Tag: Grants

Government Grants for Women and Other Funding Options for Women Owned Businesses

It’s no secret that female business owners face unique challenges when it comes to finding funding for their businesses.  There are a lot of options available, but it seems that whenever a woman seeks funding advice, they get a generic answer. Usually it is something related to government grants for women.  However, specific government grants for women are not as common as many think.  

There Are a Number Funding Options Available for Women Owned Businesses, Including Government Grants for Women

Still, there are plenty of options.  Some are designed specifically for women business owners, but most are not.  From private grants to government loans, women business owners can fund their businesses and be successful if they know where to start. 

Government Grants for Women and From Other Sources

All grant programs are highly competitive.  Even the few government grants for women. Despite this, they are definitely worth the effort to apply, as there really isn’t a lot to lose except time.  It’s free money that can supplement other funding types. Some examples include: 

SBA Women’s Business Centers

In addition to helping with loans, the SBA Women’s Business Centers also help women entrepreneurs get access to other types of funding. Some lend money or award grants directly, while others help connect women entrepreneurs with financial institutions.  The grants that are awarded through some of these centers could be considered government grants for women, since the SBA is a government entity.

Eileen Fisher Women-Owned Business Grant

The clothing brand Eileen Fisher hands out $100,000 per year to 10 women-owned businesses. To qualify, a woman must have at least 51% ownership, and the business must be in operation for at least three years. Also, it must bring in less than $1 million per year in revenue and have a focus on environmental or social change.  This is a private sector grant.

Find out why so many companies use our proven methods to get business loans. 

Amber Grant 

The Amber Grant awards $500 to $1,000 per month to a woman-owned business. One of the recipients also receives an additional $10,000 grant at the end of the year. Applicants only need to tell their story and turn it in with a $15 application fee.  This one is another private sector grant. 

#GIRLBOSS Foundation Grant 

Specifically for woman-owned businesses in fashion, music, and art, the #GIRLBOSS small business grant awards $15,000.  They also offer exposure via the Girlboss website and social media platforms. Judges rate those applying on creativity, business savvy, planning, innovation in the field, need, and where they plan to work.  Like the last two, this is private grant. 

Cartier Women’s Initiative Award 

The Cartier Women’s Initiative Award is $100,000 for first place and $30,000 for second place.  They award the grant to 18 female business owners from around the world each year.  Women business owners who are just getting started may qualify.  Go here for the complete application information for this small business grant.

All of the finalists get to attend the INSEAD Social Entrepreneurship 6-Day Executive Program (ISEP). They will also have the opportunity to participate in workshops on entrepreneurship, business coaching seminars, and be exposed to networking opportunities.  This is also a private grant. 

The Small Business Administrationgovernment grants for women Credit Suite

The SBA offers government backed loan programs, a number of which are perfect for women business owners, though not designed exclusively for women.

7(a) Loans

This program offers federally funded term loans up to $5 million. The funds can be used for expansion, purchasing equipment, working capital and more. Banks, credit unions, and other specialized institutions in partnership with the SBA process these loans and disburse the funds. 

To qualify a business owner has to have a credit score of at least 680.  There is also a required down payment of at least 10% for the purchase of a business, commercial real estate, or equipment. The minimum time in business is 2 years. If a business is a startup, business experience equal to two years is enough. 

This is by far the most popular of the SBA loan programs.  Funds are available for a broad range of projects, from working capital to refinancing debt, and even buying a new business or real estate. 

504 Loans 

These loans are also available up to $5 million.  They can buy machinery, facilities, or land. Generally, they are used for expansion.  Private sector lenders or nonprofits process and disburse the funds, and they work especially well for commercial real estate purchases. 

Terms for 504 loans range from 10 to 20 years.  Funding can take from 30 to 90 days. The minimum credit score requirement is 680, and collateral is the asset being financed. There is also a down payment requirement of 10%.  However, this can increase to 15% for a new business. 

Furthermore, there is a requirement that you be in business for at least 2 years, or that management has equivalent experience if the business is a startup. 

Microloans 

Microloans are available in amounts up to $50,000. They work for starting a business, purchasing equipment, buying inventory, or for working capital. Community based nonprofits handle microloan programs as intermediaries.  Unlike other SBA programs, financing coming directly from the Small Business Administration. 

Interest rates on these loans are 7.75% to 8% above the lender’s cost to fund, and the terms go up to 6 years. They can take up to 90 days to fund. There is a 640 minimum credit score requirement.  However, the collateral and down payment requirements vary by lender. 

SBA Disaster Loans 

Disaster loans are available in amounts up to $2 million.  They are actually processed directly through the SBA. They are available to small-business owners that have been affected by natural disasters.  Terms go up to 30 years, and the maximum interest rate is 4%. 

Find out why so many companies use our proven methods to get business loans.

The minimum credit score for disaster loans is 660. Collateral is necessary if the loan goes over a certain amount, usually $25,000, if it is available or when it becomes available. For a military economic injury disaster that amount is $50,000. A down payment is not necessary either way.

SBA Express loans 

Express loans top out at $350,000 and have a maximum interest rate of 11.50%. Terms range from 5 to 25 years, and the SBA guarantee is less than with their other loan programs at 50%. To qualify, your credit score must be above 680.  In addition, you must have a debt to service ratio of 1.1 or higher. If the loan is greater than $25,000, collateral may be necessary depending on the lender. 

The turnaround for express loans is much faster.  The SBA takes up to 36 hours to give a decision. Necessary paperwork for application is also less, making express loans a great option for working capital, among other things, if you qualify. 

SBA CAPLine 

There are 4 distinct CAPLine programs that differ mostly in the expenses they can fund. Each of them carries a maximum amount of $5 million and an interest rate that ranges from 7% to 10%. Funding can take 45 to 90 days. 

The four different programs are: 

  • Seasonal CAPLines -Financing for businesses preparing for a seasonal increase in sales.
  • Contract CAPLines -Financing for businesses that need funding to fill a contract.
  • Builder’s CAPLines -Financing for businesses taking on a real estate or construction project.
  • Working capital CAPLines -Financing for businesses that are struggling with a short-term slump in sales.

You must have a credit score of 680 or above to qualify for these. There is no minimum time in business requirement unless you are getting a seasonal CAPline. That one carries a one year in business requirement. 

SBA Community Advantage Loans 

This is a pilot program set to expire or extend in 2020. Its purpose is to promote economic growth in underserved areas and markets. Decision makers can be less stringent when it comes to poor credit or low revenue if the business has the potential to stimulate the economy or create jobs in underserved areas. 

Loan amounts range from $50,000 to $250,000 with a maximum interest rate of 11%, while terms range up to 25 years.

Other Loan Options for Women Business Owners

While programs like those that provide government grants for women and those offered by The Small Business Administration often work to meet the unique challenges faced by women business owners, sometimes it just isn’t enough.  If your credit score does not allow you to qualify for SBA loans, these options are available as well. They tend to work well, though not specifically designed for women. 

Lending Club

LendingClub functions as a peer-to-peer lender that offers mostly fixed-term small business loans. Borrowers that get loans from LendingClub generally use loans funds to buy equipment, finance growth or expansion projects, consolidate other debt, or hire new employees.

One benefit LendingClub offers with their small business loans that many others do not is access to a client advisor. This is someone to help you figure out how to best use your business loan funds, as well as how to budget loan payments.

The minimum loan amount at LendingClub is $5,000 and the maximum is $300,000.  There is a minimum time in business requirement of 12 months to qualify.  In addition, you must have at least $50,000 in annual sales.  There can be no tax liens or bankruptcies, and you must have at least 20% ownership. They will work with a credit score that is fair or higher.  A fair credit score ranges from 620 to 659. 

Lendio

Lendio offers a loan-connection service that dramatically cuts the time it takes for small business owners to find the perfect loan.  They do the legwork by vetting a network of competing small business lenders. Funding is fast, sometimes in as little as 24 hours.  

Potential borrowers submit one application and then see offers from lenders in the network.  The minimum loan amount is $500 while the maximum is $5,000,000.  The business must be U.S. or Canada based and must have a business bank account.  There is a minimum personal credit score requirement of 560.  

Blue Vine

BlueVine offers two options for small business financing.  They include lines of credit and invoice factoring.  They also offer the ability to talk with a financial advisor. Their application process takes place exclusively online.  The minimum loan amount is $5,000 and their maximum is $100,000.  Furthermore, to be eligible you must be in business for at least 6 months, have revenue of $120,000 per year or more, and have a credit score of at least 600.  

Kiva

Kiva has a unique lending model. They offer loans to businesses, but their platform is far different from than that of traditional or even other non-traditional lenders.  It is sort of a cross between crowdfunding and lending.  They offer loans with a 0% interest rate. That means, even though you have to pay it back, it is actually free money. In addition, they do not run a credit check at all. The only requirement is that you have to get at least 5 family members or friends to donate money for your business.  Also, you have to give at least a $25 loan to another business on the platform yourself. 

Grameen

Microloans are a great option when it comes to business loans for women with bad credit.  Grameen is one of the few lenders that offers microloans specifically for women.  The loan amounts range from $2,000 to $15,000, and they also offer financial training and support.  

As a bonus, they report payments to Equifax and Experian.  Consequently, these loans help borrowers build credit. 

Find out why so many companies use our proven methods to get business loans.

Government Grants for Women Do Exist, but So Much More Is Available

It is possible to find government grants for women.  They do exist. However, they are not the only option female entrepreneurs have.  Since they are rarely enough to fully fund a business, it is good to know what else is out there. 

When looking for government grants for women, start with the SBA Women’s Business Centers.   They are going to be your best bet for information of this type. Don’t limit yourself, however.  Try the other grant options mentioned above, and look around for others. New ones pop up every day. Know though, that complete funding will almost always require a loan or investor of some type, so keep that in mind as well. 

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Minority Business Loans and Grants: Their Powers Combined Can Help Your Business Explode

Like peanut butter and jelly, minority business loans and grants make for a powerful combination.  On their own, each can be a phenomenon, but put them together, and you have a match made in small business funding heaven.

Use Minority Business Loans and Grants Together for a Powerful Combination

Minority loans and grants can be great tools when paired with other funding sources. But how do you get them? How do you use them together?  Which ones are best for you? We know how to find the answers to all of these questions and more. 

Find out why so many companies use our proven methods to get business loans. 

Minority Business Loans and Grants: Start with The Small Business Administration

It’s impossible to talk about business loans and not mention the SBA.  While they do not lend funds directly, they do handle the administration of many  loan programs that help all small businesses get the funds they need through partner lenders.   Many of their programs, though not specifically for minorities, work fabulously for minority business owners. 

7(a) Loans 

This is the Small Business Administration’s most known program.  It provides federally funded term loans up to $5 million. The funds can be used for a number of purposes,  including expansion, purchasing equipment, working capital and more. Banks, credit unions, and other specialized institutions in partnership with the SBA process these loans and disburse the funds. 

504 Loans 

504 loans are also available up to $5 million.  They can be used to buy machinery, facilities, or land. Typically, business owners use them to fund expansion.  They work especially well for commercial real estate purchases. 

Microloans 

Microloans are loans for $50,000 or less. They work well for starting a business, purchasing equipment, buying inventory, or general working capital. 

SBA Express Loans 

These are fast turnaround loans, with the SBA taking 36 hours or less to give a decision. There is less paper work as well, which is part of what makes express loans great if you qualify. 

SBA Community Advantage Loans minority business loans and grants Credit Suite

This is a pilot program running through 2020.  It also has the potential for extension. Its purpose is to promote economic growth in underserved areas and markets. Decision makers look past such things as poor credit or low revenue if the business has the potential to create jobs or promote economic growth in underserved areas. 

These are some of their most popular programs. The Small Business Administration does so much more for small businesses in addition to this.  Get more details on the SBA, these loan programs, and additional resources offered by the Small Business Administration here.    

Minority Business Loans and Grants: Private Lenders

Though not specific to minorities, some private lenders offer products that work well when paired with grants to help a business grow and expand.  Here are just a few examples. 

BlueVine

BlueVine has several financing options.  For example, they offer term loans, invoice financing, equipment financing, lines of credit, and merchant cash advances.  As a requirement, you have to be in business for at least 6 months. If you need a term loan or a line of credit, then they require a minimum annual revenue of $100,000.  For invoice factoring, the minimum credit score is just 530! If you want a line of credit or term loan, you will need a minimum credit score of 600. They have an A+ rating with the BBB.  Find out more about BlueVine in this review. 

OnDeck

OnDeck has lines of credit and term loans with fixed interest rates.  You can get up to $500,000 with a term loan. They also have an A rating with the Better Business Bureau.  The minimum FICO they require is 600. In addition, you must have $100,000 minimum annual revenue and be in business for at least one year.  Find out more about OnDeck in our review. 

SmartBiz

SBA loans typically take a lot of time and paperwork. Still, SmartBiz found a way to speed things up.  They make it easier than ever. Unfortunately, they do have stricter requirements. For example, your credit score has to be at least 650.  Also, you have to be in business for 2 years or more. Further, annual revenue has to be $50,000 at least. There can be no outstanding liens, bankruptcies, or foreclosures in the past 3 years either. 

Funding Circle

If you’re looking for a low APR, then Funding Circle is your go-to.  They have fixed rate term loans and require a credit score of 620 or above.  Unlike BlueVine, there is no minimum revenue requirement. However, they do require you to be in business for at least 2 years.  They have an A+ BBB rating. Find out more in our Funding Circle review. 

StreetShares

This company offers invoice financing, term loans, and lines of credit.  Similar to others, there is a minimum number of years in business requirement.  However, the minimum annual revenue requirement is less than others, at only $25,000.  Additionally, the minimum credit score is 600. They also have an A+ rating with the Better Business Bureau.  Find out more about StreetShares in our review, here. 

Minority Business Loans and Grants: Improve Your Chances of Loan Approval

Just being a minority business owner does not guarantee approval regardless of the lender or loan program. There are some things a lender is looking for regardless.  Though some lenders are a little more relaxed than others, at their core, they are all looking for the same general things on some level. 

Fundability

A business that appears fundable to a lender is complete, organized, and either has solid revenue or a solid startup plan. Find out more about fundability, what it is, and what affects it here. 

To appear fundable, a business needs: 

  • To be formally incorporated as an S-corp, LLC, or a corporation.
  • An EIN from the IRS.  This is an identifying number for your business that functions similar to the way your SSN does for you personally.  
  • A dedicated business bank account.
  • Contact information that is different from the owner’s.  A separate telephone number on a toll-free exchange and a dedicated physical address are vital.. 
  • A professional website and an email address that has the same URL.  Free web hosting and email services won’t do the job in this case.  

Find out why so many companies use our proven methods to get business loans. 

A Business Plan is Necessary for Minority Business Loans and Grants

Lenders want to see a professional business plan.  Even if you are not a startup a plan is necessary. Startups need a plan so that lenders can see they know what they are doing.  Established businesses need to show how they plan to use the funds. Lenders want to see that applicants have research to support the plan as well.  Find out more about business plans here. 

Forms and Documentation

It is pretty much not possible to over prepare when applying for a loan.  Because of this, you should try to think ahead to what information lenders may want to see. Pull together forms and documentation they may ask for.  Items such as past tax returns, financials, and licenses are common. The more prepared you are from the beginning, the smoother the process will flow. 

Your Personal Credit Has to Be Strong

A solid personal credit score is important to getting the best small business loans.  You can’t escape it. As you can see above, a score of 600 or higher is necessary almost across the board with the exception of some invoice factoring and non-traditional options. 

Remember, it isn’t impossible to improve your personal credit score.  The first step is to get a copy of your credit report. You can get a free copy each year. Scan it for what may be causing a negative impact.  If there are mistakes, contact the credit agency in writing to have them removed. If late payments are the issue, start paying on time. You cannot fix a problem until you know what the problem is. 

Business Credit Counts Also

When it comes to business loans, you cannot ignore business credit either.  While it usually isn’t listed as a primary requirement, for most lenders having a strong business credit score can only help you.

If a lender sees a personal score that isn’t exactly what they need, they may consider business credit when making their decision.  In addition, if you qualify for the loan and have good business credit, you may be able to get a lower interest rate. 

Find out why so many companies use our proven methods to get business loans. 

Minority Business Loans and Grants: Find Your Loan a Grant Sidekick or Two

No super hero due is complete without a sidekick.  If Robin was the jam to Batman’s peanut butter, then maybe one of these grants, or one not listed, can help round out your business funding as well. 

The nice thing about grants is, they do not have to be repaid.  It’s free money. The drawbacks are that they are highly competitive, and they usually are not enough to fund a business alone.  They work well, but they are not superhero material, typically. Once a sidekick, always a sidekick. 

Some grants are minority specific, and some are not.  They vary in application process and eligibility requirements.  Here are some examples of each to add to your minority business loans and grants repertoire. 

First Nations Development Institute Grants

The mission of this group is to offer grants that help Alaska Natives, Native Hawaiians, and Native Americans. Not only that, but there are a wide range of opportunities from the First Nations Development Institute.  There is a mailing list you can join to receive information about new opportunities as they become available.

National Black MBA Association Scale-Up Pitch Challenge

Also known as NBMBAA, the Scale-Up Pitch Challenge offers cash prizes ranging from $1,000 to $50,000.  The association says its purpose is to help newer businesses that have an African founder that maintains equal ownership.  

A business must be a member of the NBMBAA to compete.  There is a $10 monthly membership fee. After that, there is an online application.   If chosen, you must submit a pitch that lasts three minutes. Then, finalists go on to compete at the NBMBAA annual conference.

Other Grant Options: Non-Minority Specific 

There are grant options that can work well even though they are not exclusively for minorities. They are available to everyone, including minorities.  Some examples include the following.

FedEx Small Business Grant

This grant is how FedEx is working to strengthen small business innovation.  There are 10 grants the company awards each year. They range from $15,000 to $50,000, and if you’re a business with a cutting-edge product, this could be a great opportunity.

A business must use the FedEx website to submit entries. There are a few questions to answer about your business.  In addition, there is a requirement for an elevator pitch about what makes your business special.  Also, you have to explain how you would use the funds. A 90 second video submission is an option as well.

NASE Growth Grants

The National Association for the Self-Employed (NASE) has small business Growth Grants of up to $4,000. They are for micro-businesses, and proceeds can be used for a number of things.  They can be utilized for marketing, advertising, expansion, and even to hire employees. These grants are open to everyone. However, you do have to be an NASE member to apply. Membership fees vary based on the membership level chosen. 

USDA Value Added Producer Grant

The USDA’s Value-Added Producer Grant (VAPG) program offers grants for small businesses.  It includes minority owned business. Grants range up to $250,000. They are specifically to help agricultural producers with activities that add value to their products. As a result, grants are open to those in rural areas.  They must be operating as one of the following: 

  • Cooperative
  • Farmer
  • Rancher
  • an independent agricultural producer
  • or an agricultural producer group 

Minority Business Loans and Grants: A Dynamic Duo for Your Business

You do not have to have one to have the other.  However, if you pair them, you get twice the power.  Another great thing about grants is, you aren’t limited in how many you can win.  Apply for all that you qualify for and see what happens. Minority business loans and grants combined could be just the boost your business needs to soar to new heights.

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How Fundability and Minority Small Business Grants Can Build Off Each Other

First, to be clear, minority small business grants, and any grants for that matter, are totally free money that you do not have to pay back.  As such, those awarding grants typically do not consider your ability to repay a grant in the selection process. That doesn’t mean that fundability doesn’t matter though.  It does.  … Continue reading How Fundability and Minority Small Business Grants Can Build Off Each Other

How Fundability and Minority Small Business Grants Can Build Off Each Other

First, to be clear, minority small business grants, and any grants for that matter, are totally free money that you do not have to pay back.  As such, those awarding grants typically do not consider your ability to repay a grant in the selection process. That doesn’t mean that fundability doesn’t matter though.  It does. 

Your Level of Fundability Can Affect Your Ability to Win Grants, and Winning Minority Small Business Grants Can Help You Build Fundability 

How does this work?  How does the fundability of your business affect your ability to get grants, and how can getting small business grants help you build fundability? Think about it.  Of course, the main thing that grantors are looking for is a business that can be successful. That means having a winning business idea. That being the case, applicants focus on that piece.  They present a fabulous pitch and a winning business plan, then they execute a flawless presentation and hope those that make the decisions love it.  

Check out our best webinar with its trustworthy list of seven vendors to help you build business credit. 

However, if the competition is a close one, and there are any red flags out there on any applicant, it could mean the difference between winning, and not.  Winning is important, because grants can be a great option for supplementing your funding.

The Bare Minimum: Do I Need Fundability to Get Minority Small Business Grants? 

Most likely, those offering grants are not going to check credit.  They probably do not even really care about your personal financials.  Those pieces of fundability are not likely to come into play. You can find out more about those and the other parts of the fundability puzzle here.  

However, the foundation of fundability needs to be in place.  This is what can make a difference when it comes to winning minority small business grants. What is a foundation of fundability and why does it matter?  It matters because it is what sets your business apart as legitimate. These are the things that separate your business from yourself, and it shows that you have all of your proverbial ducks in a row.  It may never come into play, but if it does, you want to be ready. What are the building blocks of the foundation of fundability? 

Contact Information

The first step in setting up a foundation of fundability is to ensure your business has its own phone number, fax number, and address.   Now don’t panic. That doesn’t mean you have to get a separate phone line, or even a separate location. You can still run your business from your home or on your computer if that is what you are doing.  You do not even have to have a fax machine.  

In fact, you can get a business phone number and fax number pretty easily that will work over the internet instead of phone lines.  In addition, the phone number will forward to any phone you want it too so you can simply use your personal cell phone or landline if you want.  Whenever someone calls your business number it will ring straight to you. 

Faxes can be sent to an online fax service, if anyone ever happens to actually fax you.  This part may seem outdated, but it does help your business appear legitimate to lenders. 

You can use a virtual office for a business address. How do you get a virtual office?  What is that? It’s not what you may think. This is a business that offers a physical address for a fee, and sometimes they even offer mail service and life receptionist services.  In addition, there are some that offer meeting spaces for those times you may need to meet a client or customer in person. 

EIN

The next thing you need to do is get an EIN for your business.  This is an identifying number for your business that works in a way similar to how your SSN works for you personally.  Some business owners use their SSN for their business. This is what a lot of sole proprietorships and partnerships do. However, it really doesn’t look professional to lenders, and it can cause your personal and business credit to get all mixed up.  When you are looking to increase fundability, you need to apply for and use an EIN. You can get one for free from the IRS.

Incorporate

This is the most important step in fundability thus far.  Incorporating your business as an LLC, S-corp, or corporation is necessary to fundability.  It lends credence to your business as one that is legitimate. It also offers some protection from liability. 

Which option you choose does not matter as much for fundability as it does for you budget and needs for liability protection.  The best thing to do is talk to your attorney or a tax professional. What is going to happen is that you are going to lose the time in business that you have.  When you incorporate, you become a new entity. You basically have to start over. You’ll also lose any positive payment history you may have accumulated. 

This is why you have to incorporate as soon as possible.  Not only is it necessary for fundability and for building business credit, but so is time in business.  The longer you have been in business the more fundable you appear to be. That starts on the date of incorporation, regardless of when you actually started doing business. 

Check out our best webinar with its trustworthy list of seven vendors to help you build business credit. 

Business Bank Account

You have to open a separate, dedicated business bank account.  There are a few reasons for this. First, it will help you keep track of business finances.  It will also help when it comes time to do taxes by keeping your personal finances separate from your business finances.. 

There’s more to it however.  There are several types of funding that are not available  without a business bank account. Many lenders and credit cards want to see a business account with a minimum average balance.  In addition, you a merchant account is not an option without a business account at a bank. That means, you cannot take credit cards payments.  Studies show that consumers usually spend more when credit card payment is available.

Licenses

For a business to be legitimate, it has to have all of the necessary licenses it needs to run.  If it doesn’t, warning lights are going to flash all over the place. Research what you need to do to ensure you have all of the licenses necessary to legitimately run your business at the federal, state, and local levels. 

Website

In these times, you do not exist if you do not have a website.  Having a poorly put together website can be even worse though. It is the first impression you make on most.  As a result, if it appears to be unprofessional, your business will look bad before the customer even gives it a chance. 

Spend the time and money necessary to ensure your website is professionally designed and works well.  Pay for hosting too. Don’t use a free hosting service. Along these same lines, your business needs a dedicated business email address.  Make sure it has the same URL as your Website. Don’t use a free service such as Yahoo or Gmail. 

If you are a new business applying for minority small business grants to help get you off of you feet, you may not be ready for all of this yet.  Much of it can be does at square one however, and it is infinitely easier to do so. For example, just go ahead and get a business number and address and use it on your grant applications.  Get a professional website, or at least a prototype, up and running so you have something to show. It could make all the difference.

How Can Minority Small Business Grants Help Build Fundability?minority small biz grants Credit Suite

It’s pretty easy to see how fundability can affect your ability to get minority small business grants.  How is the reverse true though? How can minority small business grants help you build fundability, especially when you don’t have to pay them back so there are no payments to report to business credit. 

Here’s how.  When you get minority small business grants, you have free money to grow and expand your business.  This can help you be more profitable without the debt typically associated with growth. This, in turn, makes it easier to pay back any debt you do have to get in the process of starting and running a business, which will help to build fundability.  

The only question now is, where do you get minority small business grants?  Many private and government agencies offer them, including some corporations.  Some are offered annually, while others are available for one time only. It would be impossible to list all available grants, but here are a few to start with.  Remember to do your research, as all of them have different eligibility requirements and application processes. 

Options for Minority Small Business Grants

If you qualify, there are many grant options available.  There are not as many specifically for minorities, but there are some.  Here is just a sample of what is out there. 

First Nations Development Institute Grants

With a mission to offer grants that help Alaska Natives, Native Hawaiians, and Native Americans, this group is at the top of the list.  They also offer assistance in the application process.

Not only that, but there are a wide range of other opportunities from the First Nations Development Institute. Get on the mailing list to receive information about new opportunities as they become available.

National Black MBA Association Scale-Up Pitch Challenge

Also known as NBMBAA, the Scale-Up Pitch Challenge has cash prizes ranging from $1,000 to $50,000.  The associate states its purpose is to help newer businesses that have an African founder that maintains equal ownership.  

A business must be a member of the NBMBAA to compete.  There is a $10 monthly membership fee. After that, there is an online application.   If chosen, you must submit a three-minute pitch. Then, finalists go on to compete at the NBMBAA annual conference.

Non-Minority Specific Options

There are grants options that can work well even though they are not exclusively for minorities. Some examples include the following.

FedEx Small Business Grant

This grant is the company’s way of working to strengthen small business innovation.  There are 10 grants the company awards each year. They range from $15,000 to $50,000, and if you’re a minority owned business with a cutting-edge product, this could be the grant for you.

A business must use the FedEx website to submit entries. There are a few questions to answer about your business.  In addition, there is a requirement for an elevator pitch about what makes your business special.  Also, you have to explain how you would use the grant funds. A 90 second video submission is optional.

NASE Growth Grants

The National Association for the Self-Employed (NASE) has small business Growth Grants of up to $4,000. They are for micro-businesses, and proceeds can be used for a number of things including marketing, advertising, expansion, and even to hire employees.  Anyone can apply, but you do have to be an NASE member. Membership fees vary based on the level of membership you choose. 

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USDA Value Added Producer Grant

The USDA’s Value-Added Producer Grant (VAPG) program offers grants for small businesses.  It includes minority owned business. Grants range up to $250,000. These grants are designed specifically to help agricultural producers with activities that add value to their products. As a result, grants are open to those in rural areas.  They must be operating as one of the following: 

  • Cooperative
  • Farmer
  • Rancher
  • an independent agricultural producer
  • or an agricultural producer group 

Minority Small Business Loans and Fundability: It Goes Both Ways

While neither directly affects the other, the two do affect each other indirectly.  Having a strong, fundable foundation can help the pendulum swing your way when it comes time to make a grant decision.  By the same token, if you win a grant, the funds could help you build strong fundability if used properly. The two together make a winning team for your business. 

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How to Supplement Funding with Minority Business Grants

While it’s almost impossible to fully fund a business on grants alone, minority business grants are a great way to supplement other types of funding.  For example, if you win a grant, you can use it to reduce the amount of debt you need to take on. You could use the funds to reduce the amount of cash on hand you have to use.  In turn, this would reduce the need to take on debt in the future. Grants can be a great funding option for minority owned business.

Minority Business Grants are a Great Way to Supplement Funding

Of course, finding and winning minority business grants is easier said than done.  It takes considerable time and work to do so. First, you have to do the research to find the grants you qualify to apply for.  Then, you have to do the work of filing the grant application. In some cases, the application is just the first step in a long, competitive process. 

Why Bother with Minority Business Grants?

Some wonder what the point is in even bothering to try to get grants if they are so rare and competitive.  Is it worth it if they are so hard to get? The simple answer is, yes. Grants are free money. The funds never have to be repaid. If you win a grant, you get to keep the funds free and clear.  

However, there are sometimes compliance points that come into play.  There may be certain rules for the use of the funds you have to adhere to.  Still, when it comes to minority business grants, they are all designed to help you build a better business.  For free money, the compliance hassle is a small price to pay. 

Where Do Minority Business Grants Come From? 

They come from a variety of sources.  The government issues some grants from minority business owners.  Special agencies will sometimes have grant opportunities. Even private businesses will offer grants sometimes, including big names like FedEx. 

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Do You Qualify for Minority Business Grants?

Who knows?  Maybe? If your business is under more than 51% minority ownership, the answer is likely yes.  Other than the minority ownership piece, some minority business grants are designed for a specific minority group. It can take some time to seek out those grants for which you specifically qualify. 

Some Minority Business Grants to Try

Here are some minority grant options to consider.  There are certainly others out there however, and they are not always well advertised.  This means you need to be sure to do your own research also. 

Minority Business Grants: First Nations Development Institute Grants

The mission of this group is to offer grants that help Alaska Natives, Native Hawaiians, and Native Americans.  They offer assistance in the application process in addition to funds.

Not only that, but there are a wide range of opportunities from the First Nations Development Institute.  New ones initiate as old ones retire. There is a mailing list you can join to receive information about new opportunities as they become available.

Minority Business Grants:  National Black MBA Association Scale-Up Pitch Challenge

Also known as NBMBAA, the Scale-Up Pitch Challenge has cash prizes ranging from $1,000 to $50,000.  The associate states its purpose is to help newer businesses that have an African founder that maintains equal ownership.  

A business must be a member of the NBMBAA to compete.  There is a $10 monthly membership fee. After that, there is an online application.   If chosen, you must submit a three-minute pitch. Then, finalists go on to compete at the NBMBAA annual conference.

Non-Minority Specific Options

There are grants options that can work well even though they are not exclusively for minorities. Some examples include the following.

FedEx Small Business Grant

This grant is the company’s way of working to strengthen small business innovation.  There are 10 grants the company awards each year. They range from $15,000 to $50,000, and if you’re a minority owned business with a cutting-edge product, this could be the grant for you.

A business must use the FedEx website to submit entries. There are a few questions to answer about your business.  In addition, there is a requirement for an elevator pitch about what makes your business special.  Also, you have to explain how you would use the grant funds. A 90 second video submission is optional.

NASE Growth Grants

The National Association for the Self-Employed (NASE) has small business Growth Grants of up to $4,000. They are for micro-businesses, and proceeds can be used for a number of things.  They can be utilized for marketing, advertising, expansion, and even to hire employees. These grants are open to everyone. However, you do have to be an NASE member to apply. Membership fees vary based on the membership level chosen. 

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USDA Value Added Producer Grant

The USDA’s Value-Added Producer Grant (VAPG) program offers grants for small businesses.  It includes minority owned business. Grants range up to $250,000. They are specifically to help agricultural producers with activities that add value to their products. As a result, grants are open to those in rural areas.  They must be operating as one of the following: 

  • Cooperative
  • Farmer
  • Rancher
  • an independent agricultural producer
  • or an agricultural producer group 

What About Loans? 

As I said above, you can’t fund a business on grants alone.  They work better as a supplemental funding source. Likely, you will need to seek out business loans.  There aren’t a ton of loans specifically for minorities, but some options do work better for minority business owners than others. 

Minority Specific Loans

Minority specific business loans are few and far between.  However, they do exist. Some only offer minority business loans to those in certain cities.  Some are only available if you are looking to land government contracts. Each have their own requirements, and it takes a ton of time and research to figure it all out.   With the information below though, you don’t have to start from scratch.

Business Consortium Fund, Inc.

This program is specifically for minority businesses.  It is certified by the US Department of the Treasury. Businesses can qualify for $75,000 to $500,000 after approval.  Also, amounts above $500,000 are available on a case by case basis.  

Allowable fund usage includes working capital, equipment financing, and contract financing. To apply, you have to certify your business through The National Minority Supplier Development Council. In addition, you must have a supplier relationship with the Council. 

National African American Small Business Loans

These loans are only available in Chicago, Los Angeles, and New York.  The NASBLF  provides capital to African American minority-owned businesses.  Specifically, those that are not eligible for more traditional forms of financing.  

Loans range from $35,000 to $250,000.  In addition, other services are available. These include technical assistance and financial consultation services. Business owners can use funds for expansion, equipment purchases, and cash flow. They only have $30 million total to loan out in a year, unless more grant funds become available to the program.

Accion

Accion offers loans in all states.  Funds are available to the following: 

  • minorities 
  • veterans
  • women
  • those with disabilities
  • and low to medium income business owners

Loan amounts start from $200,000 and go up to $300,000. Business owners can use them to help build businesses from the beginning.  Accion can also put owners in contact with other resources to help build a network of support.

The minimum credit score for these loans is 575.  In addition, you cannot be 30 days late on credit cards, loan payments, or bills.  Also, you will not qualify if you have any late rent or mortgage payments over the past year.

Community Development Financial Institutions Fund (CDFI)

This group lends to those communities that are traditionally underbanked, including business owners that are minorities.  Since the Community Reinvestment Act of 1977, banks are required to offer funding in communities that find it hard to qualify for traditional funding.  Big banks often fund minority business owners indirectly through their CDFI partners.  

To locate a CDFI, contact the local business development center or your local Small Business Development Center office.  They can hook you up.  

While the application process can be long, they do offer assistance to prepare for future bank loans.  Another benefit is that their rates are competitive within the U.S. 

Union Bank Business Diversity Lending Program

This program from Union Bank assists minority business owners with loans and lines of credit. To qualify as a minority for this program you must be Hispanic, American Indian, Latino, Asian, Alaskan Native, African American, Native Hawaiian, or other Pacific Islander.   

A business that has revenue of up to $20 million could qualify for a loan of up to $2.5 million.  However, you must be in business for at least 2 years, and the minority business owner must own at least 51 percent. 

Indian Affairs

Businesses owned by Native Americans can get financing from the federal government through the Indian Affairs branch. An individual can fill out an application for up to $500, 000, but business entities and tribal enterprises my apply for more.  

Potential borrowers can apply with any lending institution, they just have to use the application for Indian Affairs.  Additional requirements are in place if the funds are used for construction, renovation, or refinancing. In general, a list of collateral, a credit report, and an analysis of business operations are required.

Camino Financial 

Camino Financial is an online lender that offers minority-owned businesses loans.  They also offer business solutions. They are an easy and convenient option.  Mostly because they offer the entire application process online. Microloans range from $5,000 to $50,000.  Also, they offer small business loans between $10,000 to $400,000. 

There is no requirement for security.  In addition, you can pay off the loan any time with no penalties or fees. Pre-qualification comes within 24 hours.  Since all documents are submitted online, you do not have to make unnecessary trips to turn in or sign papers either. 

Other Loans that Are a Good Option for Minority Businesses

While not specifically for minority business owners, these loans often work well for them.

Fundbox

Surprisingly, there is no minimum credit score.  Consequently, if you have at least $50,000 in annual revenue, you can qualify for a line of credit from Fundbox.  Additionally, you need to be in business for at least 3 months.  Amounts range from $1,000 to $100,000 with rates from 10.1% to 79.8%.  Terms are for 12 weeks, and funds are available as quickly as the next business day.  

Kabbage

Kabbage is another lender that will make loans to borrowers with credit scores as low as 500.  Terms are for 6, 12, or 18 months and amounts range from $2,000 to $250,000. Interest rates are higher, at 24% to 99%.  Funding can take several days, but sometimes happens in just a few minutes. 

QuarterSpot

Another option is QuarterSpot.  In fact, some prefer it due to terms that go up to 18 months.  Loans range from $5,000 to $250,000. However, rates are pretty high at 30% to 70%.  Still, approval can come in as little as 24 hours. 

Credibility Capital

Credibility Capital loans range from $50,000 to $400,000.  Terms are for 1,2, or 3 years, with rates ranging from 10% to 25%.  Like most, funding usually takes around 7 days.  

SmartBiz

Lastly, SmartBiz offers low cost financing for expansion.  Unlike the others, these are SBA loans. However, with SmartBiz, funding happens a lot faster than with traditional financial institutions.  Truthfully, they can take as little as a few weeks instead of a few months. 

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Minority Business Grants and Loans Make a Winning Combination

A business with minority ownership has resources available to it that are not available to all business owners.  They come in the form of both loans and grants for minorities. Pursuing both allows you take advantage of as many resources as possible. 

If you still need more, you can apply for loans that are not specifically for minority owned businesses.  Even if you do not qualify for traditional financing due to a low credit score, there are options.  

Regardless of what combination of funding works best for you, remember to ensure your business is as fundable as possible.  Find out more about fundability and what affects it here. 

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