The Complete Guide to Business Loans, Grants, Rewards, and Resources for Minorities

As of the most recent US Census data report, there were 8.0 million minority-owned firms nationally, and reported receipts from those minority-owned firms totaled $1.4 trillion in 2012. This represented a 34.7 percent growth rate in only 5 years. With 28.8 U.S. firms being minority-owned firms, it’s clear that minorities in this country are contributing in a major way to the growth of the economy.

Shockingly enough, however, government reports indicate that minority and women-owned businesses are still far less likely to get approved for traditional Business loans. While minority-owned businesses are at a clear disadvantage when it comes to acquiring traditional funding, thankfully, there are several other lending options and resources that cater to minorities. This guide will give you a complete list of resources and business loans for minorities to help you secure the funding you need to properly grow your business.

Government and Non-profit Resources

SBA 8(a) Business Development Program

The SBA 8(a) Business Development Program helps small, disadvantaged businesses compete in the marketplace. To qualify for this program, the applicant must show that he or she is a socially or economically disadvantaged business owner.

How to Apply

To apply for the SBA 8(a) Business Development Program, you must determine your eligibility, get copies of all required documents, get a free DUNS number, obtain a TIN number, create a SAM profile, get a SBA General Login System user ID, start a free 8(a) application, and apply.

Applying for the SBA 8(a) Business Development Program is a long process, but you won’t get lost in the process if you follow the instructions outlined on the SBA website.

Small Business Administration Guaranteed 7(a) Loan

SBA Guaranteed 7(a) loans are not reserved solely for minorities, but if you are disadvantaged and have participated in the SBA 8(a) Business Development Program, then it’s much easier to qualify for this loan.

How to Apply

To apply for an SBA Guaranteed 7(a) loan, you must prove you operate for profit, be engaged in business in the United States, have reasonable equity to invest, and use alternative financial resources like personal assets before applying for aid.

When applying for this loan, be prepared with your SBA loan application, financial statements, statement of personal history and finances, ownerships and affiliations, business certificates and licenses, loan application history, income tax returns, resumes, business overview, business leases, and more. Again, the process for applying is quite involved, so make sure to check out the SBA 7(a) application checklist to help keep you on track.

SBA Community Advantage Loans

The SBA Community Advantage Loans program helps underserved markets meet credit, management, and technical assistance needs. This program encourages local, mission-based lenders to offer loans of up to $250,000 by securing 85% of the loan.

How To Apply

To qualify for this type of loan, you will have to have good credit, but you don’t have to have a lot of collateral to secure the loan. The best way to apply is to visit your local SBA district office listed here.

SBA Microloan Program

The SBA Microloan Program is a great option for minority-owned businesses that are looking for smaller loans—loans up to $50,000. These types of loans are used to help smaller businesses get up and running and average about $13,000.

How to Apply

SBA micro loans are offered through intermediaries, so the best way to apply is to contact your local SBA district office.

Small Business Development Centers

Small Business Development Centers (SBDCs) offer assistance to entrepreneurs and small businesses throughout the US. These centers offer free and low-cost training pertaining to finances, business plan development, disaster recovery, lending assistance, and much more.

How to Apply

The best way to get help from the SBDCs is to visit the website and get in touch with your local office.

The U.S. Department of Commerce’s Minority Business Development Agency

The Minority Business Development Agency (MBDA) has several resources to help minorities start and grow their businesses including capital, contract opportunities, and access to new markets. These agencies are located in areas where there are higher concentrations of minorities.

How To Apply

Since there are several programs and resources available through the MBDA, the best way to apply is to first locate your local business center. You can do this on the MBDA website by entering your zip code. Once you know where the closest business center is, call them or visit them to see what resources are available to you.

National Minority Supplier Development Council (NMSDC)

The NMSDC works to connect minority business owners to corporate members. They do this by certifying minority business owners as MBEs and facilitating MBEs into the public-sector and corporate supply chains. Additionally, the NMSDC provides education, programs, and help with developing lucrative partnerships.

How To Apply

The best way to get involved with NMSDC programs is to visit their website, pick the program that best suits you, and be in contact with NMSDC directly. You can learn more about their programs on their website.

These are the major government and non-profit resources. However, there are several other government, community, and non-profit resources available. Some notable programs to check out include:

• Accion
• Minerals and Mining on Indian Lands
• Department of Agriculture Grants
• Block Grants
• Rural Business Development Grants
• Tribal Development Capacity Grant Program
• National African American Small Business Loan Fund
• Affiliated Tribes of Northwest Indians Revolving Loan Fund
• Business & Industry Guaranteed Loan Fund
• Latino Economic Development Center
• Business Center for New Americans
• Community Programs to Improve Minority Health Grant Program
• Community Connect Grants
• First Nations Development Institute Grant
• Dare To Dream Grants
• Entrepreneurial Assistance Program
• Minority and Women Revolving Loan Trust Fund Program
• Minority Chamber of Commerce
• National Association for the Self-Employed Growth Grants
• The National Minority Business Council
• Open Meadows Foundation
• Operation Hope
• Rollovers for Business Startups (ROBS)
• SCORE
• Small Business Innovation Research Programs
• Small Business Technology Transfer
• DOT Disadvantaged Business Enterprise Program

Remember also to check with your local government centers. Many local governments provide robust resources for its community members.

Corporate Small Business Rewards for Minorities

Not only does the government provide help for minority-owned businesses, but there are a few outstanding corporations that have historically offered grants and funding to minority-owned businesses, even though the contests and grants are not specific to minorities. Below are some favorites.

FedEx Small Business Grant Program

The FedEx Small Business Grant Program is a contest that awards exceptional small business owners a little extra help.

How To Apply

To apply for this grant, visit the FedEx Small Business Grant Application website. The winners for 2017 have already been selected, but you can start putting your application ideas together for next year.

Miller Lite Tap The Future Contest

The Miller Lite Tap The Future Contest awards entrepreneurs with excellent ideas with business funding of up to $100,000.

How To Apply

To apply for this contest, visit the Miller Lite Tap the Future Contest website. They will ask for a business plan and host a semifinal and final event.

Huggies Mom Inspired Grant Program

The Huggies Mom Inspired Grant Program awards grants and other resources to moms who are also small business owners.

How To Apply

The application and award process takes about 6 weeks total. For more information on how to get the ball rolling, visit this website.

Banks & Alternative Lenders

While it’s important to research government, non-profit, and corporate resources, grants to see what is available to you, it’s also important to research bank programs and alternative lending options for minorities.

Why? Because often times, government loans and grants have lengthy application processes and it takes a long time to secure funding. For those times when you need capital fast, even if you have bad credit, there are bank loans and alternative lending programs for minorities. Here are some places to check out.

Shield Funding

Shield Funding happily offers business loans to minorities, regardless of credit score or history. In fact, small business owners with bad credit are encouraged to apply for a small business loan. All you have to do is prove your business has been operating for at least 4 months and submit your recent revenue information, and you’re on your way to receiving your funding.

How To Apply

You can apply online in under 5 minutes by filling out your small business loan application here.

Union Bank

Union Bank is one of the better traditional banks to check out, because they offer minority business loans under their Diversity Lending program.

How to Apply

To qualify, you must meet requirements for the ethnicity and race categories, own and manage at least 51% of the business, and meet a few other financial requirements. There is more information about how to apply listed on the website.

JPMorgan Chase & Company

VEDC and JPMorgan Chase is another bank that offers a specific expand loan program for African American-Owned business. However, this loan is currently only for business owners in Los Angeles.

How To Apply

The best way to apply for this loan is to get in direct contact with VEDC.

Wrap-up

If you are a minority business owner that is looking for funding, don’t get discouraged if at first you don’t find what you are looking for at a traditional bank. Instead, comb through the comprehensive list above of government, non-profit, corporate, bank, and alternative lending programs that will help you get the funding you need to grow your business.

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