Studies have shown that compared to white entrepreneurs, Black, indigenous, and people of color receive less funding for their businesses and at very high rates of interest. Research at Duke University and the UNC Kenan Institute of Private Enterprise has revealed a vast funding gap between minority groups and white male entrepreneurs.
Small business grants are not only valuable alternatives to setting up new businesses but increase capital. However, availing of small business grants may be competitive, and the application process is lengthy as well. But the positive side of small business grants is that you do not have to repay them. Below are a few small business grants that may be best suited for business owners from minority communities and what one should do to apply for these grants.
Grants.gov is a federal portal that offers guidelines for eligibility, application information, and deadlines for over 1,000 small business grants. All the federal government agencies that provide grants post their details on this portal. More than 24 federal agencies offer small business grants, including the Department of the Interior, National Aeronautics and Space Administration, Department of Agriculture, and Environmental Protection Agency. To avail of these grants, minority business owners may narrow their search based on categories such as “small business grants” or their eligibility criteria.
USDA Rural Business Development Grants
If your business is operating in a rural area, you may explore the Rural Business Development Grant program from USDA. This grant is another federal resource that offers small business grants between $10,000 and $500,000. To get this grant, you must own a relatively small business in a rural area that earns less than $1 million per year (gross revenue) and has 50 workers or less. This grant is available to companies operating in rural areas having a population under 50,000. In addition, it is mandatory to use the grant money for projects that benefit any rural area or town. Various entities are eligible for this program, including nonprofit corporations, federally recognized tribes, rural cooperatives, state agencies, etc.
FedEx Small Business Grant Contest
Covid-19 has hit many small businesses hard. Therefore, FedEx set up a FedEx Small Business Grant Contest to help struggling entrepreneurs in and after the pandemic. In 2022, 10 small businesses with fewer than 100 employees will be selected for the grant award and packages mentioned below. The Grand Prize will go to three winners who will receive a $50,000 grant, including $4,000 in FedEx Office credits. Seven winners will receive First Place each, including $20,000 in commission and $1,500 in FedEx Office credits, among other benefits.
The Coalition to Back Black Businesses
The Coalition to Back Black Businesses program is a partnership of several brands that have joined hands to empower Black-owned businesses. And this program provides $14 million in minority grants, resources, and training for four years through 2023 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. Selected companies will qualify for the grant money of $5,000 each, training and mentorship benefits. Some initial grant recipients will receive an additional $25,000 enhancement grant for additional funding and support in the summer. The eligible businesses must be Black-owned enterprises located in economically distressed communities.
National Black MBA Association
If you have an idea for a viable Black-owned startup, you may explore the National Black MBA Association’s Scale-Up Pitch Challenge. This program aims to Make Big Ideas Bigger. The competition’s objective is to offer eligible startups an opportunity to connect with venture capitalists and other early-stage investors. NBMBAA’s judges will select three finalists who will receive cash awards as well. The grand prize is a small business grant worth $50,000.
Minority Business Development Agency
The Minority Business Development Agency (MBDA) offers grants to minority-owned businesses through its Minority Business Centers all over the United States. Minority-owned businesses can receive business consulting and financial assistance. In addition, the MBDA also operates a separate continuing grant competition program. In 2021, this program sought proposals to open and use one of four MBDA Export Centers.
SBA 8(a) Business Development Program
SBA 8(a) Business Development Program helps small business owners who are socially or economically disadvantaged to get set-aside and sole-source government contracts. Although this program is not technically a grant program, it offers excellent opportunities for minority-owned businesses. In addition to the actual business contract, those who qualify for the program also receive access to a Business Opportunity Specialist, a mentor-protégé program, business training, counseling, and executive development.
National Association for the Self-Employed Growth Grants Program
National Association for the Self-Employed (NASE) is a nonprofit organization that runs its Growth Grants Program to offer microgrants up to $4,000 each. These grants aim to help businesses grow. NASE does not only assist minority-owned businesses but also small businesses. Businesses often find it challenging to procure financing from other sources. Moreover, NASE Growth Grant can be used for various business purposes, including purchasing equipment, hiring employees, or creating marketing materials. NASE offers grants every month, and applications are reviewed quarterly.
Fast Break for Small Business
The Fast Break for Small Business offers grants to Black-owned and diverse businesses. LegalZoom sponsors this program in addition to the NBA and WNBA. Fast Break for Small Business aims to distribute grants to more than 5,000 small businesses for $6 million in cash awards. Assistance is provided in increments of $10,000, and winners receive $500 in LegalZoom services. The next round of grant applications will reopen during the 2022-23 NBA season.
First Nations Development Institute Grants
First Nations is a nonprofit that runs a national grant-making program offering technical and financial resources to Native nonprofits and tribes. As their available grants change, one can look for current applications on the First Nations website.
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