Funding is the lifeblood of small businesses. Sadly, that resource is not always available, particularly for entrepreneurs from historically marginalized groups. In this article, we’ll introduce you to some of the organizations that are attempting to break down those funding barriers.
Here are a few of the reasons why we feel that’s important:
- There are currently 4 million minority-owned businesses in the U.S.
- One million minority-owned businesses have opened in the past 10 years
- Collectively, minority-owned businesses produce $700 million in annual sales
If your business is minority-owned, there are private and public grants available to you, along with several federal and state resources you can access to help you grow your business.
Small business grants vs. business loans
Grants and loans have a few major differences. Grants are awards that government, private, or nonprofit organizations give based on need, which don’t need to be paid back. Small business loans come from financial institutions and are approved based on the credit history of the business and/or the business owner. Borrowers typically repay business loans on a set schedule, with interest.
Private small business grant opportunities
Minority-owned small business owners may find it challenging to acquire the funding they need to operate. Lending criteria with banks and credit unions can be strict. Funding through small business grants is an alternative to that. Here are a few grant opportunities that could be available to you.
Wish Local Empowerment Grant
The Wish Local Empowerment Grant is a grant of $500 to $2,000 made available to black-owned business owners. These grants are part of a $2 million fund set aside by the ecommerce platform Wish.com. Their goal is to help fund up to 4,000 black-owned businesses.
How to apply
Applications for this grant are accepted online at the Wish Local Empowerment website. You need to submit your business information and why you feel your company is deserving of the grant. Signing up for the Wish ecommerce platform is not required.
HerRise MicroGrant
Women of color are one of the fastest-growing demographics in the small business world. The HerRise MicroGrant is one of the funding options available if you are part of this community. It’s been offered to entrepreneurial women of color since 2017 by The Yva Jourdan Foundation, which is the nonprofit arm of HerSuiteSpot. The grants are for $1,000 each and offered monthly.
How to apply
You can apply for a HerRise MicroGrant online. Your business must be 51% owned by women of color, currently registered in the United States, and have less than $1 million in gross annual revenue. Applications are reviewed monthly.
BGV Pitch Competition
Black Girl Ventures Pitch is a hybrid program that combines developing a fundraising pitch with crowdfunding. It’s run as a contest with $10,000 in cash prizes, and it’s only available to companies that are 51% owned by black or brown women. Participants can also gain access to capital, connections, resources, and other offerings exclusive to the program.
How to apply
To qualify for BGV Pitch, your business must be majority-owned by women of color, in at least its second year of operation, and generating revenue. Apply online at Black Girl Ventures.
Restaurant Business Development Grant Program
Sponsored by Feed the Soul Foundation, the Restaurant Business Development Grant Program provides resources, training services, and a $10,000 grant for culinary development. To qualify, your business must be in operation for 24 consecutive months and 51% owned by a person or persons who identify as marginalized.
How to apply
Applications are open from October 5th to January 31st. If you’ve already missed that window, you can subscribe to their newsletter to receive notice when submissions open up again.
Freed Fellowship Grant
The Freed Fellowship offers monthly small business grants of $500 and an end-of-year grant of $2,500. Fellowship members also get the resources, mentorship, and community they need to be successful. It’s a program designed for “aspiring but overlooked” business owners who want their vision to be seen and heard. All applicants get two months of free mentoring.
How to apply
You can begin the application process by joining the Freed Fellowship. Your company will then be screened for grant eligibility using the 5C Framework, which evaluates context, content, community, chemistry, and commerce. Monthly grants are described as “no strings attached.”
Bridge the Gap Fund
The Bridge the Gap Fund was established to provide financial assistance for black-owned businesses that were impacted by Covid-19. It’s also available to black-owned businesses that were the victims of looting or vandalism. To be eligible, your business must have an opening date before January 1, 2020, and be able to provide documentation of a financial loss.
How to apply
Fund administrators for Bridge the Gap accept 90 applications per cycle. Of those applications, 15 are selected. You can apply online through their website.
NASE Growth Grants Program
The National Association for the Self-Employed (NASE) offers business grants of up to $4,000 to qualified members of their association. To qualify, your business must have a documented need for the funds, be able to prove that the grant will satisfy that need, and be able to outline the impact the grant will have on overall business growth and success.
How to apply
Only members of the NASE qualify for the Growth Grants Program. You can join online to receive additional details on how to apply and what makes you eligible.
Hello Alice Grants
Hello Alice is a woman and minority-owned company that has built a grant-referral platform for other companies with similar ownership structures. Their mission is to remove funding barriers that women and minorities often face in the small business world. Their grants include the Invest in Progress Grants and the American Dream Award.
How to apply
The best way to gain access to Hello Alice Grants is to subscribe to their service. You can do this by entering your name and email or linking via Google or Facebook.
Merchant Maverick Opportunity Grants Program
The Merchant Maverick Opportunity Grants Program focuses on fund acquisition for minority-owned and marginalized small businesses, including small businesses with Native American ownership teams. Merchant Maverick also services the nonprofit industry with a focus on mental health and wellness businesses that face funding barriers.
How to apply
You can start the process with Merchant Maverick by subscribing to their newsletter. You can also visit their website for information on currently available grants.
Coalition to Back Black Businesses
Since its inception, the Coalition to Back Black Businesses has given out over 1,400 grants of up to $25,000. They also offer mentoring and additional resources to help businesses manage those funds properly to grow and scale. Last year alone, they gave out 14 small business grants.
How to apply
The application process is closed as the coalition awards the 14 finalists in the 2022–2023 cohort. You can see those grantees on the Coalition’s website and check back later for future grant opportunities.
FedEx Small Business Grant Content
FedEx awarded 10 grants of $30,000 to small businesses last year. These grants are available to existing FedEx customers who’ve had a valid shipping account for at least six months. They are not available for nonprofits. In 2024, the grand prize winner will receive $50,000—nine other recipients will receive $20,000 each.
How to apply
Online applications for FedEx Small Business Grants will be accepted starting on March 1, 2024. The deadline for submissions is April 1st, and winners will be announced on May 16th.
Fast Break for Small Business
The Accion Opportunity Fund recently formed a partnership with LegalZoom, the NBA, WNBA, and NBA G League to support black-owned small businesses. AOF is spearheading the effort, while LegalZoom provides free services to grant recipients. The NBA and its partners have made a $6 million commitment to the cause. The program is called Fast Break for Small Business.
How to apply
Visit AOFund.org to submit a new application before September 13, 2024. There are $3 million in grants available.
Entrepreneurial Spirit Fund
SIA Scotch Whiskey has been one of the grant partners at Hello Alice since 2021, when they awarded $250,000 in $10,000 grants to 25 small businesses. In 2024, they’ve committed an additional $110,000 to support entrepreneurs of color in the food and beverage industry. To be eligible, 51% of your company must be owned by people of color.
How to apply
Applications can be submitted online at the Hello Alice website, but you must be a member there to qualify. Join to check for the availability of this grant in 2024.
Invest in Progress Grant Program
The Invest in Progress Grant Program is sponsored by the BOSS Network and Sage Technology. It’s a $1.5 million grant fund set aside for black women entrepreneurs. To qualify, your company must have a black woman founder, have a demonstrated need for funds, and be based in the United States. Applications are being accepted now.
How to apply
The application window for the Invest in Progress grant is open until February 23, 2024. Applications can be submitted online at the Boss Impact Fund website.
First Nations Development Institute Grants
The national grantmaking program at First Nations was founded in 1980. Since then, they’ve given out 3,052 grants totaling $64.7 million to businesses and projects owned and managed by Native Americans. They’re currently taking applications for the Native American Immersion Initiative offering 10 grants between $45,000 and $75,000.
How to apply
Applications for the current First Nations Grant, which is a Native Language Immersion grant for nonprofits, are being accepted online until March 4, 2024.
Farm Aid
Going back to 1985, over 300 organizations have benefitted from the efforts of the folks at Farm Aid. The nonprofit, which is focused on preserving America’s farmlands, has given $27 million in grants to small businesses that cultivate the land and feed America. Last year alone, they gave out total grants amounting to over $1.3 million.
How to apply
The home page at the Farm Aid website provides a link to their Farmers Resource Network, where you can fill out an online request for assistance.
Federal small business grant opportunities
The United States government has several grant opportunities available for minority and women-owned small businesses. You just need to know where to look for them. If your business needs funding, the links below are a good place to start.
Grants.gov
Organizations and business entities working on government-funded programs and projects may be eligible for additional funding from grants available at Grants.gov. There is information on how to acquire this funding in their portal, but you’ll need to meet specific criteria to qualify. Each grant is different, so be prepared to do some additional research before applying.
How to apply
Start the process at Grants.gov by going to their Learning Center and reading up on the site’s grant policies. You can then search for grants that fit your needs and register for what you want to apply for. There may be several grants that are a fit for your business.
USDA Rural Business Development Grant Program
The United States Department of Agriculture (USDA) offers several grants designed to improve infrastructure and build strong businesses in rural communities. Details, qualifying criteria, and application instructions for each of them are available on their website. Minority or female ownership is not specifically required to qualify for USDA grants.
How to apply
Applications must be received by 4:30pm on February 28, 2024 to qualify. Submit them to your state’s Rural Development Office of the USDA.
SBIR and STTR Programs
Companies that engage in the research and development of technology can partner with the government and qualify for a Small Business Innovation Research (SBIR) grant or a Small Business Technology Transfer (STTR) grant. The shared mission of these two programs is to support scientific excellence and technological innovation.
How to apply
The eligibility requirements, approval criteria, and application instructions are available at SBIR.gov. Register and log in to submit your business for consideration.
More small business financing options
It’s nice to know that so many organizations are working to break down the funding barriers that minority business owners face. Despite that, grants can be difficult to get because of all the competition for them. Here are some more traditional funding options for your small business.
Business line of credit
Setting up a business line of credit is a sensible way to ensure you have additional funding when you need it. Approval for a line of credit means that you can take the money, but you’re not required to. Business lines of credit are very much an “as-needed” source of funding for small business owners. You take out what you need when you need it and pay it back over time.
Business term loan
A business term loan is a set amount that your business borrows with a repayment term preset when the loan is finalized. For example, you could borrow $10,000 with a repayment term of three years. Your business would be responsible for making a fixed monthly payment during those three years until the full amount of the loan plus interest is paid back.
Business credit card
Acquiring a business credit card and using it responsibly can make expense management much simpler. Credit cards are a good way to spread your costs out when cash flow slows down. They offer more rewards than using a business debit card, often making credit cards a better option for business expenses and even bill payments.
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