Support for Minority-Owned businesses

The COVID-19 pandemic has been hard for everyone, but minority-owned businesses have been particularly hard hit. For example, analysis from the Federal Reserve Bank of New York looked at the numbers of active business owners between February and April 2020. The survey found that Black-owned businesses were nearly twice as likely to shut down in comparison to overall closure rates. During this same period, the number of Latinx business owners dropped by 32%, and Asian business owners fell by 26%.

Even in pre-COVID times, minority-owned businesses often face extra challenges to get off the ground. From lower loan approval rates to less working capital, minority business owners frequently have fewer resources to work with. Keep reading to learn about private loans, grants, and government assistance that could help.

Minority business loans

There are numerous loan programs, both private and government-backed, designed to support minority business owners. Here are a few of the top minority business loans to apply for:

1. Accion

This nonprofit organization offers networking and resources for a diverse range of start-up business owners and entrepreneurs. Financial aid includes a comprehensive loan program specifically designed for minority business owners.

2. Foundation for Business Equity

Based in Massachusetts, this foundation’s Business Equity Initiative was set up to provide funding for Black and Latinx business owners. Currently, available aid includes flexible loans for minority-owned businesses pulling in a minimum of $250,000 in revenue.

3. Minority Business Development Agency

The Minority Business Development Agency (MBDA) is a branch of the U.S. Department of Commerce. It offers a wealth of services to assist minority business enterprises, including training, contracts, and market outreach. Web seminars, networking events, and minority business grants are also available, as well as numerous loans.

Minority-owned business grants

Your first port of call for grants should be the U.S. government, which offers federal grants for a wide selection of different businesses. Visit grants.gov to search through over 1,000 federal programs and fill out relevant applications. As well as these federal grants, there are plenty of additional minority business grants out there, like the following:

1. Local Initiatives Support Corporation (LISC)

This nonprofit works to revitalize communities across the nation with state-specific mentorship and support. The LISC also provides a Small Business Relief grant to help small businesses get back on their feet after disasters like the COVID-19 crisis.

2. National Minority Supplier Development Council (NMSDC)

The NMSDC’s Business Consortium Fund is a grant program designed to support minority-owned businesses. There’s a heavy corporate focus to this nonprofit organization, with Centers of Excellence set up to develop relationships with corporations. With certification into the Corporate Plus program, businesses can also bid for national contracts and grow their networks.

Minority-owned business support

Apart from the grants and loans mentioned above, you’ll find a number of other initiatives providing resources.

1. One Million Black Women

Goldman Sachs has teamed up with organizations led by Black women to launch this investment program. One Million Black Women is offering $100 million in support and $10 billion in direct investment capital to get your business off the ground.

2. Code2040

This San Francisco-based nonprofit is actively working to address racial disparities in the tech sector, offering training and networking for minority owned tech businesses. It also helps to connect Black and Latinx college students with career openings at established tech companies.

3. Small Business Administration

The government’s Small Business Administration (SBA) offers the 8(a) certification to qualifying minority business enterprises. If you qualify, you’re eligible to bid for federal contracts and take part in a corporate mentorship program. In addition to 8(a), the SBA also has a 7(j) program that helps minority business owners with one-on-one consultations. These consultations cover everything from marketing to accounting as well as contract management and business compliance, to help your business grow.

Finally, it’s always a good idea to look to your local chambers of commerce as you start to grow your small business. Most states have chambers of commerce dedicated to specific minority groups, like New York’s Black Chamber of Commerce and Florida’s Minority Chamber of Commerce.

While more work is needed to address persistent inequality, the resources listed above offer a snapshot of available assistance.

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