I got this question today in the bplans.com ask the expert area, and it’s one that I get often enough, so I decided to post my answer on this blog.
Question: Are there funds available for a minority women owned business?
These things change fast, so make sure to update yourself on whatever I answer today. And I’m going to just plain ignore the ambiguity between minority owned, women owned, and minority women owned, which can mean different things to different people.
The good news is that yes, there are some special funding advantages for minority owned businesses, and women-owned businesses, and minority-women-owned business, regardless of how you mess with those definitions.
The bad news is that the idea of “funds available” is generally way less than what a lot of people think. There are some companies that sell lists of funding sources and their advertisements sound like it’s easy, that there is a lot of money available. Sometimes it sounds like you just have to know how to fill in a form, and they send you money. And, just as you were thinking, it is a lot harder than that. And there is a lot less money available than what those list sellers would like you to believe.
Your chances improve the more your business addresses long-term social interests like green technology, or underdeveloped economic areas, or health and welfare, education, and so on. And your chances fall the more you’re just doing business selling something that large charities and government agencies don’t care about, like used cars or hair and nail services, or fried foods.
I think the best place to start looking is with the information made available by the federal Small Business Administration (SBA) at it’s Office of Women’s Business Ownership. The SBA also has a special program for “socially disadvantaged groups” [prepare yourself, because the language of some of this is pretty awkward] including “Black American, Hispanic American, Native American, Asia Pacific American, or Subcontinent Asian American,” or anybody else who can “provide evidence as to how they have been discriminated against.” And there’s a program for businesses that are in “historically underutilized business zones (HUBZones).” Those last two share the same SBA information page.
I also recommend contacting your nearest Small Business Development Center (SBDC). The SBDCs are funded by the SBA, state money, and local colleges. They tend to offer a lot of information at surprisingly economic prices. You can try the bplans.com page for a map with contact information.
Some of the better banks and better Chambers of Commerce also have some information for you. The SBA is a good first stop, and the SBDCs are great, but what you’re dealing with here is a mixed bag of different levels of funding, organizations, and goals. This is definitely not one stop shopping.
Expect a lot more help to be available as low-interest loans, or guaranteed loans, instead of outright grants. Grants are more common for high-level technology or medical breakthroughs than for minority or women ownership, and those that are available will often be very competitive, with only a few of the applicants actually getting awards.
Another thing to be careful with in this area is the problem of grant writing. There’s no question that grants are awarded to the grant applications that seem best, and that professional grant writing is sometimes a good idea. On the other hand, professional grant writing can be very expensive, with no guarantee of results. It’s very much a problem of buyer beware.
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