Grants for Minority Business Owners

Access to funding can play a major role in the growth of a small business. But for many minority-owned businesses, access to capital hasn’t always been equal. Historically, discriminatory lending practices created structural barriers to borrowing. While there are now laws in place to prevent these practices, the ripple effects can still have an impact.

Grant funding is one way organizations are working to even the playing field. They’re often offered by government agencies, corporations and nonprofit organizations. They provide business funding that doesn’t need to be repaid, which can mean there’s a lot of competition. However, they can offer valuable support for minority-owned businesses looking to grow or start their business without taking on debt.

Federal grants for minority owned small businesses.

If you’re exploring federal grant programs, there are a few key ones to consider. Not all are built specifically for minority-owned businesses, but there are some that offer targeted support for underrepresented entrepreneurs.

Minority Business Development Agency (MBDA)

The Minority Business Development Agency is a federal agency under the U.S. Department of Commerce. It was created to promote the growth of minority-owned businesses and support small business owners — especially those in key industries or underserved regions. It often offers grants focused on key industries like manufacturing, tech and infrastructure.

In addition to grants, the agency also funds a network of MBDA Business Centers. These centers are there to help minority business owners navigate common barriers. They can help you create a business plan, prepare a grant application, improve your business credit score or pursue federal contracting opportunities. Many also offer mentor programs and may help open doors to partnerships with the local chamber of commerce and nonprofit organizations.

Grants.gov

Grants.gov lists nearly every federal grant in one place. Many of the federal grants listed are geared toward nonprofits, but some support for-profit businesses, especially if they’re focused on innovation, education or local development.

While the grants won’t always be tailored for minority-owned small businesses, it’s where you’ll find federal opportunities run by the U.S. Small Business Administration (SBA), the Department of Commerce and the USDA. Plus, you can filter opportunities by eligibility, funding type or agency to narrow down the list.

Other grants for minority owned businesses

There are other grant opportunities beyond federal programs. Many nonprofits, corporations and community organizations offer small business grants for minority entrepreneurs. They may be for smaller amounts, but they often come with additional support like mentorship and other resources.

Keep in mind you’ll need to check each program’s eligibility requirements, application process and deadlines. Some may accept applications regularly, while others may only accept them once a year or only in certain cities. It can be a good idea to sign up for alerts or set calendar reminders for programs that fit your business.

HerRise MicroGrants. Every month, HerSuiteSpot offers a $1,000 grant to women-owned businesses. The program was built to help close a funding gap and support women entrepreneurs at a stage where even small capital can make a big difference.

NAACP Powershift Entrepreneur Grant. The NAACP Powershift Grant is an annual grant that aims to empower Black-owned businesses. The businesses chosen are granted $25,000 and get access to resources and tools to help fuel their businesses.

Freed Fellowship. Freed Fellowship grants $500 to a small business owner every month. In addition to the grant, you also become a part of their community of fellows where you’ll get access to support, strategies and mentorship.

Comcast RISE. Comcast RISE offers $5,000 grant packages that include a technology upgrade, marketing support and business consultation services. It’s available in different cities around the nation and aims to support small businesses and strengthen local communities.

Feed the Soul Foundation. Feed the Soul Foundation offers a restaurant business development program that provides six months of consulting to businesses owned by historically marginalized founders — including Black, Indigenous, Latinx, LGBTQ+ and entrepreneurs with disabilities.

BREAKTHROUGH Program. The BREAKTHROUGH Program offers $5,000 grants plus business advice for small businesses and startups in the tech industry. Winners get feedback and advice from experienced mentors who can help them grow and scale their business.

Juntos Crecemos. Juntos Crecemos supports Hispanic-owned businesses in the food and beverage industry and has provided grants as much as $200,000. Winners also get access to their business health accelerator program that offers business coaching, mentorship and workshops.

FoundHer. FoundHer supports native Hawaiian, Pacific Islander and Asian women entrepreneurs with grants and business mentorship. They have two programs, one focusing on industries like food and consumer packaged goods and another focused on tech, fashion, and health and wellness.

Alternatives to grants for minority owned small businesses.

Grants are a great funding opportunity for small businesses. However they’re competitive and often tied to strict eligibility requirements or timelines. If you need a funding option that’s more predictable or easier to access, here are some alternatives to consider:

Crowdfunding. Crowdfunding allows small businesses to raise money from a group of supporters — often through online platforms. Many businesses offer these backers products or perks for their donations. It can help build visibility, allow you to raise some capital, and build a community of customers without taking on debt.

Business term loan. Business term loans provide you with a lump sum of cash that you can repay over time in smaller fixed payments. They’re great for making large one-time investments in your business like purchasing new equipment. Online lenders may offer faster decisions and have less strict requirements than traditional lenders like banks and credit unions.

Business line of credit. A business line of credit is a type of business loan that lets small business owners draw funds from a set credit limit. As you repay the funds, they become available to borrow again. It can be a good option for managing ongoing expenses and cash flow.

Microloans. Microloans are small business loans, typically for less than $50,000. They’re generally geared toward early-stage businesses and may come with lower loan requirements. If you’re just starting out, this can be an accessible option.

The Bottom Line

Grants for minority-owned businesses are out there. When the timing and fit align, they can provide meaningful support — especially when they come with additional support such as mentorship, educational resources and access to things like government contracts.

Keep in mind that they can be competitive. Consider doing your research early so you know what’s out there and can choose to apply for programs that fit your business. Even if you don’t win, the process can help you connect to new resources and open more doors.