Grants for minorities can provide business or organizational funding from governments, nonprofits, and other organizations that won’t require repayment—a great alternative to borrowing. Funding from grants helps businesses reduce reliance on loans or other funding like venture capital—exactly the sort of things small businesses just getting started or going through a rough patch won’t typically have access to.
Federal Reserve data shows minority businesses have significantly less access to funding from most traditional sources, with much higher rates of denial for credit cards or bank loans despite high rates of application. Other minority-owned firms are more likely to anticipate rejection and not apply at all. Since minority-owned businesses may face discrimination while trying to secure capital through traditional borrowing routes, meaning dedicated grants for minorities can be a great funding alternative.
Grants are often called “free money” but they don’t come free: Significant time and effort goes into applying for, writing, and complying with the requirements of a grant. Because grant applications are so time-consuming, businesses often hire professional grant writers to oversee or complete the process. To help out with the work required, we chose the best grants for minorities based on the size of the award, application, mission, and more. This comprehensive list will help entrepreneurs find the best minority grants for a variety of business and organization types.
The Best Grants For Minorities for 2021
- Best Grant Aggregator: Grants.gov
- Best Grant For Rural Areas: USDA Rural Business Enterprise Grant Program
- Best Company Sponsored Grant: The Verizon Small Business Recovery Fund
- Best For Educational Programs: United Negro College Fund
- Best Government Grant: SBA 8(a) Business Development Program
- Best Startup Grant: National Black MBA Association Scale-Up Pitch Challenge
- Best Arts Grant: The South Asian Arts Resiliency Fund
- Best Self-Employed Grant: National Association for the Self-Employed
- Best Grant Alternative: Minority Business Development Agency Business Centers
Best Grant Aggregator : Grants.gov
We chose Grants.gov as the best overall because of the scope and breadth of grants compiled and available for application. Minority business owners looking for grants who tire of checking each agency’s website will appreciate this government-run, centralized repository of grants and grant-related resources.
Provides a massive repository and system for applying for over a thousand grants
Helps streamline application processes for applicants applying to multiple grants
Reduces the need to spend time verifying awarding-organization legitimacy
Steep learning curve regarding application processes must be overcome
Search tools can be cumbersome or not user-friendly
Eligibility and application requirements vary by grant offering
Grants.gov provides eligibility guidelines, application resources, and relevant deadlines for over 1,000 small business grants from 26 federal grant-awarding agencies, including the U.S. Small Business Administration and the Department of Commerce.
Federal government agencies offering grants, including grants for minorities, will post to this site. Dozens of federal agencies award grants, among them the Department of Agriculture, Department of the Interior, Environmental Protection Agency, and National Aeronautics and Space Administration.
Using search terms like, “minority-owned business” will target the search. Using filters based on the category like, “small business” or other eligibility criteria can also help filter options.
Best Grant For Rural Areas : USDA Rural Business Enterprise Grant Program
We chose the USDA Rural Business Enterprise Grant Program as best for rural areas because there is no maximum grant amount and no cost-sharing requirement.
Wide range of potential award uses
No cost sharing requirement
Wide range of qualifying groups
Only available to organizations in rural areas
Only available to benefit small and emerging businesses
Application process and timeline may vary significantly by state or region
To qualify for the USDA Rural Business Enterprise Grant, applicants will need to have 50 or fewer employees, less than $1 million in revenue, and be located in an eligible rural area. Eligible areas exclude any place within the periphery of an urban area with a population of 50,000 or more.
Grants usually range from $10,000 to $500,000 but have no advertised cap. Priority is given to smaller grant amounts, and awards can be used for a variety of purposes, including training and technical assistance, acquisition or development of land, and long-term business planning. The USDA’s Rural Development’s state offices accept applications once per year.
One reason this grant sits near the top of our list for minorities is its explicit availability to federally recognized tribes as well as a wide array of other organization types. The program also has no cost-sharing requirement, which means that applicants will not be required to front funding to match or partially match funding provided by the grant-awarding organization. Favored applicants are those who likely demonstrate how their projects will create jobs, why the area in which their area needs the economic support, and how their project aligns with local development priorities.
Best Company Sponsored Grant : The Verizon Small Business Recovery Fund
Almost 800 small businesses have received grants from the Verizon Small Business Fund, an organization specifically focused on providing funding to business owners of color, female business owners, and other underrepresented entrepreneurs—which is why it's our choice for the best company-sponsored grant.
Focused groups of eligible applicants reduce competition from non-minority businesses
Specifically targeted toward businesses
Designed to respond to adversity faced as a result of the COVID-19 pandemic
Maximum $10,000 grant
Program funding only extends to $7.5 million (as of March 2021)
Non-profit organizations not eligible
Through the Local Initiatives Support Corporation (LISC), communications giant Verizon has funded the Verizon Small Business Recovery Fund as a response to the COVID-19 pandemic’s adverse effects on small businesses. The fund offers up to $10,000 to successful applicants, prioritizing minority-owned small businesses, female-owned small businesses, and other underrepresented entrepreneurs.
As of March 2021, LISC advertises that 777 small businesses have been awarded up to $10,000 each to help meet payroll, pay rent and address other immediate operational needs. Of those nearly 800 businesses, LISC reports that 90 percent are minority-owned, 64 percent are owned by women and 11 percent are veteran-owned.
Strengthening their support for small businesses, LISC adds that 88 percent of small business grantees operate in underserved communities. Those businesses in more immediate need operating in areas that historically have not had access to inexpensive capital should consider applying for this small business-only grant.
Best For Educational Programs : United Negro College Fund
The United Negro College Fund (UNCF) awards over $100 million a year in scholarships to more than 10,000 students, so we chose it as the best for educational programs.
Also offers scholarships and fellowships in addition to grants
Offers both need-based and merit-based assistance
Focuses on supporting educational programs
Each program has its own eligibility criteria
Many programs require the submission of FAFSA to qualify
Only available to full-time students enrolled in a college or university
Founded in 1944, the UNCF is dedicated solely to the educational advancement of African Americans and is the oldest organization in the U.S. with such a focus. The primary aim of the UNCF is to provide support for African Americans pursuing higher educational goals. The UNCF offers grants, scholarships, and fellowships directly to black college students and provides funding to dozens of historically black colleges and universities.
The UNCF partners with state governments and private industry to administer scholarships and grants for black students with financial needs but also offers access to merit-based scholarships. The UNCF also offers financial aid through memorial funds and endowments established by individuals and trusts with the goal of increasing access to education for under-represented groups.
Best Government Grant : SBA 8(a) Business Development Program
The SBA Business Development Program was chosen as the best government program for minority-owned businesses because it seeks to fulfill the federal government’s goal of ensuring 5 percent of federal contracting dollars go to small, disadvantaged businesses.
Only open to U.S. citizens who are socially and economically disadvantaged
Access to additional resources including mentoring, procurement assistance, and more
Participants can receive sole-source contracts with a $4 million limit for good and services or $6.5 million for manufacturing
Income, net worth, and asset limits for eligibility
Must certify as an 8(a) small business prior to applying for grants
Not open to prior participants in the 8(a) program
Unlike traditional grant programs and awardees on this list, the SBA 8(a) program helps socially or economically disadvantaged small business owners by providing business development assistance, technical guidance and training. The program enables businesses to compete for federal government contracts.
In order to qualify, a small business must be at least 51 percent owned and controlled by a citizen who has been subjected to cultural bias or prejudice and placed at an economic disadvantage because of race or ethnicity. The applicant also must have a personal net worth of $750,000 or less, adjusted gross income of $350,000 or less, and $6 million or less in assets.
Before participating in the program, small businesses must also be certified as an 8(a) small business that requires an application through the SBA. Required documentation varies based on the business structure.
Participants can receive sole-source contracts with a maximum of $4 million for goods and services or $6.5 million for manufacturing. The program is specifically designed to help socially and economically disadvantaged entrepreneurs gain access to government contracts.
Best Startup Grant : National Black MBA Association Scale-Up Pitch Challenge
We chose National Black MBA Scale UP Pitch Competition as the best startup grant because it supports new businesses with at least one founding member who is a person of color.
Maximum $50,000 grant
Opportunity to win a People’s Choice award
People’s choice winner can also be a grant recipient
Only four winners chosen each year
If selected as a finalist, a three-minute pitch must be given in-person (or virtually) in front of a panel of judges
Requires membership in the National Black MBA Association
The National Black MBA Association has recognized scalable startups through its Scale-Up Pitch Challenge since 2017. The competition gives startups a chance to connect with investors and venture capitalists. Four winners are chosen each year with the top prize being $50,000 followed by 2nd prize of $10,000, 3rd prize of $5,000, and a $1,000 People’s Choice Award.
Applicants who are interested can submit their pitch and Powerpoint presentation. Select participants will then be invited to pitch their ideas during a three-minute presentation to a team of expert judges for a chance to win a cash prize.
Though the grant competition feels and is marketed somewhat like a game show, that doesn’t change the fact that funding made available through the National Black MBA Association could be what a small business needs to succeed.
Best Arts Grant : The South Asian Arts Resiliency Fund
We chose the South Asian Arts Resiliency Fund as the best arts grant because as a COVID-19 relief fund focused on the arts, the fund offers direct, impactful funding to an extremely underrepresented group.
Directly funds artists of all types
Extremely targeted grant
New grant program developed in response to COVID-19
Limited to those of South Asian descent
Maximum grant of $2,000
Operated by the India Center Foundation, the South Asian Arts Resiliency Fund is designed to support South Asian arts workers impacted by the COVID-19 pandemic. The fund disburses grants of $1,000 to $2,000 based on financial need to U.S.-based arts workers of South Asian descent. This includes applicants in the performing arts, film, visual arts, and literature with heritage from Afghanistan, Bangladesh, Bhutan, India Maldives, Nepal, Pakistan, and Sri Lanka.
To be eligible for the fund, applicants must be of South Asian descent, work in the arts and demonstrate a loss of income due to COVID-19. Applicants must be at least 21 years old, and not enrolled in a degree program. Grant funding can be put toward any artistic project that can be developed, created, and presented within four to six weeks of receiving funding.
The fund may provide a relatively small grant compared to other organizations on this list, but with its specific targeting, this grant, and others like it, are examples of highly effective funding methodologies. We encourage professional artists who aren’t of South Asian descent to seek out similar programs related to their own heritage that may provide similar grant opportunities.
Best Self-Employed Grant : National Association for the Self-Employed
The National Association for the Self-Employed supports small businesses and has a regular, consistently awarding grant program, which is why we chose it as the best self-employed grant.
Focused on small businesses
$4,000 monthly grant offered
Many benefits offered to members in addition to grants
Grants not available in larger amounts than $4,000
Only one monthly grant winner chosen
Must be a member to apply for grants
In addition to its grant program, NASE helps small businesses by providing daily support, including direct access to experts, benefits, and consolidated buying power that traditionally has been available only to large companies.
They offer $4,000 business grants that can be used to buy computers or farm equipment and hire part-time help or otherwise support business growth. The grants are available to minority businesses as well as to the general public, which may increase competition. Since 2006, NASE has awarded over $1 million in grants to members.
To be eligible, applicants must be a NASE member in good standing, demonstrate business need, provide an explanation on how funds will be utilized and show how the grant will improve business. Grant applications are reviewed quarterly.
In addition to providing grants, the NASE offers many benefits to members including help with taxes, databases, and social media, access to Dell Small Business and ADP Payroll Services, discounts with a number of different companies ranging from LifeLock Identity Protection Services to free and discounted attorney services, travel benefits, and more.
Best Grant Alternative : Minority Business Development Agency Business Centers
The Minority Business Development Agency (MBDA) remains the only federal agency listing “growth of minority-owned businesses” as its sole focus. It does not provide grants directly to businesses but instead funds various Business Centers through its several grantees. Because these centers provide consulting services to minority businesses in need of support resources, we chose it to be the best grant alternative.
Solely focused on minority-owned businesses
Business centers located across the U.S. with in-person resources
Specifically targets minorities by group to provide maximum impact
Range of program offerings at any given time may not target as wide a range of minority groups
Specificity of funding options through its grantees may limit use opportunities
The program’s website lacks clarity and is not user-friendly
The Minority Business Development Agency Business Centers, run by its four grantees, providing business development resources (sometimes including grants) to businesses owned and operated by African Americans, Asia Americans, Hasidic Jews, Hispanic Americans, Native Americans, and Pacific Islanders.
The MBDA funds various types of business centers through its American Indian Alaska Native/Native Hawaiian (AIANNH) grantee, the Entrepreneurship Education for Former Incarcerated Persons grantee, the Global Women of Color Economic Empowerment organization, and the Minority Growth Equity Fund Initiative (The Billion Dollar Fund). Grants must be applied for through Grants.gov, but businesses need to be registered with the MBDA.
The MBDA has 36 business centers located in cities across the U.S. with a focus on locations that have the largest concentration of minority groups and minority-owned businesses. The agency has made a significant effort to increase accessibility to minority groups where those businesses are run. Minority-owned firms can access resources, including business experts, in-person at these centers. For groups whose situations may require in-person assistance or for folks who feel overwhelmed trying to start, we recommend finding a business center and learning more about how the experts there can help.
A wide range of available grants exist for minorities in the U.S. Some grant programs accept applications only once per year or at specific times throughout the year, while others are open to applications on a rolling basis. Similarly, possible grant amounts vary widely among different programs with some offering grants as small as $1,000 and others offering awards into the millions.
While Grants.gov itself isn’t a provider of grants, it is an aggregator of grants available from a variety of sources and hosts an application system. Visiting Grants.gov is likely to be the most efficient way to find available grants, look up eligibility criteria and apply for the grants that best fit any given need.
|Grant||Why We Picked It||Key Benefit|
|Grants.gov||Best Overall||Provides information on grants across multiple grant providers|
|USDA Rural Business Enterprise Grant Program||Best for Rural Areas||A federal agency devoted to providing assistance to rural areas|
|Verizon Small Business Recovery Fund||Best Company-Sponsored Grant||Grants offered in response to the COVID-19 pandemic|
|United Negro College Fund||Best for Educational Programs||Provides need-based financial aid and merit scholarships|
|SBA 8(a) Business Development Program||Best Government Grant||Facilitates the award of federal contracting dollars to small disadvantaged businesses|
|National Black MBA Scale UP Pitch Competition||Best Startup Grant||Awards grants to three winners and offers a People’s Choice Award|
|South Asian Arts Resiliency Fund||Best Arts Grant||Offers awards to artists of different disciplines and backgrounds|
|National Association For The Self-Employed||Best Self-Employed Grant||Provides grants up to $4,000|
|Minority Business Development Agency||Best Grant Alternative||The only federal agency tasked with promoting growth of minority-owned businesses|
What Is a Grant for Minorities?
Grants provide a funding solution for businesses and individuals looking to expand or grow in ways traditional funding options may not support. Grants award recipients with funding or resources to facilitate or incentivize goals that are in the mutual interest of the recipient and the awarding body—usually a government, foundation, or other company.
Small business grants for minorities include a wide set of options designed with minority-owned small business growth and success in mind. From black female entrepreneurs to Hispanic males, there are business grants tailored to specific identity groups as well as grants for more broad representations. These grants usually exist as a means of offsetting minority underrepresentation in business ownership.
Do Grants for Minorities Have to Be Paid Back?
Under most conditions, grants do not have to be paid back and can be used for a wide range of business-related expenses. Many grants do have strings attached, like lock up or vesting periods (essentially waiting periods) that limit the grantee’s ability to take full advantage of the financial reward of a grant. Grants are notorious for requiring lengthy and detailed application processes.
What Are Some Alternatives to Grants for Minorities?
For minorities without the time or resources to devote to seeking out and applying for grants, there are traditional funding avenues like business loans or credit cards available. Unfortunately, minorities in the U.S. often face difficulty receiving approval for homeownership, small business loans, and even credit cards. A breadth of research supports the notion that minority groups face discrimination while attempting to borrow.
In order to combat this inequality, MBDA, listed above as our Best Grant Alternative, has assisted with the creation of minority-oriented business centers that can help minority business owners find guidance on obtaining much-needed capital.
How We Chose the Best Grants for Minorities
We prioritized several considerations in determining the selections. Of primary concern was the size of available awards as well as the diversity and scope of the intended recipients. Another factor considered was the degree to which the grants attempt to promote business across a more level playing field of economic diversity.
Grants that were selected have demonstrated that their recipients have put awards to good use and that their efforts have promoted growth among minority-owned businesses. We also sought out grants and programs that sought to acknowledge a diversity of minority candidates. A variety of walks of life, livelihoods, and ideas are represented by the selected grants.
Important to note is that there are thousands of grants available, many of them specifically targeted toward making an impact in localized communities. While all of the grants above have national competition, minority groups and business owners seeking grants shouldn’t feel discouraged if none of the grant programs listed here seem to be a great match—there is likely a grant out there for everyone.