Minority small business grants are typically given to agencies that help minority entrepreneurs. These agencies provide different kinds of support to guide the entrepreneurs run their businesses successfully. For the individual minority entrepreneur, there is a range of federal business development programs specifically targeted at them.
Grants to individuals might be available from private agencies and also probably from some state governments. It is a moot question, however, whether the effort involved in locating and then going after these grants would be worthwhile in a business sense.
If you are looking to the government for support, particularly at the federal level, the rule is: LOOK FOR A HAND, NOT A HANDOUT. Grants are for organizations that provide a HAND to a beneficiary group. And grant-receiving organizations usually have to match the grant with their own funds.
For example, if you plan to provide support to businesses owned by African, Asian, Hispanic, Native and other Americans subjected to prejudice and cultural bias, you could go to Catalog Of Federal Domestic Assistance web site and link to Minority Business Development Grants section. Minority small business grants are given only if the grant-giving agency is convinced that the applicant organization has the required facilities and commitment.
Finding and getting grants is a time-consuming and often frustrating exercise, as you could read in the main grants article, US Government Small Business Grant.
Minority Small Business Development Program
While an entrepreneur could not expect to receive federal minority small business grant, he or she could look to other kinds of support. SBA, the government agency dealing with small business development, has a Minority Enterprise Development Program. This is known as the 8(a) program.
This program seeks to provide minority entrepreneurs and contractors assistance with getting federal government contracts. Assistance is provided for
- Understanding of,
- Preparation for,
- Negotiating and
- Competing for
federal contract awards.
To qualify for this assistance, the small business must be owned 51% or more by eligible persons. Furthermore, the business proposal must demonstrate a potential for success.
Surety Bond Guaranty Program
Federal, state and local government contracts require that a bidder must produce a bond from a surety. The surety would undertake to see that the project is completed in case the contractor fails to perform as agreed.
Minority small businesses might be unable to obtain surety bonds from commercial surety companies. To help them, SBA provides a guaranty to reimburse a portion of any losses suffered by the surety company in case the contractor fails to perform.
Together with the assistance outlined in the previous section, the surety guaranty program helps minority entrepreneurs to succeed in the market place, much better than a minority small business grant probably could.
Minority Small Business Loans
Under the main 7(a) loan program of SBA, there is a special Pre Qualification Pilot Loan Program that seeks to reach out to the under-served sections of society.
Under this program, intermediaries help market SBA programs among the disadvantaged groups, and also help prospective borrowers to develop feasible and viable business proposals and loan applications.
Minority Business Development Agency
MBDA is under US Department of Commerce, and helps all minority enterprises – small, medium and large. The mbda.gov web site provides an idea of the wide range of assistance provided.
Access To Markets: Aquaculture, Business To Business, Business To Government, Business To World and Franchising.
Access To Capital: General Information, Basic Requirements, Match Me To Capital and Bonding.
Management & Technical Assistance: General Information, Marketing, Financing, Business Plan and E-Commerce.
Education & Training: Harvard Business School, Franchising Basics, Resources, Courses in …
The web site also has links to current opportunities, training courses, information, government policies, events and other news.
The agency offers publications relating to capital, demographic, industry and export trends, as also tools and services for your business.
Any minority entrepreneur, who is serious about doing business, would find these kinds of assistance far more valuable than getting a minority small business grant.