Starting your own business can be costly. Financial barriers can be higher for women and minorities. Research from the Small Business Administration (SBA) finds that women and minority business owners are still less likely to get approved for loans. Fortunately, there are business financing options available specifically for women and minorities.
Government agencies and big businesses often have targets or financial goals for partnering with women and minority-owned companies. Federal, state, and private organizations fill this need by offering business loans and grants dedicated to minority and women business owners. While some financing options have very strict requirements, the result can really boost your small business.
How to Start a Minority Woman-Owned Business: Grants
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When seeking grants for your minority, woman-owned business, expect strict eligibility criteria and a lengthy application process. Competition for grants is high, but finding the right match significantly increases your chances of securing funding.
Available grants range from general interest to highly focused. You can find grants for ethnic groups like the Jeanne Meurer Indigenous Women’s Fund, grants for rural businesses such as the USDA Rural Business Development grants, or even cause-related grants such as the EDA’s Assistance to Coal Communities for businesses serving communities affected by the coal industry’s decline. Search for additional grants through resources and databases such as USA.gov.
How to Apply for Women and Minority Grants
Starting a minority, woman-owned business starts with applying for your grants. While some grants are open to all businesses, many women- and minority-specific grants require certifications to prove your business is owned by women or minorities. Certification as a Woman-owned Business Enterprise (WBE), Minority-owned Business Enterprise (MBE), or both can give your business greater visibility, increased opportunities to work with large corporations or government agencies, and an extensive network.
Strategies to Getting a Minority Woman-Owned Business Started
To become certified, you’ll need to apply with the Women’s Business Enterprise National Council (WBENC) or the National Minority Supplier Development Council (NMSDC). Both organizations have regional affiliates who will handle your application. To find your local certifying agency, visit the Minority and Women Business Enterprises directory. Keep in mind that the expected processing time is up to 90 days after all documentation is received by the NMSDC or WBENC.
How to Start a Minority Woman-Owned Business: Programs & Certifications
Before you begin the MBE or WBE certification process, you need to decide between federal or regional levels. Your choice depends on your target market. If you plan to work with large corporations, apply for national certification. To focus on government agencies, apply for regional certification. If you qualify, you are also welcome to apply to become both MBE and WBE certified at either the regional or federal level.
How to Start a Minority Woman-Owned Business: Requirements
Both certifying organizations require an online application, notarized sworn affidavit, non-refundable application processing fee, and various documents. Once your materials are submitted, you will be asked to host an on-site visit and/or interview to verify your business details and minority status, if applicable. There are no business size or length-of-time in business requirements.
One of the first items you’ll need to provide is proof that your business is either minority- or woman-owned. The NMSDC defines a minority-owned business as at least 51 percent owned by an individual who is at least one-quarter Asian-Indian, Asian-Pacific, Black, Hispanic, or Native American. Similarly, the WBENC defines a woman-owned business as at least 51 percent owned, operated, or controlled by one or more women. If your business is public, it must be a woman or minority that owns at least 51 percent of the company’s equity. Documents you can provide for WBE eligibility include a birth certificate, passport, or driver’s license. The NMSDC determines MBE eligibility through a combination of interviews, visits, and screenings.
How to Start a Minority Woman-Owned Business: Documents
You’ll begin by submitting your documents online but may later be asked to provide physical copies. Be prepared to submit a wide range of documents regarding your business structure and financial history. Required information varies by business structure, but may include:
- History of the business,
- Business or professional licenses (if applicable),
- Corporate articles and bylaws,
- Proof of insurance, and
- Tax returns.
How to Start a Minority Woman-Owned Business: Certifications
If your application is approved, you’ll receive an email notification and access to your certificate online. Certification is valid for one year and you must apply to retain certification. The WBENC and NMSDC recommend submitting your application to be recertified 90 days before the expiration of your current WBE or MBE certification. Recertification is a simpler process requiring only updated financial statements and documentation of any changes to your business.
Next steps for starting a Minority Women-Owned Business
Becoming WBE or MBE certified can increase your visibility and help get your foot in the door to better business financing and set the stage for rapid growth. Major corporations recognize the value in working with diverse businesses and several are looking for businesses like yours.
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