your business in the running for all the grant opportunities that come their way. In addition to upcoming grants, you will be the first to hear about new funding opportunities and receive additional resources from the IFundWomen community.
6. Amber Grant
The Amber Grant is a funding initiative designed to support women entrepreneurs, including minority women, in launching and growing their small businesses. Created in honor of Amber Wigdahl, a young woman who passed away before realizing her entrepreneurial dreams, the grant offers $10,000 in monthly awards. Additionally, an annual $25,000 grant is awarded to one of the monthly winners.
7. Comcast RISE
The Comcast RISE grant is a program designed to support minority-owned small businesses with marketing, media, and technology resources. The goal of Comcast RISE (Representation, Investment, Strength, and Empowerment) is to empower minority entrepreneurs by offering critical tools and resources to help them succeed, grow, and thrive in an increasingly competitive marketplace.
8. FedEx Small Business Grant
FedEx offers an annual grant competition that provides funding to minority and other small business owners. Winners can receive up to $50,000, along with valuable business services like FedEx Office® print and business services credits.
9. Fast Break for Small Business (LegalZoom and NBA)
LegalZoom partners with the NBA to provide $10,000 grants and $500 in LegalZoom services to minority-owned small businesses, aiming to assist businesses with legal compliance and growth. The grant can be used to help start, run, and grow businesses — known as the perfect play.
10. Asian Women Giving Circle Grant
The Asian Women Giving Circle Grant supports Asian-American women entrepreneurs focused on arts and social change. It offers funding for projects that raise awareness and bring positive social transformation within the community. Each grant is $8,000, and typically 8-10 grants are awarded annually.
Recommended: 30 Small Business Grants for Women
Federal Grants for Minority Small Business Owners
Many federal government agencies offer grants to businesses, including minority-owned businesses. Here are two resources that can help you find federal grants.
Grants.gov
Grants.gov is a database that helps grant seekers find and apply for federal funding opportunities. It stores information on more than 1,000 grant programs offered by a range of federal grant-making agencies, including the U.S. Department of Commerce and the U.S. Small Business Administration (SBA). To apply, you’ll need to create an account, as well as a unique entity ID, which lets you apply for federal grants and bid on government contracts.
Recommended: Small Business Grants in Arizona
United States Department of Agriculture (USDA) Grants
Though not limited to minority business owners, the USDA provides financial backing and technical assistance for rural businesses to create quality jobs and improve the quality of life in rural areas. USDA Rural Business Development Grants are available to small and large for-profit businesses, as well as nonprofit and tribal entities. The funds can be used for a wide range of projects, from agriculture innovation to housing, water quality, health care, and rural job creation in general.
How Do I Apply for a Small Business Grant?
Small business grant applications vary widely. Some grantors require full grant proposals, while others only ask for a small amount of information. Here are some steps that can help you get started.
1. Check the grant’s requirements. These are often very specific, so be sure you meet the basic program requirements, including location, business size, industry, and any founder requirements. Some may even require that you have a membership to a specific organization before applying.
2. Collect all of your documents. You’ll likely need to supply a business plan that lays out why you’re applying for the grant and how you plan to use the funds. In addition, you may need:
• Employer Identification Number (EIN)
• DUNS number
• Revenue history
• Organizational chart, including the number of employees
• Bank statements
• Tax returns
• List of contracts your business holds
3. Fill out the application. This is typically the most time-consuming part of the process. You may need to answer multiple questions about why you need the funds, your plans for their use, and how your business contributes to the community.
Recommended: 6 Step Guide to Getting a Small Business Loan
Other Resources for Minority Business Owners
In addition to the above grants for minority business owners, here are some other helpful resources you may want to look into.
National Minority Supplier Development Council
The National Minority Supplier Development Council strives to provide business opportunities for certified minority businesses through training, networking, and funding opportunities. With over 1,500 corporate members, the NMSDC plays a key role in advancing minority-owned businesses and driving economic inclusion.
SBA Microloan Program
The U.S. Small Business Administration’s (SBA’s) microloan program provides up to $50,000 to new and existing startups. It is fully funded by the SBA but administered by an intermediary network of nonprofit community-based lenders, rather than traditional banks.
Unlike many traditional loans, SBA microloans are available to small business owners with no credit history, as well as lower incomes. The program is also geared toward businesses otherwise underserved by traditional banks, including women- and minority-owned businesses and those in low-income communities. Exact eligibility requirements vary by lender.
To apply for a microloan, work with an SBA-approved intermediary in your area.
Operation Hope’s Small Business Development Program
Operation Hope’s Small Business Development Program is an intensive course providing training in business basics like financial counseling, personal development, and access to professional services. It focuses on empowering minority business owners by giving them the tools to succeed in competitive markets.
SBA’s 8(a) Business Development Program
The SBA’s 8(a) Business Development Program aims to help socially and economically disadvantaged people or entities by assisting in applying for federal contracting opportunities. They also offer mentoring and business training.
To qualify, businesses must be minority-owned, meet size standards, and demonstrate the owner’s economic disadvantage and management control over the company.
Alternatives to Small Business Grants
Small Business Loans
If grants aren’t available for your business right now or you need faster funding, you may want to look into different types of small business loans. While banks typically have strict qualification requirements, such as at least two years in business and a minimum amount of revenue per year, online lenders tend to be more flexible, as well as faster to fund (though rates are typically higher).
Business Line of Credit
A business line of credit is a type of small business funding that allows businesses to borrow up to a predetermined limit as needed, rather than receiving a lump sum. Similar to a credit card, funds can be drawn and repaid repeatedly, with interest charged only on the amount borrowed.
Microloans
Microloans are small, short-term loans designed to help small businesses and startups with limited access to traditional financing. Typically ranging from a few hundred to $50,000, microloans are often offered by nonprofit organizations, community lenders, or government programs like the U.S. Small Business Administration (SBA).
Recommended: Microloans for Women-Owned Small Businesses
The Takeaway
There are many grants available to small businesses owned by minorities, meaning you can access cash that you don’t have to repay. While it does take some time researching and applying for grants, it can be a valuable source of funding to get your small business off the ground or help it expand. Since competition can be stiff, you may also want to investigate other sources of capital for your business.
If you’re seeking financing for your business, SoFi is here to support you. On SoFi’s marketplace, you can shop and compare financing options for your business in minutes.
FAQ
What is the best source of funding for small businesses?
The best source of funding for small businesses depends on the business’s needs and goals. Common options include small business loans, grants, venture capital, angel investors, and business lines of credit. For flexible, non-repayable funds, grants are ideal, while loans and lines of credit offer structured financing.
Does the government give money to startups?
Yes, there are government programs offering small business loans and grants to startups. Those in specific sectors like technology, research, or those owned by minorities and women may have an easier time finding government assistance, though.
What organization helps small business owners borrow money?
The Small Business Administration (SBA) helps small business owners borrow money by providing access to loan programs, such as 7(a) loans, 504 loans, and microloans. The SBA partners with banks, credit unions, and other lenders, offering guarantees to reduce the risk for lenders and making loans more accessible.
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