Free Government Grants For Black Minority Business
Minority business grants fall into two general categories: grants for business development and grants that support specific "projects." Research and development projects and technology transfer projects are examples of the latter. Grants can be awarded to either for-profit or nonprofit business entities.
Grants for Funding Black Minority Businesses
Black minority businesses may qualify for federal grants if engaged in scientific research and development (R&D) under the SBIR (Small Business Innovation Research) and the STTR (Small Business Technology Transfer) programs. These programs must meet federal R&D objectives and have high potential for commercialization. Grant proceeds are subject to specific conditions and stringent reporting requirements. The Grants.gov website provides a list of current grants from the 26 federal grant-making agencies.
A few foundations award small business development grants to both nonprofit and for-profit enterprises. Some organizations are dedicated to minority business development. Most are non-racial. The BusinessGrants.org website provides a current listing of national and local grantors that award grants to both for-profit and nonprofit organizations for business development.Other Funding Options
Numerous alternatives to grant funding are available to minority entrepreneurs from both public and private sector organizations. The Small Business Administration (SBA) is the leading lending source for minority businesses. The sba.gov website provides a wealth of information on starting and managing a business, federal loan and grant programs, federal contracting opportunities, online training programs and local counseling services.
Investor financing involves selling a share (ownership) in the business to investors. Entrepreneurs considering investor financing should expand the pool of potential investors beyond family and friends to include "angel" investors and venture capital firms.
Angel Investors
Angel investors are typically wealthy individuals. They provide a range of valuable services other than cash. Most angels are or have been successful business owners with expertise to share. Moreover, they usually have an extensive network of contacts that can prove quite useful.
The Minority Angel Investor Network (MAIN) is the angel network for minority businesses. MAIN limits its investments to businesses located within four hours drive time from Philadelphia. However, their investment guidelines are similar to those of angel investors in most regions of the country.
Specialized Small Business Investment Companies (SSBICs)
Specialized Small Business Investment Companies (SSBICs) are a type of venture capital firm. They leverage funds borrowed from the SBA to invest only in businesses that are 51-percent owned by socially or economically disadvantaged persons. Additional information on SSBICs and investment guidelines can be found by visiting the National Association of Investment Companies website.
Starting the Process
The process of obtaining a grant or funding from any other source always starts with a winning business plan. The business plan is the calling card that gains access. It is the best way to prove the merit of the business proposition. The plan must be clear, compelling and realistic while showcasing the talent and team that can make a business proposition a reality.
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