For minority entrepreneurs looking to start a business or otherwise get help for a business they already run, there are a number of options for financial help.
Indeed, there are many loans and grants available and allocated for minority-owned businesses – from the government, to banks, to nonprofits, and more. But where to get started? To help, here are some of the best options:
Minority Business Development Agency:
The Minority Business Development Agency (MBDA) is a part of the U.S. Department of Commerce, and it seeks to provide aid to minority-owned businesses to help them grow. The agency provides a variety of financing options for minorities, such as grants, and access to venture capital specifically geared towards minority-owned businesses.
The MBDA also has MBDA Business Centers across the country, which provide financial advice for businesses: How to secure loans, get contracts, and more. Click here to find a MBDA Business Center in your area.
2. Community Development Financial Institutions
The Community Development Financial Institutions (CDFI) Fund awards money to historically underrepresented communities and organizations in order to foster minority entrepreneurship, including ones that are supported by Bank of America.
The biggest contributor to CDFIs in the United States is Bank of America, with more than $1.6 billion in loans and investments to more than 250 CDFIs. “Bank of America supports local economies by partnering with community development financial institutions across the U.S., and Puerto Rico and the District of Columbia .”
3. Small Business Administration
The Small Business Administration (SBA) is a federal government agency and another great resource for minorities to receive funding as it is the biggest loan guarantor in America. (Note: The SBA does not make loans, it guarantees loans made by private institutions. Bank of America is an SBA Preferred Lender) There are many SBA-backed loan options, ranging from $500 to more than $5 million.
While most SBA loans are not intended specifically for minority entrepreneurs, the Community Advantage Loan Program offers loans up to $250,000 for businesses in historically under-served markets. In addition, the SBA also provides specific resources for minority-owned businesses with the 8(a) Business Development Program. This program offers minority-owned businesses opportunities to receive government contracts, as well as offers financial information and workshops to said business owners.
4. Local funding
One of the best resources may actually be in your own backyard. Funding is often available from regionally based organizations, specifically geared towards minority business owners. This includes opportunities provided by your local or state governments, and also local credit unions and banks.
Especially in the wake of COVID-19, many states and local organizations have set aside grants specifically for minority business owners. Do some research on your state and local organizations, because many will be able to provide you with financial help.
While looking for state-based grants and loans largely depends on what’s happening locally, the best place to look for federal grants is through Grants.gov. Grants.gov has thousands of grants that may be beneficial to your business. Grants are provided to businesses who can aid the government in “projects to provide public services and stimulate the economy.”
Accion is a non-profit that offers loans to low-to-moderate-income businesses that don’t usually qualify for traditional lending. As such, it can be a very good option for minority business owners and new entrepreneurs. It has offices in 50 states, offering loans from $200 up to $300,000.
So yes, there are many options out there for the minority-owned small business to get the money it needs. This list is a great starting place to begin your search. Good luck!
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