Are you a woman or minority looking to secure working capital? Fast Capital 360 has compiled a list of the best small-business grants for women and minorities to fuel your entrepreneurial endeavors.
Finding funding can be the hardest part of getting your business off the ground. Sadly, this obstacle is harder for women and minority entrepreneurs. Just how hard?
While minorities own 15 percent of small businesses in the U.S., and women own 29 percent, they receive an unproportionate amount of the total loan dollars given.
According to a Senate Committee on Small Business and Entrepreneurship report, women-owned small businesses receive 16 percent of all conventional small business loans and only 4.4 percent of the total dollar amount of loans given.
And minorities fare no better. As reported by the Minority Business Development Agency, minority entrepreneurs are denied loans at a rate almost 3x higher than their white counterparts.
The good news is, there are many small business grant opportunities that can help you fill funding gaps–many geared toward minority and women entrepreneurs.
Small Business Grants For Women & Minorities
One of the clear advantages grants hold over small business loans and credit cards is that they are essentially free money that you don’t have to pay back.
As you might expect, they’re in high demand and the application process can be quite competitive and daunting.
But don’t get discouraged. By following these tips, you can maximize your time and your chances.
Do your research
Identifying all the grant opportunities that are a good fit for your small business is a challenge. Consult with your local Small Business Development Center or SCORE office to learn about grant options that are relevant to your business. Also, online resources like Grants.gov are great tools to find and apply for open opportunities.
Verify your eligibility
Grant application processes can be daunting. So before you embark on what can be a lengthy application process, it’s essential to verify that your business meets the specific demographic, education and business requirements.
The calendars of entrepreneurs and small business owners are often jammed-packed, so it’s easy to push off non-essential tasks, like applying for a grant. Don’t make this mistake. Block off your schedule to give this task the due diligence it deserves.
Keeping track of all the grants you qualify for, their various application forms and deadlines can be a messy affair. To keep everything in order, create a spreadsheet containing pertinent information related to the application process.
Define your business plan
Whatever grant you apply for, a well-crafted business plan will surely be a requirement. Make sure to describe why your business will be successful, how the funding will be used and how you’ll fulfill the specific goals of the grant.
Resources for Getting Started
These online resources are a good place to start when researching what grant opportunities are available to you as a minority or woman business owner.
The SBA is home to a wealth of information for small business owners looking to start and grow their business. Here women and minorities can easily identify many programs, including grants specifically tailored to your demographic.
If you’re looking for federally sponsored grants, the best place to start is Grants.gov. Here you’ll be able to search through a real-time database of all federal grants, including those reserved for small business owners.
The MBDA is part of the U.S. Department of Commerce and is specifically designed to advance the growth of minority businesses. On the MBDA website, there’s information about a variety of financing options for minorities, including open grant competitions.
Small Business Grants for Minority and Women Entrepreneurs: 7 Promising Opportunities
Now that we’ve covered how to identify and apply for grants let’s review some of the best options for minority- and women-owned businesses.
Eligibility: The Cartier Women’s Initiative Award is awarded once a year to female entrepreneurs around the world. The Cartier award grant is intended to women business owners in the early stages of development of their business.Benefit: Seven $100,000-grand prize winners and fourteen $30,000-second prize recipients
Eligibility: The SBA hosts an annual competition called InnovateHER for businesses with a marketable product or service that positively affects the lives of women and families. To participate, you must first enter and win a local challenge to advance to the national semifinal round.Benefit: The top three winners in past years have competed for prizes of $40,000, $20,000 and $10,000.
Eligibility: The Girlboss Foundation awards one grant biannually to female entrepreneurs pursuing creative endeavors.Benefit: $15,000 and online exposure to the Girlboss community–a private network of ambitious, influential women.
Eligibility: This program awards one grant to women business owners each month. One of these winners is then selected for their annual grant.Benefit: Twelve $1,000 grant awardees, one $10,000 annual winner.
Eligibility: The contest is open to for-profit businesses in operation for at least six months with no more than 99 employees.Benefit: Ten winners will receive grants for their business and FedEx printing and business services. Prize packages range from $7,500 to $25,000.
Eligibility: This program is a competitive grant designed to support targeted technical assistance, training and other activities leading to the development or expansion of small and emerging private businesses in rural areas.Benefit: There is no maximum grant amount; however, smaller requests are given higher priority. Generally, grants range from $10,000 to $500,000.
Eligibility: If you’re a member of NASE, you can apply for their small business growth grants for financing a particular business need.Benefit: One grant is awarded per month up to $4,000.
Exploring Other Funding Options
While getting your hands on free funding is every small business owner’s dream, it’s certainly not a guarantee given the competitive nature of the grant world.
And as we discussed, securing funding through traditional bank channels can be a challenge for minority and women entrepreneurs. Why? Factors vary, but some of the most common include:
Lower net worth
Wealth levels for Latinos and Black business owners are reportedly 11 to 16 times lower than for whites.
Industries perceived as risky
Female entrepreneurs choose low-growth sectors like retail, with about 10% of women-owned businesses fitting into the retail category—and making up 30% of all retail businesses.
Fortunately, there are plenty of small business funding options available to minority and women entrepreneurs looking to grow their business. For more information on these topics, check out Business Loans for Women and Minority Business Loans.
Obtain the Capital You Need to Grow and Succeed
There’s no getting around it: to set your entrepreneurial endeavors into motion, you need capital. Grants, in addition to alternative lending, will help you close your funding gap. So stay vigilant of open grant opportunities, take the time and make the required effort to apply as it may equate to free money for your business.