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According to the U.S. Census Bureau, fewer than 20% of U.S. employer businesses are minority-owned. However, the owners of these 1.1 million minority businesses often face serious challenges when it comes to securing business financing.
In fact, a paper from Duke University and the UNC Kennan Institute for Private Enterprise found that black entrepreneurs are one-third more likely to apply for a loan out of fear of loan rejection, and that black entrepreneurs are one-third more likely to apply for a loan out of fear of being denied, and that there is a strong relationship between minority groups and white male business owners. It was found that there was a large disparity in funding.
Securing subsidies, particularly minority grants, is one solution aimed at increasing access to business capital for minority business owners. With grants, your business doesn't have to pay back the money it receives or share any part of your business with investors. However, grants are a very attractive source of funding, so you may face a lot of competition during the application process.
Here are 11 small business grants for minority business owners.
Loans for small and medium-sized businesses that are attracting attention
Loan amount
$10,000 to $500,000
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6 months
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$5,000 to $250,000
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American Express Business Blueprint™
Loan amount
$2,000 to $250,000
Monthly fee
Depends on loan period
At least 660 FICO at time of application
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American Express Business Blueprint™
Federal grants for small business minorities
1.Grants.gov
Grants.gov is one of the first resources you should consider for business grants (both minority grants and other opportunities). This database is maintained by the Office of Management and Budget (OMB) and contains information on over 1,000 federal grants. It also includes details about each program's eligibility requirements.
To apply for a grant through the Grants.gov system, you must first establish a Workspace account that you (and your team) will use to access the system's applications. Once you complete this step, you will be free to search for federal grants that match your business goals and apply for grants that you think are right for you.
2. USDA Rural Business Development Grant
The USDA Rural Business Development Grant (RBDG) is another federal resource that provides funding, technical assistance, and training to rural small businesses. There is no maximum grant limit, but $10,000 to $500,000 is the standard RBDG grant range.
To qualify for this USDA grant, you must own a small rural business with less than $1 million in annual revenue (gross revenue) and 50 or fewer new employees. If you think your business is eligible for funding, visit the USDA's website to learn how to speak with a business program specialist in your state. The specialist will advise you on the forms and applications that need to be filled out.
3. USDA Water and Waste Treatment Loan and Grant Program
USDA programs are not directly available to small businesses. However, small businesses (and households) may also benefit if eligible applicants apply. The program is designed to help improve local water and waste treatment infrastructure and is open to participation only by federally recognized local tribes, private nonprofit organizations, or state and local governments.
This assistance is provided as a loan that is repaid over a period of up to 40 years. The exact term and interest rate offered will depend on the importance of your infrastructure needs and the median household income in the area. In some cases, USDA may provide this assistance in the form of a grant rather than a loan.
4. Small Business Innovation Research and Small Business Technology Transfer Program
If your company is developing innovative new technologies through partnerships with research institutions, you may be eligible for grants from the Small Business Innovation Research (SBIR) or Small Business Technology Transfer (STTR) programs. . These grants may be awarded up to nearly $2 million.
There are no restrictions on minority status in these competitive programs.
Private subsidies for small and medium-sized enterprises and minorities
5. FedEx Small Business Grant Contest
Many small and medium-sized businesses are suffering from the effects of the coronavirus pandemic. In response to this crisis, FedEx created his FedEx Small Business Grant Contest. In 2022, 10 small businesses (defined as those with fewer than 100 employees) will receive one of the following grant packages:
- Grand Prize: Three winners will receive a $50,000 grant, $4,000 in FedEx Office credits for business and printing services, and more.
- 1st place: Seven winners will receive a $20,000 grant, $1,500 FedEx Office credit, and more.
Eligible businesses can create a FedEx account and enter the 2022 grant contest through February 28, 2022. The voting period and FedEx's announcement of the top 100 winners will run from March 22nd to March 31st, 2022. The final winner will be announced on May 4, 2022.
6. Coalition to Support Black Businesses
The Coalition to Back Black Businesses is a partnership of brands coming together with the goal of empowering Black-owned businesses.
The coalition is providing $14 million in minority grants, resources and training over four years through 2023, aimed at helping small businesses recover from pandemic-related setbacks. The coalition includes American Express, ADP, AIG Foundation, Altice USA, Dow, and S&P Global Foundation.
Selected companies will be eligible for a $5,000 grant each fall, along with training and mentoring benefits. Come summer, the first few grant recipients will receive an additional $25,000 Enhancement Grant as a means of additional funding and support.
Eligible businesses must be Black-owned businesses located in economically distressed areas. You can apply on the federation's website when the application process opens in the fall. The grant committee will randomly select her 400+ qualified applicants to receive cash prizes and other benefits.
7. National Black MBA Association Scale-Up Pitch Challenge
If you have an idea for a scalable Black-owned startup, you may find it helpful to explore the National Black MBA Association (NBMBAA) Scale-Up Pitch Challenge. NBMBAA designed the competition to “make big ideas bigger.” This contest is designed to give qualified startups the opportunity to connect with venture capitalists and other early-stage investors.
NBMBAA judges will also select three finalists to receive cash prizes. The grand prize is his small business grant worth $50,000.
If the application process is in-person, eligible companies can make a virtual pitch to a panel of judges by sharing their business idea. The finalist will then have the opportunity to give a live three-minute pitch to the judges explaining why their product or service is eligible for the grant.
Featured partner offers
Loan amount
$5,000 to $250,000
8. Asian women give grants to circles
Asian Women Giving Circle (AWGC) is a network dedicated to raising funds for projects led by Asian American women. Eligible projects must relate to arts and culture, promote social awareness about issues affecting Asian American girls, women, and families, and take place in New York City.
The Grants Committee will award grants of up to $15,000 per project. However, the total number of grants awarded depends on the availability of funding. Once the application process has started, you can submit your application online.
9. National Self-Employment Growth Subsidy Association
The National Association for the Self Employed (NASE) has awarded nearly $1 million in grants to small business members through its Growth Grants Program. Eligible small businesses can receive grants worth up to $4,000 each quarter through this program.
To apply for the Growth Grant program, you must be a member of NASE. Once you join, you will have the opportunity to apply for small business grants on a quarterly basis according to the schedule below.
- From January to March
- From April to June
- From July to September
- From October to December
The Grants Committee will review all applications in the month following the end of the quarterly submission deadline. Recipients must demonstrate an identifiable business need, explain how the grant will be used to meet that need, and demonstrate the potential for business growth and success if they receive funding. It won't.
10. Break time for small businesses
Black-owned and diverse businesses can seek grants through LegalZoom and the Fast Break for Small Business program sponsored by the NBA, WNBA, and NBA. The program aims to distribute grants totaling $6 million in awards to more than 5,000 small businesses. The grants are offered in increments of $10,000, and winners will also receive $500 for use of the LegalZoom service.
The next round of grant applications will open in spring 2022. Sign up online to stay up to date on future funding opportunities.
11. Indigenous Development Research Institute Grant
Since 1993, First Nations have provided grants totaling $51.6 million to support Native American organizations and projects, along with technical resources.
Past grant opportunities include programs such as COVID-19 response, Indigenous youth and cultural support, university scholarships, and Indigenous youth business plan competitions, among others. Visit his Indigenous website to learn more about new grant opportunities as they become available.
Alternatives to ethnic minority small business subsidies
Other options to consider if grants don't work for your business include:
- microloan. These are small loans available through SBA-affiliated financial institutions and nonprofit organizations designed to support minority-owned businesses with low capital requirements.
- CDFI. Community development financial institutions are banks, nonprofit organizations, and credit unions that receive special government funding to expand access to affordable loans in underserved communities.
- venture capital. If you don't mind giving up some control over your business idea, finding an angel investor can help you get the funding and advice you need.
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