Grants are available for minorities who currently own a business or are interested in owning a business. When establishing a business, it is important for a minority business owner to decide if becoming certified as such is a benefit to the business. Federal grant programs can set aside funds and designate them for minority-owned businesses.
Business grants for minorities are available through the Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs. These programs provide research and development grants to small businesses with innovative ideas or prototypes. The intent of the programs is to help the businesses develop the ideas into products and services for the marketplace. Minority businesses can also apply for some research grants awarded by the National Science Foundation (NSF).
Minority-owned businesses can apply for other federal grants as long as businesses are eligible entities as described in the grant application. Grants are available from all federal agencies and departments. Billions of dollars are distributed annually with a large portion awarded to small businesses. Cooperative agreements should also be considered by minority businesses. These can be less competitive than grant opportunities.
Another resource for minority business grants is state governments. They offer several grant opportunities for small businesses. Some grant awards may be tied to job creation. Others are simply for small business owners to participate in development projects that benefit the state and its residents.
Local governments rarely offer direct grants to small businesses. They are more likely to enter into cooperative agreements with businesses who offer products and services they government needs. This is similar to a vendor relationship. However, there are local organizations that provide minority business grants.
Minority business associations may offer small grants for local businesses. Chambers of commerce can be another source of business grants for minorities. Again, these will be small grants but can provide ongoing financial support for minority-owned businesses.
Business incubators are the best source of start-up business grants for minorities. They provide competitive financial assistance to minorities just beginning a business venture. In addition, the minority-business owner will receive guidance from business mentors on issues such as corporate structure, budget systems, and management practices.
Foundations may also provide grants for minorities to start a business. They are less likely to support established businesses. Their grant-making will be for the purpose of economic development for local communities. While several foundations support entrepreneurial activities, for the vast majority, support of small businesses will be a component of an overall economic and workforce development strategy.