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Less than 20% of U.S. employer businesses are minority-owned, according to the U.S. Census Bureau. Yet the owners of these 1.1 million minority-owned businesses often face heightened challenges when it comes to securing business funding.
In fact, Black entrepreneurs were three times less likely to apply for credit out of fear of loan denial, according to a paper by Duke University and the UNC Kenan Institute of Private Enterprise that found significant funding gaps between minority groups and white male business owners.
Securing grants—and minority grants in particular—is one solution that aims to help increase access to business funding for minority business owners. With grants, you don’t have to repay the funding your business receives, nor do you have to share a piece of your business with investors. However, because grants are such an attractive funding source, you’re likely to face a lot of competition during the application process.
Here are 10 small business grants for minority business owners.
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Grants.gov is one of the first resources you may want to look into for business grants—both minority grants and other opportunities. The database, maintained by the Office of Management and Budget (OMB), contains information about more than 1,000 federal grants. It also includes details about the eligibility requirements for each program.
To apply for a grant through the Grants.gov system, you’ll need to first establish a Workspace account that you (and your team) use to access the system’s applications. Once you complete this step, you’ll be free to search for federal grants that align with your business goals and apply for those you believe are a good match for you.
The USDA Rural Business Development Grant (RBDG) is another federal resource that provides small rural businesses with funding, technical assistance and training. While there is no maximum grant amount, $10,000 to $500,000 is the standard RBDG award range.
To be eligible for this USDA grant, you must own a small rural business that earns less than $1 million per year (gross revenue) and has 50 new workers or less. If you believe your business may be eligible for funding, you can visit the USDA website for information on how to speak with a Business Program Specialist in your state. The specialist can give you guidance regarding the forms and applications you will need to complete.
Many small businesses have struggled as a result of the Covid-19 pandemic. In response to the crisis, FedEx created the FedEx Small Business Grant Contest. For the year 2022, 10 small businesses (defined as having less than 100 employees) will receive one of the following grant award packages.
Eligible businesses can create a FedEx account and enter the 2022 grant contest until February 28, 2022. The voting period and when FedEx announces the top 100 winners runs from March 22-31, 2022. The final winners are announced May 4, 2022.
The Coalition to Back Black Businesses is a partnership of several brands that have come together with the goal of empowering Black-owned businesses.
The Coalition is supplying $14 million in minority grants, resources and training over a span of four years through 2023 that is meant 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.
Select businesses will qualify for grants in the amount of $5,000 each fall, in combination with training and mentorship benefits. When the summer arrives, a few initial grant recipients will receive additional $25,000 enhancement grants as a means of additional funding and support.
Eligible businesses must be Black-owned enterprises located in economically distressed communities. You can apply on the Coalition’s website in the fall when the application process opens. The grant committee will select 400 or more eligible applicants at random to receive cash awards and other benefits.
If you have an idea for a Black-owned startup that is scalable, it might benefit you to research the National Black MBA Association (NBMBAA) Scale-Up Pitch Challenge. NBMBAA designed a competition to “Make Big Ideas Bigger.” The competition aims to give eligible startups the opportunity to connect with venture capitalists and other early-stage investors.
NBMBAA’s judges will also select three finalists to receive cash awards. The grand prize is a small business grant worth $50,000.
When the application process is live, eligible businesses can make a virtual pitch to a panel of judges by sharing their business idea. Finalists will later have the chance to make a live, three-minute pitch to the judges explaining why their product or service should be considered for the grant.
The Asian Women Giving Circle (AWGC) is a network that works to raise funds for Asian American women-led projects. Eligible projects must be related to arts and culture, promote social awareness regarding issues that affect Asian American girls, women and families, and be located in New York City.
The grant committee awards grants of up to $15,000 per project. But the total number of grants awarded depends on the availability of funding. When the application process is live, you can submit your application online.
The National Association for the Self-Employed (NASE) has awarded close to $1 million in grants to small business members through its Growth Grants program. Eligible small businesses can receive grants worth as much as $4,000 through the program—awarded on a quarterly basis.
You must become a member of NASE before you can apply for the Growth Grant program. Once you join, you will have the opportunity to apply for the small business grants on a quarterly basis, according to the schedule below:
The grant committee reviews all applications the month after the quarterly submission deadline ends. Recipients must demonstrate an identifiable business need, explain how they would use the grant to satisfy that need, and show a potential for growth and success should their business receive the funds.
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Black-owned and diverse businesses can seek grant funding through the Fast Break for Small Business program, which is sponsored by LegalZoom as well as the NBA, WNBA and NBA. The program aims to distribute grants to more than 5,000 small businesses for a total of $6 million in cash awards. Grants come in $10,000 increments, and winners will also receive $500 in LegalZoom services.
The next round of grant applications opens in the spring of 2022. You can sign up online for updates regarding future funding opportunities.
Since 1993, First Nations has been offering grants to help support Native American organizations and projects, totaling $51.6 million in grants, along with technical resources.
Past grant opportunities include programs for Covid-19 response, native youth and culture support, college scholarships and a native youth business plan competition, among others. Visit the First Nations website to learn more about new grant opportunities when they become available.
The USDA offers a grant program to nonprofit organizations, government entities and federally-recognized tribes to support businesses from eligible rural communities that operate in the water and waste disposal fields. Eligible business recipients must also have a maximum of 50 new employees for a chance to qualify for funding.
The USDA offers both loans and grants to eligible businesses—both minority-owned and otherwise. Grants may be combined with USDA loans in certain circumstances to keep the overall financing costs affordable to qualified borrowers. You can use the grants for a variety of purposes, including:
You can apply for USDA funding (grants and loans) once a year. Your USDA state office manages the application process.
