Over 2.5 million Black-owned businesses operate within the United States. Most of these are small businesses, and up to 75% of them report having a difficult time securing funding or other start-up resources.
Black-owned businesses are often hit hardest during economic downturns, such as the recent COVID-19 pandemic. Resources are available, however, for minority-owned businesses, including Black-owned businesses. While the requirements to qualify as a minority-owned business may vary slightly depending on the program, in general, they include that the business must:
Take a look at this guide to resources for helping Black entrepreneurs achieve their goals and establish their businesses on a firm foundation.
Several well-known resources are available to help Black-owned businesses gain the start-up capital they need to get their businesses off the ground. Among the most valuable resources are the following.
Accion Opportunity Fund is a nonprofit lender that provides small business loans ranging from $5,000 to $100,000, with low-interest rates starting at 5.99%. Multiple repayment plans are available, all with no prepayment penalties and transparent terms. Accion Opportunity Fund also provides business coaching and educational resources to program participants.
The Minority Business Development Agency (MBDA) is a government agency run by the U.S. Department of Commerce. It provides expert advice and advocacy for minority-owned businesses seeking to grow and expand into new markets, including global markets. The agency’s 27 Business Centers help minority business owners secure capital and find strategic partners. In addition, its Enterprising Women of Color program advocates for minority women entrepreneurs and promotes programming to help them advance.
The Small Business Administration seeks to award small, disadvantaged businesses at least 5% of each year’s federal contracting dollars. To this end, it sets aside certain contracts for the SBA’s 8(a) Business Development program. Once a small business is accepted into this program, it can compete for contracts administered by the program. Other available resources include guidance from SBA Business Opportunity Specialists, mentoring and joint venture creation through the Mentor-Protégé Program, business training, executive development, and assistance with management, tech, and marketing issues.
This workshop series is an outreach from the U.S. Black Chambers Community Economic Development Corporation to minority-millennial entrepreneurs who have an emerging business or an innovative business idea. Millennial Entrepreneurs Redefined holds workshops across the country to help Black entrepreneurs develop their idea and pitch it to investors, with $5,000 awards and continued mentoring available.
Backstage Capital invests in businesses led by women, people of color, and LGBTQIA+ founders. The company, which typically provides $25,000 to $100,000 in support, has invested in more than 150 companies. It also provides a variety of non-financial resources to help with cash flow management, fundraising, and valuation, and it connects the businesses it supports with other opportunities.
Harlem Capital is a venture capital firm led by a Black team with the goal of investing in 1,000 minority-owned start-ups over the next 20 years. To date, 91% of its funded entrepreneurs are diverse, with almost $200 million in venture capital funding raised. While Harlem Capital primarily invests in tech enterprises, it is branching into non-tech and real estate investments, as well. Its strategy is to fund seed-stage development, investing $1 to $1.5 million for equity stakes of 10% to 12%.
This investment fund, which was originally an offshoot of the Stanford Black Alumni Summit, was formed to connect Black angel investors with Black entrepreneurs in the tech fields. The boutique fund invests early in high-growth tech start-ups. Black Angel Tech Fund provides mentorship and growth opportunities through its international support network.
A variety of grants, fellowships, and scholarships are available to help Black entrepreneurs and small businesses move forward.
While applicants for business development grants from the National Association for the Self-Employed (NASE) don’t have to be Black or a minority, this organization has funded its members with $1 million in grants over the past 15 years. Small business owners and self-employed entrepreneurs who are members of the organization can apply for $4,000 in Growth Grants, which can be used for hiring, marketing and advertising, or expanding facilities.
The MBDA, discussed above, helps minority-owned businesses secure more than $1.5 billion in capital each year by connecting businesses to investors, banks, and mutual funds seeking to invest. In addition, the MBDA provides direct grants through the following programs:
Founded in 2020 to help Black-owned small businesses recover from the pandemic, the Coalition to Back Black Businesses has a goal of providing $10 million in grants to Black-owned businesses by 2023. Each fall from 2020 to 2023, the Coalition will grant $5,000 to 280 Black-owned businesses that are located in economically vulnerable communities and that were impacted by the pandemic. The Coalition, which is a partnership of American Express, the U.S. Chamber of Commerce Foundation, the National Black Chamber of Commerce, the National Business League, the U.S. Black Chambers, and Walker’s Legacy, will also offer mentorship opportunities and other resources.
Sometimes Black entrepreneurs can also benefit from training and other informational resources. Here are a few organizations that provide that kind of support.
As an offshoot of Operation HOPE, the Small Business Empowerment Program helps entrepreneurs in underserved communities get the training they need to get their start-ups off the ground, offering two Entrepreneurship Training Programs. Both its eight-week and 12-week programs include personal development, training in business basics, financial counseling, and access to professional services. The 12-week program also connects budding minority entrepreneurs to a network and other resources.
The National Black Chamber of Commerce is a nonprofit organization dedicated to empowering Black communities and businesses through entrepreneurship. The organization provides small business resources to its 100,000 members, builds networks among Black business owners, promotes Black international trade, and consults with government entities regarding diversity on various projects.
The U.S. Black Chambers (USBC) works with Black chambers of commerce and other business-related organizations across the U.S. to advocate for Black businesses. It offers educational webinars and podcasts about various business topics, provides entrepreneur training, and connects Black entrepreneurs to sources of capital.
The NAACP, well-known for its decades of work on civil rights, also promotes education by prioritizing career and college readiness for students. It provides resources on asset building and financial planning, among other economic initiatives, through its Economic Department, and it partners with a number of other nonprofits and government agencies to bring financial education and services to Black communities.
Small businesses thrive when they can connect with a larger network that provides resources, opportunities for growth, and synergy. Take a look at some of the organizations devoted to providing connection and networking in the Black business community.
Many consumers want to patronize Black-owned businesses, but they may not always be sure how to find them. Support Black Owned seeks to answer that need by developing a directory of Black-owned businesses across the U.S. Businesses may only be listed if they’re at least 50% Black-owned. While listing is free, premium services are available for a price to better promote and advertise Black-owned businesses. Directories are searchable by the type of business or by the state in which businesses are located.
Hosted and funded by the MBDA, Capital Pathways is an organization that hosts workshops for minority entrepreneurs to access training and development in 10 cities across the U.S. It seeks to connect minority business owners to one another. Workshop subjects include credit counseling, entrepreneurship, business lending, and more. Capital Pathways also connects minority entrepreneurs to lenders, investors, and contractors to help them fund and expand their businesses.
The National Minority Supplier Development Council (NMSDC) is a membership organization that connects minority-owned businesses to other companies that want to purchase their products and services, including colleges and universities, health care companies, and thousands of privately owned companies. Its Business Consortium Fund offers financing and business advice. The NMSDC’s goal is to increase business opportunities for minority-owned businesses, in part by helping them integrate into public- and private-sector supply chains.
The National Black MBA Association (NBMBAA) is a nonprofit that nurtures Black business people coming into the business world, providing coaching and mentoring to 20,000 members across 40 local chapters in the U.S. Chapters hold networking events and other programs to boost members’ careers. Leadership and professional development programs include webinars, business case competitions, conferences, and pitch challenges. In addition, the association hosts a knowledge center for Black professionals.
Specialized resources are also available for Black women entrepreneurs. Take a look at a couple of organizations devoted to advocating for and connecting Black business women.
Black Women Connect is an online community for business-oriented Black women. The organization provides forums for Black female entrepreneurs to connect and network as they start and build their businesses. The organization advertises events of interest to its population, and it provides social network connectivity on a variety of topics.
Black Women Enterprises (BWE) is a New York-based organization that serves Black women business owners, seeking to remove barriers that stand in the way of their success. The organization is a clearinghouse for information, and it hosts meetings, networking events, and workshops to help educate and advance the careers of Black women. Among the programs that BWE sponsors are Business Plan Workshops to help women create complete business plans, certification technical assistance for enterprises that need to apply for New York City or state certification, procurement workshops for companies wanting to do business with the U.S. government, and an entrepreneurial workshop series. In addition, the organization provides one-on-one business counseling.
These are just a fraction of the many ways that Black business owners can connect with business resources. In addition to these general groups, you can find groups for start-ups in specific industries, such as tech, as well as organizations focused on different age groups. If you have your business 8(a)-certified with the SBA, you can access even more resources.
Seek out the organizations that best meet your needs. Connecting with other Black business owners locally and across the country can help you support one another and promote your business.
Small businesses can qualify for the SBA’s 8(a) certification if they:rnrn*Haven’t participated in the 8(a) program previouslyrn*Are 51% owned and controlled by U.S. citizens who are economically and socially disadvantagedrn*Have less than $6 million in assets, an adjusted gross income of $350,000 or less, and a personal net worth of $750,000 or lessrn*Have demonstrated good character as well as the potential to perform on contractsrn
Federal assistance is available to minority businesses from several agencies. The Small Business Administration connects minority-owned small businesses with federal contracts through its 8(a) certification program and also provides other resources. MBDA, which is part of the Department of Commerce, helps connect minority businesses to capital. Additional federal financial assistance and grants are available through the Department of Agriculture, the EPA, the Department of the Interior, and NASA.rn
Several types of certifications are available, including certifications from the SBA and the NMSDC. In addition, some states and cities offer minority business certification. Each agency has its own qualification requirements and certification steps. Check with the agency providing the certification you’re interested in for details.rn
One of the best ways to support Black-owned businesses is to patronize them. You can also promote them through word of mouth and social media and write reviews online. Those in a position to offer mentorship or funding can be of great value to Black-owned businesses. It’s also possible to customize your Google searches to highlight Black-owned businesses, so you can make sure to buy from them whenever possible.rn
Disclaimer: The content on this page is for informational purposes only, and does not constitute legal, tax, or accounting advice. If you have specific questions about any of these topics, seek the counsel of a licensed professional.
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