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A good starting point when searching for government grants for a minority business is the Catalog of Federal Domestic Assistance (CFDA). The CFDA is a list of financial and non-financial Federal programs aimed at assisting individuals in identifying the most suitable programs for their specific business needs. The CFDA website (www.cfda.gov) contains the most updated list of programs available, and it lists various government grants for minority businesses offered by different agencies.
Another equally useful avenue of government grants for minority businesses is the Minority Business Development Agency (© 2006 The Minority Business Development Agency) of the U.S. Department of Commerce. The Minority Business Development Agency (MBDA) is a federal agency that promotes the creation and development of minority-owned businesses in the USA. Minorities can approach any of the MBDA’s Minority Business Opportunity Committees in the regions of Atlanta, Chicago, Dallas, New York, and San Francisco for assistance with government grants for minority business. The MBDA website (www.mbda.gov) also has a list of specific minority business grants and loans provided by various state agencies.
If a non-government grant for minority business is preferred, approach the Business Consortium Fund, Inc. (© 2005 BCF Capital Inc.). The Business Consortium Fund (BCF) is a non-profit organization that extends support and grants for minority business owners, certified by the Regional Council affiliated with the National Minority Supplier Development Corporation, Inc. (© 2000 NMSDC, Inc.). The BCF website (www.bcfcapital.com) contains a list of financial lenders in 32 states that extend minority business grants and loans, as well as instructions on getting a minority-owned business certified.
Another avenue of non-government grants for minority businesses is private grant foundations and organizations that offer private grants for minority business owners. These foundations award grants to minority business owners who can assist the respective foundation in reaching its various long-term goals. The Foundation Center (© 1995-2006 Foundation Center) is supported by over 600 foundations, and its website (foundationcenter.org) is useful for quickly locating a suitable foundation offering grants for minority business owners.
Alternatively, if a minority business owner requires a guarantor when applying for minority-owned business grants to develop or expand a current business, the U.S. Small Business Administration (SBA) can be that guarantor. Besides this, the SBA also has a comprehensive online resource (www.sbaonline.sba.gov) for business owners. The extensive information available includes guidelines on planning and structuring the business before approaching organizations for minority business grants and loans and ways for developing the business, as well as methods for increasing business productivity.
Eligibility Factors for Minority Business Grants
Providers of minority business grants and loans also have varying conditions and criteria for who qualifies for minority-owned business grants. Take for example the conditions laid out by BCF. Firstly, the BCF follows the National Minority Supplier Development Corporation (NMSDC) definition of a minority: a U.S. citizen who is at least a quarter Asian-Indian, Asian-Pacific, Black, Hispanic, or Native American. Next, the BCF only considers applications for minority-owned business grants from companies where at least 51% of the business is owned by a minority. BCF further states that public-owned businesses are eligible for minority-owned business grants, only when at least one minority individual owns at least 51% of the company stock and also manages the daily operations of the business.
Besides the BCF, other providers of minority business grants and loans also have their own criteria for who qualifies for these minority business grants and loans. Some even consider women as a minority group eligible. Thus, the safest way of determining the eligibility of a minority for minority-owned business grants is to check the terms and conditions set by the provider of grants for minority business.
Grant Application Process
When applying for most government grants for minority-owned business, a completed Standard Form 424 Application for Federal Assistance is required. This form can be downloaded from the FAQ page on the CFDA website. However, different application forms may be required for different government grants for minority-owned businesses. A full list of applicable forms for various grants can be found at the website (www.grants.gov) of Grants.gov, a government resource for improving government service to the public. For further assistance, the Grants.gov Contact Center can be reached at 1-800-518-4726, Monday to Friday, except Federal holidays, from 7 am to 9 pm (EST).
When applying for minority business loans and grants via the SBA, obtain the relevant application forms from their site at the Services page. Similarly, different private foundations have different forms for application of private grants for minority business owners. Therefore, check with the respective private foundation for the required application forms.
Grant Approval Process
Applications of government grants for minority-owned small businesses are evaluated by the MDBA. Besides verification of personal and academic credentials, other factors taken into consideration include the business owner’s repayment ability, equity contribution to the business, and management capability. In certain cases, a post-award audit may be requested by MDBA.
The approval process for government grants for minority-owned businesses can stretch between four to six months. Upon approval of government grants for minority-owned businesses, the successful applicant will be notified in writing. Unsuccessful applicants will be notified in writing between 10 to 14 days thereafter.
Improving the Chances of Grants Application Approval
When considering applications for minority grants and loans, the image of the minority-owned business is also taken into consideration. A good business plan highlighting the minority business owner’s expert business and industry knowledge, as well as an efficient advisory board of cross-cultural members, will reflect the professionalism of the minority business owner. This then increases the approval of applications for minority business grants and loans.
Tax Breaks for Minority-Owned Businesses
In addition to minority business grants and loans that support and encourage the growth of minority-owned businesses, there are also tax breaks for minority-owned businesses. Every state has different tax breaks for different types of minority-owned businesses. It is therefore advisable to check with the office of the state governor on the tax breaks that your minority-owned business is eligible for.
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