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Extra Money For Minority-Owned Businesses

Updated: Jul 15, 2020

By Stephanie Raimbert


Over the past few weeks, the world has been watching the protests against police brutality and racism, calling for conversations on race and equality. One conversation that needs to be addressed in particular during this difficult time is the difference between minority and non-minority businesses. Experts say the pandemic has intensified existing economic disparities and raised fresh concerns about the survival of minority businesses. “Structural racism has created an environment where minority businesses are starved for capital,” said Marc Morial, president and CEO of the National Urban League, a civil rights and urban advocacy organization.

“No group was immune to negative impacts of social distancing policy mandates and demand shifts,” writes Robert Fairlie, an economist at the University of California, Santa Cruz. But, the damage wasn’t spread evenly. About 441,000 black business owners or 41%, disappeared from the data. For Latino businesses, the figures were 658,000, or 32%; for immigrants, 1.1 million or 36%; and for women, 1.3 million or 25%. According to the US Senate Committee on Small Business and Entrepreneurship, “over the last 10 years, minority business enterprises accounted for more than 50 percent of the two million new businesses started in the United States and created 4.7 million jobs [and] [s]till, there are now four million minority-owned companies in the United States, with annual sales totaling close to $700 billion.”

The economic damage, “if prolonged, may be problematic for broader racial inequality because of the importance of minority businesses for local job creation,” Mr. Fairlie concludes. “The next important question is whether the shutdowns of small businesses are temporary or longer term.”

Since bills keep piling up even when revenue isn’t coming in, many of these small businesses face an uphill climb. If they’re now getting back to work, and if they think they’ve taken the necessary precautions to do so safely, then the last thing they need is a politician ordering them to close shop even longer.

Impact of COVID-19 on Minority Businesses

The COVID-19 pandemic has worsened the many challenges of minority-owned small businesses. Despite being more optimistic about the recovery of the economy as a whole, minority-owned small businesses appear to be more concerned about the impact the pandemic will have on their own businesses. According to McKinsey’s US Small Business Pulse Survey, 58 percent of minority-owned small businesses are “extremely” or “very concerned” about the financial viability of their business. For Native American–owned firms, the figure is 68 percent, compared to 47 percent for all US-based respondents. Furthermore, minority-owned small businesses in the United States are also more 55 percent more likely to conduct layoffs or furloughs or to have shut down their business than 48 percent for all general respondents.

Resources are available for all small businesses, but up-to-date data on those owned by minorities remain scarce. Such data would help private, public, and social-sector actors better understand and address the challenges faced by minority entrepreneurs and their businesses. Doing so will not only improve the overall resilience and long-term projections of the U.S. economy; it will also help create a more equitable society.

Many government agencies, banks, corporations and associations offer grants and loans designed to provide aid to minority-owned small businesses. While some of the best funding opportunities specifically target minority-owned businesses, there are other options for funding that have broader eligibility and should still be explored.

Here are the top nine grants and top three loan programs that offer good funding options for minority-owned businesses.

Top 9 Grants

Federal grants

When it comes to searching for funding, the first choice for minority business owners is to seek out grants. There are federal grants available in the areas of research in the fields of medicine, scientific research, education, and technology development. Here are a few such grants.

Small Business Innovation Research (SBIR)/Small Business Technology Transfer (STTR)

These two government programs provide business funding opportunities for small businesses engaged in cutting edge research and development. Eleven government agencies including NASA, DOD, DOE, DHHS, and the National Science Foundation—reserve a portion of their research and development funds to contribute to this highly competitive grant program to foster technological innovation.

The grant qualification requirements and amounts awarded are largely specific to the program and individual grant you’re applying for. See a full list of program descriptions and research topics allowed on their site.

The USDA Rural Business Enterprise Grant (RBEG) Program

The purpose of this grant is to finance the development of small and emerging businesses in rural areas. To qualify, you’ll need to have 50 or fewer employees, less than $1 million in revenue and be located in an eligible rural area. Grants typically range from $10,000 to $500,000, and can be used for a variety of purposes, including training and technical assistance, acquisition or development of land and long-term business planning. For more information about this grant, click here.

This is a central portal for grants originating with various agencies of the federal government. Nearly 2,000 grants from governmental agencies, ranging from agriculture and energy departments to NASA and the National Institutes of Health, can be found here. Most are restricted to government and nonprofit applicants. More than 1,000 grants available to small businesses can be identified using the search tool. However, finding those that target minority-owned applicants requires manually searching the eligibility fields of individual listings.

Tribal Energy Development Capacity Grant Program

This initiative, which is one of two grant programs for minority-owned businesses, are run by the Interior Department’s Bureau of Indian Affairs. It aims to develop tribal managerial, organizational and technical capacity needed to maximize the economic impact of energy resource development on Indian land. The grant gives tribes the ability to develop or enhance their business and regulatory environment for energy resource development.

Empowered Communities for a Healthier Nation Initiative

This grant is aimed at small businesses involved in healthcare and other health-related services. Specifically, the Empowered Communities for a Healthier Nation Initiative deals with health care for minority groups.

Business/Non-profit grants

Finli Grant

The Finli Grant will support Black-owned businesses in education and enrichment that have long been an integral part of our community. These small businesses teach our children, energize our seniors, illuminate our world through education, art, dance, language and enable all of us to be better. At least 20 businesses will benefit from this grant. Finli is awarding a $500 grant toward your business.

The National Association for the Self Employed (NASE) Growth Grant Program

This grant allows business owners to apply for financing for a particular business need. Each grant is worth up to $4,000. To apply, click here, create an account, become a member, and click on the link “apply today”. Grants are awarded on a quarterly basis.

Caleb Brown Urban Entrepreneur's Community Grant

The Caleb Brown Venture Capital and Consulting Project hosts a $1,000 grant aimed to promote and nurture young urban entrepreneurs with visions to rebuild local blocks and communities. It also provides them with training to empower future generations. The grant is open to young business owners in urban areas. This contest is run every month—submit your application by the 15th to enter.

Kuvio Creative

This is a niche grant offered to businesses that are making a difference. This grant opens 3 times a year. However, it is only available to non-profits, minority businesses, veterans, and women-owned businesses. In addition, the reward is not financial but consists of 100 hours of free services offered by Kuvio Creative – mainly for marketing and web design.

Top 3 Loans

For South Americans: Camino Financial – This company was launched specifically to help Hispanic entrepreneurs (“Hispanics” are typically South or Central American natives or people from Spanish speaking countries). To get a loan with Camino Financial, applicants must have a credit score of 550 and have been in business for at least 9 months with annual sales of at least $30,000. These requirements are very low, even compared to online lenders. Funding can be supplied in less than two business days.

For Native Americans: Native American Bank (NAB) provides a range of business loans but focuses primarily on tribally-owned enterprises (which includes Native Americans, Alaskan natives, and Hawaii natives). They specialize in providing loans to these groups and are familiar with many of the complexities of tribal law. NAB works with federal agencies, such as the Small Business Administration, the Bureau of Indian Affairs, the Department of Transportation, the US Department of Agriculture, and the US Housing and Urban Development Department.

For Immigrants, refugees, women, and other minority entrepreneurs: Business Center for New Americans (BCNA) gives business loans of $500 to $50,000 to minority business owners in the United States. The BCNA specifically works with immigrants, refugees, women, and other minority entrepreneurs. These are short-term loans that must be paid back between six months and three years. They offer low, fixed-interest rates. Because of the looser qualification requirements, this program is also a great loan for minorities.

Non-Grant Programs Available to Minority Businesses

There are many resources, including business membership alliances, networking groups and specific industry organizations that provide specific assistance for minority business owners. A variety of non-grant programs that aim to help minority businesses are also available. For example, the National Minority Supplier Development Council provides advisory services and networking opportunities. Also, there are grants available to small businesses whether they are minority owned or not. The National Association for the Self-Employed offers educational materials and discounts on legal help and various kinds of insurance. The SBA 8(a) Business Development Program allows socially or economically disadvantaged small business owners to be eligible to receive help through this SBA 8(a) program, which provides business development assistance, training, and management and technical guidance. To qualify, a small business must be at least 51% owned and controlled by a citizen who has been subjected to cultural bias or prejudice and placed at an economic disadvantage because of race or ethnicity.

The Bottom Line

Funding programs can help minority-owned businesses overcome the barriers that often make it difficult for them to raise capital. A careful search can identify assistance that can help minority-owned businesses survive, grow and prosper.

According to the Minority Business Development Agency, minority-owned businesses constitute 29% of America’s businesses, and the numbers are projected to increase exponentially by 2044. Yet, minority entrepreneurs are denied loans at a rate of almost 3x higher than their non-minority counterparts.

This is why grants and loans are often one of the best ways to compensate for the very common challenge of raising capital that many minority-owned businesses face. Government grant programs are helpful, but it’s the work of private for-profit and nonprofit organizations that are truly instrumental in closing the gap. By increasing entrepreneurship opportunities through financing to minority-owned businesses, the U.S. has the potential to see more jobs created and an increase in annual income introduced into the job market. And in that economic environment, all boats would rise with the tide.


Are you interested in launching or sustaining a pandemic proof small business? Spot issues, take action, stay safe, and thrive in a post Covid-19 world with Legalucy. Learn more at

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