In the world of business and entrepreneurs, the black community has been traditionally underrepresented. Black men and women account for just 10% of business owners.
One of the most significant barriers to the success of black business owners is access to funding. Research shows that black-owned businesses are less likely to receive funding from financial institutions or investors than their white counterparts.
Understanding these barriers, the private and public sectors have worked together to provide black-owned companies’ funding opportunities. Here are 10 grants and other funding opportunities to help you grow your business.
1. The USDA Rural Business Enterprise Grant Program
The USDA Rural Business Enterprise Grant Program provides $10,000 to $500,000 to small business owners to develop or expand their enterprise in a rural area. While this grant is available to all small businesses with 50 or fewer employees, it is an excellent opportunity for black-owned firms operating in rural areas.
Grants can be used for a wide range of purposes, including employee training, business planning and property or equipment acquisition. Applications can be found on the USDA’s website. Grants are typically granted once per year.
2. National Association for the Self-Employed Grants
This nonprofit membership organization provides training opportunities and grants for small business owners. This grant program is open to all small business owners who are active members of the organization.
The association provides grants of up to $4,000 per year. To apply for funding, you need to give a detailed description of how the funds will be utilized and how the grant will help your business grow.
3. Minority Business Development Agency Grants
The U.S. Department of Commerce operates the Minority Business Development Agency. The agency provides educational resources and technical assistance opportunities for minority business owners.
Black-owned businesses can find funding opportunities at one of the agency’s minority business centers. These centers are located in major U.S. cities and provide several grants annually. The agency also provides technical assistance, mentoring opportunities and financial counseling to businesses, depending on company needs and agency availability.
4. Kapor Capital
Kapor Capital is a San Francisco-based venture capital firm specializing in providing funding opportunities for diverse entrepreneurs, particularly black-owned businesses.
While Kapor Capital provides traditional business funding and not grants, it is committed to helping black entrepreneurs expand their businesses. The company provides the majority of its budget to black-owned and women-owned firms.
5. Backstage Capital
Backstage Capital is a venture capital firm known for investing in black-owned businesses. Backstage Capital is owned by Arlan Hamilton, an entrepreneur who experienced homelessness and other significant challenges during his adolescence.
To date, the firm has invested over $8 million in companies owned by underrepresented entrepreneurs. Further, Backstage Capital recently started Backstage Crowd, a crowdfunding mechanism where investors can provide up to $5,000 to diverse entrepreneurs.
6. SBA 8(a) Business Development Program
Socially or financially disadvantaged small-business owners, including black-owned businesses, can apply for the Small Business Administration’s SBA 8(a) program. If accepted into the program, it provides entrepreneurs with funding guidance, technical assistance, training and other resources.
To apply for the program, the business must be at least 51% owned by an entrepreneur who has been subjected to discrimination or prejudice and placed at a financial disadvantage because of race. Other eligibility requirements can be found by visiting the program website.
The SBA also offers other programs and funding opportunities to help black entrepreneurs grow their businesses.
In addition to the SBA 8(a) program, the HUBZone program provides mentoring, technical assistance and training to diverse business owners who live in geographically underrepresented areas. The SBA can also connect business owners with funding opportunities, including SBA grants and investments.
7. Operation Hope Small-Business Empowerment Program
The Operation Hope Small-Business Empowerment Program was created to help business owners who live in disadvantaged neighborhoods, including black-owned businesses. If accepted into the 12-week program, business owners receive training, counseling and access to financing options, including venture capital and grants.
The program also provides financial management classes and credit counseling to accepted businesses. The application process is competitive, so you want to make sure you spend enough time to craft a compelling application.
8. Community Development Financial Institutions Fund
Operated by the U.S. Treasury, the Community Development Financial Institutions Fund helps disadvantaged business owners access funding capital. Black-owned businesses can access grants, investments, loans, financial services and technical assistance. Black entrepreneurs can search for a local funding partner who has received backing from the Fund.
The amount of money entrepreneurs can receive is determined by their local funding institution. Many institutions also provide technical assistance, including legal counseling, financial seminars and information technology assistance. The technical assistance is determined by the needs of your business and the expertise available.
9. Founders First Capital Partners
The Founders First Capital Partners program does not provide grant money to entrepreneurs. Still, it is an excellent opportunity for black-owned businesses to access much-need capital funding with flexible terms.
The program offers a unique investment opportunity for minorities, women and veteran business owners. The funding is paid back on an incremental basis and payments are determined by a company’s monthly cash flow.
If the company is experiencing decreased sales, monthly payments will be adjusted accordingly. In addition to funding, the program offers educational resources and counseling services to help business owners grow their businesses.
10. Harlem Capital Partners
Harlem Capital Partners debuted a program in December 2019 that specializes in helping women and minority business owners access funding capital, including grants, loans and investments.
The firm prioritizes companies that are profitable and operate in the technology services industry. The program hopes to fund 1,000 diverse businesses in the coming years.
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