10 Small Business Grants for Minorities

What is a grant?

A grant is a funding source recipients don’t have to repay. However, grants are usually associated with a lengthy and specific application process. Business owners seeking a grant must ensure they meet eligibility requirements before applying to the grant program. 

Once you submit the application in accordance with the grant program rules, recipients are selected from the many applicants seeking funding.

Filling out a grant application is typically an in-depth process, so many business owners hire a professional grant writer to complete the process properly.

Grant funding can help businesses avoid or reduce their reliance on business loans or other funding sources, such as accepting venture capital. Even the best business loans charge interest and must be repaid. However, while grants often are considered free money, they require a significant investment of time and effort, and the funding is never guaranteed.

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Government grant programs are available for economic development; there are also grant programs created by private and nonprofit organizations.

What is a minority small business grant?

A minority small business grant encompasses a wide range of grants to help minority-owned small businesses grow and succeed. Minority-owned businesses come in many different varieties, and grants are available for many of them. For example, there are numerous business grants for Black women entrepreneurs and Hispanic business owners. Other grants are available for women-owned businesses, businesses owned by Indigenous people, and entrepreneurs with disabilities.

There is no shortage of minority small business grants and assistance programs. However, finding the right one for your business could be a challenge. This list highlights prominent minority small business grants, some of which were established specifically to provide entrepreneurs relief due to the impact of the COVID-19 pandemic. Others are focused on economic development in historically marginalized communities.

Minority business grants

We’ve compiled a list of 10 minority small business grants. The application process for each grant is unique and often takes significant time and effort. Carefully review each grant program’s application guidelines to improve your chances of being selected for funding.

1. Grants.gov

Grants.gov has a running list of more than 1,000 available government grants, including minority business grants. The website compiles grants from more than two dozen government agencies, such as the U.S. Small Business Administration (SBA), the U.S. Department of Agriculture (USDA) and the U.S. Department of Commerce.

To find a grant that’s right for your business, use the Search Grants tool on the website to filter the grant list by keyword or opportunity number. Once you locate the grant you wish to apply for, click the hyperlinked opportunity number. There, you will find additional information about the specific grant, as well as any associated documentation you might need.

To apply for a grant through Grants.gov, you must first register for an account. Then, you can download an application package for the grant you want to obtain. Prepare yourself for a lengthy and specific process. 

2. The Minority Business Development Agency

The Minority Business Development Agency (MBDA), operated by the U.S. Department of Commerce, is dedicated to helping minority-owned businesses access the resources they need to grow and succeed.

Grant competitions change regularly. Visit the MBDA Grants website for information on current opportunities. The MBDA’s grant budget was increased under the American Rescue Plan Act, providing an additional $100 million for technical support of underserved entrepreneurs.

3. The Verizon Small Business Recovery Fund

The Verizon Small Business Recovery Fund, established in response to the COVID-19 pandemic, offers $10,000 to successful applicants. The fund specifically focuses on providing grants to business owners of color, women-owned businesses and other underrepresented entrepreneurs.

Visit the Verizon Small Business Recovery Fund website to apply for a grant.

4. The Native American Business Development Institute (NABDI) Grant

The NABDI Grant, funded by the U.S. Department of the Interior’s Bureau of Indian Affairs, provides funding to business owners of Native American or Alaskan Native descent. The program aims to help fund feasibility studies for Native American or Alaskan Native-owned businesses that create jobs and stimulate economic activity in tribal areas. 

In 2021, the program provided $455,500 to 10 Indigenous tribes to support economic feasibility studies for specific economic development projects or business startups.

Visit the NABDI website to apply for a NABDI grant for your proposed economic development feasibility study.

5. The National Minority Supplier Development Council’s Business Consortium Fund

The National Minority Supplier Development Council (NMSDC) provides a grant program known as the Business Consortium Fund, which aims to support certified minority-owned businesses. To become a certified minority-owned business with the NMSDC, minority business owners must own and control at least 51% of the business. 

Minority business owners include entrepreneurs who are African American, Hispanic American, Native American, Asian-Pacific American or Asian-Indian American.

Through the NMSDC, certified minority-owned businesses can access working capital loans and grant funding through the Business Consortium Fund, an organization of suppliers and vendors associated with the NMSDC. To learn more, visit the NMSDC website.

6. The U.S. SBA 8(a) Business Development Program

The U.S. SBA 8(a) Business Development Program aids economically disadvantaged small business owners, providing business development support and consultation services for management.

To qualify, the business must be 51% owned and controlled by an entrepreneur who is economically and socially disadvantaged with a net worth of $250,000 or less. For a more specific definition of what constitutes “economically and socially disadvantaged,” see Title 13 of the Code of Federal Regulations.

To apply for support through the SBA 8(a) Economic Development program, you must first be certified by the agency. To do so, visit the SBA Certify web page, create a profile, and follow the steps outlined to complete the certification process. You will receive correspondence via mail to confirm whether or not you were approved for certification.

Once you are accepted into the program, your certification will last up to nine years. However, certified businesses must complete annual reviews to remain in good standing with the program.

7. The U.S. SBA Program for Investment in Micro-Entrepreneurs

The Program for Investment in Micro-Entrepreneurs (PRIME) provides various grants to small businesses and offers priority to women-owned businesses and economically and socially disadvantaged business owners. These grant opportunities include the following:

• Technical assistance grant. Offers training and technical assistance to micro-entrepreneurs.
• Capacity-building grant. Extends training and scaling support to micro-entrepreneurs as well as assistance for expanding services.
• Research and development grant. Assists research and development efforts as well as the establishment of best practices for technical development in micro-enterprises.
• Discretionary grant. Determined by the U.S. SBA based on whether an organization is consistent with PRIME’s goals.

According to the SBA, the following types of organizations are eligible for a PRIME grant:

• A micro-enterprise development organization or program with a demonstrated record of delivering micro-enterprise services to disadvantaged micro-entrepreneurs
• An intermediary, such as a private, nonprofit entity serving micro-enterprise development organizations
• A micro-enterprise development organization or program that is accountable to a local community, working with a state or local government or an Indian tribe
• An Indian tribe acting on its own, if the Indian tribe can certify that no private organization or program exists within its jurisdiction

Visit the PRIME website to apply for a grant through the SBA’s PRIME program.

8. State Small Business Credit Initiative (SSBCI) Technical Assistance

The American Rescue Plan reauthorized and allocated $200 million to the SSBCI initiative. This money is sent to and allocated by the states, territories and tribes that choose to participate. 

The grants are for technical assistance, including legal, accounting and financial help, and are available to businesses owned by socially and economically disadvantaged individuals and very small businesses. 

To apply, contact the SSBCI agency in your state, territory or tribe, which you can find on the Council of Development Finance Agencies website. 

9. The USDA Rural Business Enterprise Grant Program

The USDA’s Rural Business Enterprise Grant Program provides grants to public entities to offer training and technical support to small businesses with fewer than 50 new workers and less than $1 million in gross revenue.

Unlike many other grants on this list, the USDA Rural Business Enterprise Grant is awarded to public entities, such as towns, state agencies, nonprofits or universities, which then use the grant to support local small businesses within rural communities. 

These grants can be used for a wide range of purposes, according to the USDA:

• Training and technical assistance, such as project planning, business counseling and training, market research, feasibility studies, professional or technical reports, and producer service improvements
• Acquisition or development of land, easements or rights of way; construction, conversion, renovation of buildings; plants, machinery, equipment, access for streets and roads; parking areas and utilities
• Pollution control and abatement
• The capitalization of revolving loan funds, including funds that will make loans for startups and working capital
• Distance adult learning for job training and advancement
• Rural transportation improvement
• Community economic development
• Technology-based economic development
• Feasibility studies and business plans
• Leadership and entrepreneur training
• Rural business incubators
• Long-term business strategic planning

10. FedEx Small Business Grant Contest

Minority entrepreneurs and small business owners can apply for the annual FedEx Small Business Grant Contest, where 12 businesses can win up to $50,000 each to grow their business. 

• The grand prize is $50,000, plus $7,500 in FedEx printing services.
• The second place prize is $30,000, plus $5,000 in FedEx printing services.
• There are 10 third place prizes of $15,000, plus $1,000 in FedEx printing services.

To apply, visit the FedEx Small Business Grant Contest page and write a short profile about why you started your business, what the company does, what makes your company different, any social causes your business embraces, and how you plan to use your grant money to improve your business. You may also include video content in the form of a one-minute YouTube video about your company and its mission. 

Minority business grants FAQs

These frequently asked questions shed some more light on choosing a minority business grant and applying for a grant for your small business.

Who qualifies for small business grants for minorities? 

Eligibility requirements vary from grant to grant. Carefully review each grant’s requirements before filling out the application.

When applying for federal grants, a common eligibility barometer is whether you or your business qualify as “economically or socially disadvantaged.” Both terms are defined extensively under Title 13 of the Code of Federal Regulations. To review these definitions, visit the Code of Federal Regulations.

Do minority business owners get tax breaks?

U.S. tax law is nondiscriminatory, meaning there are no special tax considerations for minority business owners. However, small business owners can take advantage of a range of tax deductions.

How do you become a certified minority business?

To become certified as a minority-owned business through the NMSDC, you must demonstrate that your company is at least 51% owned, operated and controlled by an entrepreneur whose ethnicity is at least 25% Black, Asian-Pacific, Asian-Indian, Hispanic or Native American.

Certification requirements for women-owned businesses are similar, although certification is handled by the Women’s Business Enterprise National Council instead of the NMSDC.

How do you get a small business grant with bad credit?

Personal and business credit scores generally don’t factor into grant applications since grants do not have to be repaid. In fact, some small business grants are designed specifically for people from low-wealth backgrounds who might have poor credit, significant debt or lack access to the capital needed to start a business.

Grantors consider potential grantees’ applications and eligibility requirements instead of their financial stability, as lenders would. An applicant’s suitability in relation to the grantor organization’s mission is most important.

Finding the right grant for you

There are numerous grants from a wide range of organizations, including government agencies, private businesses, and nonprofits. The first challenge is finding the right grant for you.

Once you’ve identified grant opportunities suitable for your business’s needs, ensure you’re eligible and then diligently complete the application process according to the grantor’s guidelines.

Grants are an excellent way to access funding without a repayment obligation. If you qualify for small business grants, you could potentially launch or grow your business without taking on unnecessary debt.

Jennifer Dublino contributed to the reporting and writing in this article.