Financial Help Minority Business Owners Need to Know About
Opening a new small business is a complex and time-consuming undertaking and you need every big of help you can get.
Luckily, there is a huge range of support out there and it’s important to check out what’s available for your demographic.The government offers a range of support to small business owners who qualify as socially or economically disadvantaged due to their background.
Get A Minority-Owned Business Certification
Many corporations and government agencies want to do business with minority-owned establishments, and several are required to (such as the Department of Transportation). To take advantage of this, get your business certified! There are four types of certifications you can get, depending on your business.
National Minority Supplier Development Council
Any for-profit enterprise (size doesn’t matter) can apply, as long as over half (51% or more) of the business is owned by a minority. Contact the National Minority Supplier Development Council (NMSDC), who provides the certificates. Contact the council closest to you to apply for certification. They’ll provide an application, and let you know what documents they need to prove your eligibility. The certification does cost $350-1200, depending on our region.
Once you’re certified, you’ll be listed in the Regional Council Minority Supplier Database, as well as the NMSDC’s database. Your company will qualify to participate in management training programs, and you’ll be able to apply for a Business Consortium Fund’s working capital loan program, as well as attend NMSDC business fairs.
SBA 8(a) Business Development Program
This certification is offered by the Small Business Administration, and helps minority-owned companies obtain public sector contracts. Some government agencies need to complete federal contracts with companies that hold this certification, so you’ll be able to obtain more business if your services are applicable. This certification is free.
This certification is not necessarily only for those of minority background; instead, the requirements are that the business be owned and controlled by U.S. citizens who are “socially and economically disadvantaged.” Belonging to a minority group that has historically been subjected to racial of ethnic prejudice will qualify you for this certification. For more details you can check out the SBA website.
Minority Business Enterprise by State
Check if your state has it’s own Minority Business Enterprise program – most do! It’s likely that the local government also has goal of working with a certain number of minority owned businesses. Your company may be eligible for more support via state assistance of educational programs – and could even be eligible for favorable treatment when it comes to securing government contracts.
Department of Transportation’s Disadvantaged Business Enterprise Program
The Department of Transportation requires that at least ten percent of their budget for contractors goes to minority owned businesses. This applies to state transportation agencies as well as federal, so it could well be worth your time getting registered as a DBE establishment. Contact your state or local transportation entity to get the process started. Make sure you have proper documentation of your company, its size, and that you can shot that your business is independent (there’s no parent company). It also important that you own and control it.
Check For Grants or Loans
Though we wish they did, the government doesn’t fund business growth and development. However, don’t be disheartened – there’s money if you’re willing to look for it!
SBIR Grants
Is your business manufacturing or advancing tech? The Small Business Innovation Research Grant or Small Business Technology Transfer Program Funding may apply to you! They reach out and support socially and economically disadvantaged firms that are working to make our world better. Learn more here.
Individual Development Accounts
IDAs are grants that match your deposit toward your own business, and put into a savings account. For each dollar more that you contribute towards it, you’ll get one more. You’ll also need to complete a financial education course, and you must use the money for “asset building purposes,” such as a business. Because IDAs target those with modest financial means, there is an income cap to qualify that varies by state. Browse through the IDA Directory to learn more.
Micro Loans
If you have poor or no credit, and are having trouble getting loans, consider applying for a micro-loan. You can get small credits as low as $500, but also as high as $35000. Get more information at the Association for Enterprise Opportunity.
Keep your eyes peeled for grants for your particular demographic! There are too many to put in one article, but a great place to start is right on Grants.Gov.
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