This article was updated on February 15, 2022February is Black History Month, an opportunity to celebrate diversity and the fight for equality. But supporting black and minority-owned businesses is something your can business can do year-round. When supporting a minority-owned business, you are able to personally help with the creation of jobs and increase wealth through diverse community groups within our society.
Minority-owned businesses play a vital role in neighborhoods around the country. Yet according to research firm McKinsey, minority-owned businesses are more likely to close in the face of business disruptions (including COVID-19). The Washington Post reported more than 40% of African American business owners had to shut down during COVID-19. This is nearly double the average across all business owners (22%). The report also showed that 32% of Hispanic business owners had to shut down, and 25% of Asian business owners followed suit.
Resources for minority-owned businesses
Luckily, a host of federal programs, nonprofits, and professional networks are stepping up their efforts to support minority-owned businesses with financing, advocacy, and consulting services. If you are a small business owner or entrepreneur within a minority group, you may qualify for financial assistance.
The Small Business Association (SBA) defines minority-owned businesses as small businesses owned by socially and economically disadvantaged people or entities (51% ownership or more). The number of minority-owned businesses has been increasing over the years, reaching 8 million in 2012 - representing about 29% of all businesses.
In times of hardship, it's incredibly important to provide resources to support these businesses through financial assistance.
In this short guide, we'll review 10 of the best resources to help minority entrepreneurs and their businesses thrive.
Federal Grants and Agencies
Several federal agencies have programs in place to help connect minority businesses with funding and opportunity. As long as your business is 51% controlled by U.S. citizens, you can take advantage of their resources, ranging from grants and loans to mentorship and beyond.
1. Minority Business Development Agency (MBDA)
The MDBA is the only federal agency specifically tasked with promoting and growing minority businesses. In 2018, the agency helped facilitate $3.5 billion in contracts for minority business owners, leading to the creation of 19,000 jobs.
Current initiatives include:
- Research on minority businesses' economic impact, and best strategies for growth
- A nationwide network of business centers equipped to support minority businesses
- Grant and loan opportunities
Federal MDBA grants and loans are designed to award innovative businesses the support they need to grow. You can apply for grants directly on the MDBA website.
What's more, local MDBA centers can help your business with the following:
- Securing capital through bonding, private equity, and commercial loans
- Connecting with opportunities including contracts and new certifications
- Improving your infrastructure, policies, and strategy through consulting services
Take advantage of these opportunities and begin to grow your business.
2. U.S. Small Business Administration 8(a) Business Development Program
The government sets aside $25 billion each year for contracts with small and disadvantaged businesses. The SBA's 8(a) Business Development Program helps small, minority-owned business owners learn to compete for these and other government contracts.
In addition, the 8(a) program provides opportunities to:
- Consult with a business opportunity specialist to navigate the federal contracting landscape.
- Participate in the SBA mentor-protégé program and form joint ventures with established businesses. This may also include financing opportunities.
- Receive support in executive development, infrastructure, marketing, and more.
To qualify for support, a business owner must be both economically and socially disadvantaged, meeting certain criteria in terms of net worth and income. Check the program page to see if you qualify.
3. Disadvantaged Business Enterprise (DBE) Program
Housed in the Department of Transportation, the DBE program helps connect small, minority-owned businesses with DOT contracts including transportation projects helmed by state and local governments, airports, and public transportation agencies.
This program can guide small businesses through the DBE certification process. Once your business is certified, the program provides the following supportive services:
- Training and technical assistance
- Aid in creating estimates
- Support in fine-tuning business management practices
- Help to obtain financing and bonding
DBE status is not just for construction and shipping companies. For example, DBE status could help your small retail store or restaurant open an airport or rest-stop franchise.
In addition to federal programs, 501(c)(3) nonprofit organizations provide funding, opportunities, and training for minority business owners. Here are just a few of the many nonprofits that support businesses like yours.
4. The National Minority Business Council
The NMBC supports small, minority and women-owned businesses in the tri-state area, and in the rest of the U.S. and Puerto Rico. It provides the following services:
- Educational opportunities and seminars, including an executive management program and Entrepreneurial Bootcamp
- Support for businesses seeking international trade partners, through the International Trade Program (ITP) program
- Resources and support for businesses interested in becoming environmentally conscious (and receiving tax benefits and grants for green initiatives)
In 2014, the NMBC retained the Institute for Thought Diversity to study its impact through partnerships with over 11,000 minority-owned businesses. The ITD found that NMBC efforts led to $400 billion in economic output and the creation of over 2 million jobs.
5. Metropolitan Economic Development Association (MEDA)
MEDA provides financing, training, and opportunities for minority business owners. Based in Minneapolis, this nonprofit has served over 20,000 minority businesses since 1970. In 2018, they helped 974 businesses secure over $4 Billion in contracts (cumulatively).
Current initiatives include:
- A 7 month "Mini-MBA" program designed to support minority entrepreneurs
- Business consulting services including financial planning and analysis
- The MEDA million dollar challenge competition for start-up funding
6. First Nations Development Institute
The FNDI provides grants, training, and advocacy for small businesses and nonprofits owned by First Nations entrepreneurs. Their mission is to support Native communities and people through several initiatives, including grant funding for businesses.
Since its founding in 1980, First Nations has distributed over $37 million in grants.
Professional Networks and Membership-Based Organizations
Beyond nonprofits, professional networks are a powerful way to connect with peers and potential mentors in your industry. In addition to networking opportunities, many also provide training and financial opportunities.
7. The Asian Business Association
The ABA is a national network with branches throughout the U.S. Its services include:
- Education - Seminars and workshops on topics from green entrepreneurship to COVID-19 coping strategies to connect entrepreneurs with vital tools as well as networking opportunities.
- Advocacy - The ABA works with community-based organizations, corporations, and public agencies to advocate for Asian and minority entrepreneurs' business opportunities.
- Community - Joining this association connects members with other Asian entrepreneurs who might provide mentorship and support, or serve as future partners.
8. The National Hispanic Business Group
Founded in 1985, the NHBG's mission is to support Hispanic business owners and the communities they serve. It boasts the following efforts:
- Meetings and education - Seminars and events connect members with cutting-edge business trends, as well as networking opportunities. They provide testimonials about the concrete results of member networking
- Relationships with national corporations - NHBG leadership meets with leading corporate executives to help them increase the diversity of their companies and subcontractors
To accomplish its mission, the NHBG also funds scholarships.
9. U.S. Black Chambers
The U.S. Black Chambers comprises over 100 local chambers that support black business owners. They provide the following services for their members:
- Financing - Partnerships with J.P. Morgan and Wells Fargo help the chambers connect members with capital
- Contracting opportunities - A black business directory and regular networking events help members form beneficial, long-term partnerships
- Advocacy - The U.S. Black Chambers fights for legislation to support minority and black-owned businesses
- Training for entrepreneurs - In light of COVID-19, the organizations began providing ample information on how the CARES Act, PPP loans, and other related funding opportunities apply to black business owners
With over 10 years in service, the U.S. Black Chambers received the "Advocate of the Year" award from the Minority Business Development Agency in 2016.
10. National Minority Supplier Development Council
The NMSDC helps its member organizations find opportunities to enter corporate and public-sector supply chains. They have matched over 12,000 minority businesses to their corporate members, facilitating partnerships that diversify supply chains and promote small businesses's growth.
Once your business is MBE certified through the NMSDC, you'll have access to:
- Education and training
- Networking events
- Contracting opportunities
These resources can help take your business to the next level.
Considering Other Resources
Unfortunately, due to high application rates, many grant programs close shortly after opening their submission form. Be sure to consistently keep up-to-date on the latest grant opportunities, and be on the lookout for other avenues of cash flow.
For example, the National Black MBA Association has teamed up with FedEx for a few years running to offer a pitch challenge. If you have a scalable startup idea, be sure to submit an application. Submissions close August 1, 2020, and the first-place prize is $50,000.
Beyond the 10 resources we've shared, there are a large number of state, city, and even neighborhood-level resources that can help your business grow. While federal grant dollars and contracts might expand your business, so can partnerships with other local businesses.
To cover all your bases, research local opportunities, too. One of the best places to do this is on Nextdoor. It's easy to get started with Nextdoor's tools for businesses:
- Create your free Business Page
- Customize its appearance and tell your unique story
- Run promotions directly in nearby neighborhoods with Local Deals
- Engage with free Business Posts to connect with customers and business owners alike
Best of all, Nextdoor doesn't require you to build a following like social media platforms do. As soon as you have one review, your Business Page will show up in local search results. The more you engage, the more you'll find opportunities to grow alongside the other businesses that help your neighborhood thrive.
Seek Support to Help Your Community Thrive
As a minority business owner, you may have faced more barriers to securing startup funding and credit than other entrepreneurs. If you find yourself struggling thanks to the economic upheaval of COVID-19, seek out resources to help create business resilience.
Now more than ever, diverse local businesses are vital to the strength of your community and the country alike.
With federal grants, nonprofit support, professional networks, and of course, the customers who support your business every day, there are plenty of resources available. Take advantage of them so that your business can weather and grow through this crisis and the next one, too.
McKinsey Consulting. COVID's effect on minority owned businesses. https://www.mckinsey.com/industries/social-sector/our-insights/covid-19s-effect-on-minority-owned-small-businesses-in-the-united-states
Minority Business Development Association. https://www.mbda.gov/
Minority Business Development Association. Minority Business Development Agency Celebrates 50 Years. https://www.mbda.gov/news/press-releases/2019/02/minority-business-development-agency-celebrates-50-years
GovCon Giants. All About the 8a Business Development Program. https://govcongiants.com/all-about-the-8a-business-development-program/
SBA. 8(a) Business Development program. https://www.sba.gov/federal-contracting/contracting-assistance-programs/8a-business-development-program#section-header-0
The National Minority Business Council, Inc. http://www.nmbc.org/
MEDA. Announcing the 2019 Meda Million Dollar Challenge Finalists! http://meda.net/million-dollar-challenge/
National Hispanic Business Group. https://www.nhbg.org/