The Great Resignation caused more than a reassessment of career choices — it lit the entrepreneurial spirit within millions. By Q3 of 2021, there were ~1.4m new business applications on the year, over a 400k increase from 2019.
Minorities are also taking advantage of the shift, with Black Americans making up 11% of the new businesses started in 2020 (up from 3%).
But entrepreneurship isn't all sunshine and roses, especially during a pandemic. Roughly 42% of Black business owners stated their companies were worse off than expected after covid hit. Some even had to cut wages or take up a side job.
Loans are often the go-to for struggling business owners, but many minority entrepreneurs lost trust in the system after witnessing prejudice during the application process.
Minority small-business grants, on the other hand, can be a viable option for startups and financially impacted minority-owned companies.
Wondering which ones are the best to apply for in 2022? Then continue reading.
How Much Does It Cost to Start a Business?
Funding is the top issue minority groups face when starting a business. With disparities in wages and cross-generational wealth, on top of institutional discrimination (both prior to and amid the pandemic), business ownership can seem impossible to achieve or sustain.
Fortunately, launching a venture in 2022 is cheaper than ever, thanks to internet business opportunities. Depending on the industry, location, and product (or service), business startup costs can range wildly (the average set up cost in the US is $725). It all depends on the business expenses — the most common being:
- Website design hosting fees
- Labor costs for employees and/or contractors
- Inventory and technology costs
- Insurance, license, or permit fees
- Business plan costs
- Rental space and office furniture costs
- Ads and promotional costs
If you opt for real estate and salaried employees, this can increase startup costs to the hundreds of thousands.
According to Shopify, here’s how small-business owners allocate their funds during their first year of operation:
- 11% on operating costs
- 10.3% on marketing costs
- 9% on online costs
- 31.6% on product costs
- 8.7% on shipping costs
- 18.8% on team costs
- 10.5% on offline costs
The best way to lower costs is to opt for a service-based company or one that can operate remotely.
For example:
- Opening a consulting firm
- Building an app or video game
- Selling online courses
- Creating a product and selling it online
- Developing assistive technology
Here are other great small-business ideas to consider. Once you have a few in mind, use the SBA calculator to estimate how much you may need to jumpstart your new venture.
4 Resources to Find Minority Small-Business Grants
Finding grant opportunities requires consistent research to prevent missing application deadlines. Aside from conducting comprehensive Google searches, other resources to find minority small-business grants include:
- Grants.gov: Grants.gov has a database with hundreds of federal grants for small-business owners. Use the filtering options to narrow down options.
- Minority Business Development Agency: This association helps minority entrepreneurs find financial opportunities by listing available grants across the US. Plus, they offer in-person mentorship at their business centers.
- SBA.gov: The Small Business Administration offers various resources to minority entrepreneurs, including counseling, training, funding programs, and certifications.
- State and city websites: Most states and some cities have business grant programs for their residents, such as Georgia and Baltimore. Check your local chamber of commerce and state/city websites (e.g., Florida.gov). A quick Google search for “minority business grants in [state name]” can showcase options in your area.
How to Apply for Minority Small-Business Grants
It’s critical to read the eligibility requirements and application process for each grant you apply to. Each is different, so we'll cover the basic steps and requirements for most minority grants.
- Step One: Ensure your business qualifies as a minority-owned company (at least 51% owned by a minority group), then apply for certification.
- Step Two: Research grant opportunities and read over the other eligibility requirements for the grant, such as company size, annual revenue, location, etc.
- Step Three: Gather your documentation (financial records, proof of citizenship, certification, tax returns).
- Step Four: Write up a solid business plan, even if you’re not a startup or new business (this shows your future growth plans).
- Step Five: Apply for the grant before the deadline.
If you need help during the application process, reach out to the program to speak to a representative.
9 Small Business Grants for Minority Entrepreneurs
High interest rates and loan denials can hold minority groups back from business ownership. Unfortunately, so do some business grant programs.
One study shows minority-owned businesses (particularly Black ones) faced difficulties obtaining federal covid relief funds from the PPP (Paycheck Protection Program). While the vast majority of lenders didn’t track demographic data, for the 996k loans for which that information was available, an astounding 71% of relief funds went to white business owners.
Thankfully, there are grant programs designed specifically for minorities. Here’s a look at 9.
1. Coalition to Back Black Businesses
This coalition gives grants to businesses owned by Black entrepreneurs meeting the following criteria:
- 3-20 employees
- Operating in a distressed community
- Impacted financially by covid
The grant is $5k, and recipients get a chance to win another grant for $25k. Decisions are also quick, taking about a month.
Online resources and mentorship are available to assist Black-owned businesses overcome the financial impact of the pandemic and other roadblocks.
2. Fast Break for Small Business
The grant program was formed by LegalZoom, the WNBA, NBA, and NBA G League for small businesses in underserved and underrepresented communities. It aims to shed light on the inequities these businesses face.
Eligible companies can apply for $10k in grants and up to $500 in LegalZoom services (handy for setting up your business). The program awarded 50 grantees $10k each in January 2022, including:
- Magic City Barber in Birmingham, Alabama
- Mah Melanin in New Sarpy, Louisiana
- Shanice’s Sport Entities in Canton, OH
Applications reopened in April 2022.
3. National Black MBA Association Scale-Up Pitch Challenge
The National Black MBA Association runs an annual pitch challenge for Black entrepreneurs. This year’s theme is the “Collegiate Edition,” with awards geared toward college students.
The idea is to help folks "Make Big Ideas Bigger" by funding their business dreams. There are 4 opportunities to win — last year's winners received:
- 1st Place: $50k
- 2nd Place: $10k
- 3rd Place: $7.5k
- People’s Choice: $1k
Judges choose the top 3, and the audience votes for the People’s Choice award. This year’s award will be $25k for 1st place and cash prizes for 2nd and 3rd place.
4. ThriverCon Scholarships for Emerging Entrepreneurs
ThriverCon is a diverse virtual conference featuring speakers from all backgrounds and walks of life. So it’s no surprise their scholarship program does the same. To qualify for the ThriverCon grant, you must identify as BIPOC (Black, Indigenous, people of color), woman/womxn/femme, and/or LGBTQ+.
Winners get:
- $500 and a free ticket to ThriverCon
- 30-minute coaching session with Marian Valenza (founder of Thriver Lifestyle and ThriverCon)
- Full access to Valenza’s Radical Ownership Academy Program
- Copy of Unleash Your Voice: Powerful Public Speaking for Every Woman
Shayla Price, owner of PrimoStats, a database of stats used by freelance writers and journalists, won last year’s grant:
“The grant helped me hire a part-time research specialist to add stats to our database. This grant played an instrumental role in directly helping our customers.”
5. Comcast Rise Grant
This grant is designed for small businesses more than half-owned by a BIPOC person or people. To qualify, the business must be at least one year old, independently owned, and exist in a Comcast service area.
The program provides small businesses with the resources and tools needed to survive the effects of the pandemic. There are 2 prizes available: The first is a $10k Investment Fund prize that helps with cash flow. The other offers tech assistance and expert advice via the Marketing Services and Tech Makeover prize.
6. Bridge the Gap Fund
The fund offers financial help to Black entrepreneurs impacted by the pandemic and/or destruction from looting. New grants are available in 3-month cycles.
To qualify, you must be a Black entrepreneur operating a business in America that opened no later than Jan. 1, 2020. Plus, you must show proof of financial losses.
Up to 15 eligible applicants will receive a grant per cycle based on their needs and impact.
7. PayPal Empowerment Grant
PayPal’s grant is a joint effort with the Association for Enterprise Opportunity (AEO) to address economic inclusion by giving financial assistance to entrepreneurs in underserved communities.
The program awards up to $10k to over 1k Black-owned businesses impacted by covid and civil unrest. You can qualify for this grant if your Black-owned business has under 10 employees, was founded before March 1, 2019, and earns under $1m in annual revenue.
Stephania Schirru, owner of Dynamically Branded, a boutique PR and marketing firm, received the PayPal Empowerment Grant. Here’s how she invested it:
“I gave my website a face-lift and created a separate customized website for my online marketing course. I acquired access to media databases, which saved so much time when researching media contacts for pitches and submissions.”
She also used the money to run social media ads, give employees a raise, and enroll in an online course for PR pros, which is now the basis for her worker onboarding process.
Although the application process went smoothly, Schirru offers the following advice:
”Have all your paperwork, marketing assets, and tax info readily available. There are so many grants out there, so once a month, I get on Google and research grants I qualify for.”
8. Invoice2Go’s Grow
Invoice2Go announced Grow, a program that offers grants to minority business owners, in 2021. Twenty grantees will receive $15k and access to a diverse community of entrepreneurs for insights and support.
The company also offers various resources, including workshops, certifications, and mini-courses, to assist with productivity and growth.
9. Wish Local Empowerment Program
This program offers micro-grants to Black-owned small businesses. The program is dedicating $2m for roughly 4k Black entrepreneurs.
To qualify, you must have fewer than 20 employees and own a brick-and-mortar store earning less than $1m in annual revenue.
Jumpstart your business
More corporations have started addressing inequities in the workplace. But this isn't lessening the desire for members of minority groups to own their own businesses. Financial freedom, lifestyle choices, and work-life balance often drive minorities toward entrepreneurship.
With access to free money, mentorship, and other resources, now is as good of a time as any to give your dreams a shot.
If you’re a minority looking to start a business, then let 2022 be the year you make it happen.
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