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10 minority small business grants and how to apply

Image of a woman working on a business grant application

Getting funding is an uphill battle for most small business owners. Even with some funds saved, most beginning entrepreneurs will need another steady source of capital to cover startup costs, business assets, and expenses. 

Established businesses also depend on periodic influxes of capital, whether it's a loan, trade line, or corporate credit card. These financial lifelines help entrepreneurs weather unexpected costs, react to economic shifts, and remain top market contenders. 

But minority small business owners face added obstacles. Entrepreneurs in underrepresented communities are less likely to be approved for loans, and receive a significantly smaller share of venture capital funding. Minority small business grants work to fill the gap in financial opportunity. 

This list features 10 grant programs that serve minority owners, as well as more universal funding opportunities. Grants aren't the only option—compare some small business funding alternatives below.

Who is a minority small business owner?

In the United States, the term "minority" typically refers to racial and ethnic minorities. For example, the Minority Business Development Agency (MBDA) is dedicated to furthering business opportunities for "African Americans, Asian Americans, Hasidic Jews, Hispanic Americans, Native Americans, and Pacific Islanders."

Minority small business grants, however, recognize a range of underrepresented demographics, including gender, race, ethnicity, sexuality, veteran status, disability, religion, and other socioeconomic groups. Grants might be geared toward women in technology, entrepreneurs in rural areas, or transgender business owners. 

We'll use the broader definition to highlight the grant programs that serve economically and socially disadvantaged communities. 

10 minority small business grants and noteworthy programs

Small business grants are highly sought after by new and existing businesses, and offered by a multitude of public and private institutions. They put equipment, talent, and product visibility within reach for founders. 

Eligibility requirements vary widely. In most cases, you must be a registered business in good standing before you can apply. Some grant programs require you to become certified as a minority-owned business. This can be done through professional application services like MWBE Enterprises

1. Grants.gov

Grants.gov is an online portal listing over 1,700 federal grants available to businesses, research institutions, state agencies, community organizations, and more. Here, you can apply to grants from a variety of government agencies, like the Department of Health and Human Services and the Department of Agriculture. Browse this list any time from a desktop or the mobile app. 

Many local governments and business organizations redistribute federal grant awards to minority small business owners. We recommend you apply at the local level when possible because smaller-scale programs will have significantly fewer applicants.

2. Minority Business Development Agency (MBDA) grants

The Minority Business Development Agency (MBDA) is dedicated to creating more financial opportunities for minority- and women-owned business enterprises (MWBEs). 

Similar to federal grants, it's likely you'll receive these funds through an intermediary organization. For example, the MBDA awarded $1.4 million to the National Association of Investment Companies, allowing individual equity firms to deploy capital to MWBEs. 

3. WomensNet Amber Grant

The Amber Grant stands out from other grant programs targeting women entrepreneurs for several reasons. First, the $4,000 award is granted on a month-to-month basis. That means female business owners have 12 opportunities each year to secure capital from a single program. 

What makes the program even more unique is that at the end of the year, recipients have a chance to win an additional $25,000 grant. The recipient of the $25,000 is selected by popular vote.

4. Tory Burch Foundation Fellows Program

The Tory Burch Fellows Program emphasizes the relationship between education, innovation, and success. This program lets women-owned businesses apply for $5,000 in grant money that must be used to further business education and skills. In addition to the capital investment, winners get to pitch their businesses before industry experts and participate in a week of leadership development workshops.

5. StreetShares Foundation Veteran Small Business Award

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Veteran small businesses make up about 9% of all American firms and employ 5.8 million workers, according to the U.S. Small Business Administration (SBA). This grant funding is awarded to low-income veterans and military spouses who want to start or grow an early-stage business or nonprofit. Winners receive between $4,000 and $15,000. 

6. National Black MBA Association Scale-Up Pitch Challenge 

The Scale-Up Pitch Challenge was created to connect black startup founders with early stage investors and venture capitalists. With an emphasis on scalability, this grant program offers more prize money than most on this list. 

The first-place winner receives $50,000, with runners-up receiving $1,000 to $10,000. Applicants must demonstrate in detail how the grant will build upon a sound business plan. Winners come from many different sectors, from medical technology developers to innovators in the service business.

7. Native American Business Development Institute (NABDI) Grant

This grant program allows Native American tribes, bands, nations, or other organized communities to conduct an economic development feasibility study to assess the risk of potential business ventures. 

Individuals seeking government grants can submit the results as due-diligence documentation. The grant amount is based on the applicant's goals and proposals. Native American entrepreneurs in the planning stages can determine how much funding they need, secure better terms, and enter the market more successfully.

8. FedEx Small Business Grant Contest 

This small business grant contest doesn't specifically target minority groups, but it is a popular and accessible funding opportunity. The 2019 competition received over 1.3 million votes and 13,000 candidates from across the United States. 

In the application, founders share their accomplishments and business vision, and detail how the funds will help them thrive. Out of this pool, just 10 small businesses are selected to win. 

The grand prize is $50,000 with an additional $7,500 in FedEx services. Second place receives $30,000 and $5,000 in FedEx services. The other eight winners receive $15,000, plus $1,000 in services. You can watch past video submissions on the FedEx website to prepare. 

9. Rural Business Development Grants

This Department of Agriculture grant program supports the growth of rural businesses on the periphery of cities with populations over 50,000. Applicants must have fewer than 50 employees and less than $1 million in gross revenues to apply for this award. Winners receive awards between $10,000 and $500,000 to put toward technical assistance, leadership training, land acquisition, and more.

10. National Association for the Self-Employed (NASE) Growth Grants

Even the most driven startup founders can struggle with consistent financing. The NASE Growth Grant program awards $4,000 to entrepreneurs who successfully demonstrate their need for a capital investment. 

NASE grant recipients can use the money to purchase equipment, run marketing campaigns, hire part-time workers, and meet other business needs. To qualify, you'll need to become a member of NASE. 

Pros and cons of minority small business grants

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Minority business grants are an excellent resource for new and existing businesses, but they're just one way to get funded. Review these considerations before you apply. 

Pros

  • You don't have to worry about repayments, interest rates, or other fees with this type of working capital. As a business owner, it's the closest thing you can get to "free money."
  • Grants are provided by a diverse array of public and private institutions. You can typically search and apply completely online, so minority entrepreneurs can dial in on the best opportunities.
  • Winning a grant is an achievement. It's an award that conveys your business is strong, sustainable, and focused. You can emphasize it in a future investor pitch and promote the news online.

Cons

  • Most grant opportunities are highly competitive. The sheer volume of applicants adds pressure to stand out from the crowd. 
  • The grant application process is often time-consuming and requires heavy research. You may have to hire a grant writer to increase your chances of winning.
  • Although grants are "free money," there are strings attached. You'll need to meet eligibility requirements before, and potentially after, you receive the funds.
  • Unlike other kinds of working capital, grants have strict application deadlines. If you miss the window, you may have to wait a full year for another chance to apply. When you do apply, it may be months before you hear back or receive funds.

More business financing options for minority owners 

Business loans are often recommended as a replacement for grants, but there are options that don’t require repayment.  The SBA works with the federal government to set aside a certain number of contracts for minority-owned businesses, among other communities. 

This allows entrepreneurs to compete for work and revenue they otherwise wouldn't be able to access. If you aren't able to secure a grant, check your eligibility for the following programs.

  • 8(a) Business Development (BD) Program: Offers assistance to businesses that are at least 51% owned and controlled by socially and economically disadvantaged individuals.
  • Women-Owned Small Business (WOSB) Federal Contracting Program: Sets aside government contracts for WOSBs in industries where they are underrepresented.
  • Historically Underutilized Business Zone (HUBZone) Program: Prioritizes federal contracts for small businesses in economically depressed communities. 

Another option is the SBA's Community Advantage loan program, which deploys capital for "under-served markets." You can review the Financial Assistance Guide to find more small business loans.

Minority grants put success in reach

Entrepreneurs come from every background, and the number of minority-owned businesses is only increasing. Unfortunately, social, economic, and political barriers remain for the millions of minority business owners. 

Minority small business grants seek to level the playing field. If you didn't see a grant program that matches your business needs, your local chambers of commerce and trade associations may be able to point you in the right direction.

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