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NGExpert financial copywriter
Page written by Chris Godfrey. Last reviewed on October 8, 2024. Next review due October 1, 2025.
Not all applicants are equal when it comes to commercial finance. Minorities often face unconscious bias, racism, sexism and other unique challenges when applying for a business loan. Refusal is a common result.
Business grants are an alternative to this problem. They can provide crucial funding for minorities seeking to advance their career, launch a startup, or grow their current business. Although business grants for minorities are typically difficult to secure and come with strict qualifying rules, they have major benefits that are very hard to beat: Grants are free money. You don’t have to repay the funds. There’s no interest to pay. No debt to carry.
Minorities include African Americans, Asian Americans, Hasidic Jews, Hispanic Americans, Native Americans, and Pacific Islanders. However, within the scope of business finance, minorities can also include other groups that have historically lacked access to business capital. This includes women, seniors, ex-convicts, veterans, and LGBTQ+ persons.
There are many types of business grants for minorities. Award sums, qualifying criteria and selection committee objectives vary from source to source.
The Wish Local Empowerment Grant offers funding from $500 to $2,000 to help Black-owned US businesses grow. Applicants must be 18+ years of age and operate a brick-and-mortar store with less than 20 employees. The business must also have annual average revenues of under $1 million. If your business is selected for the program, you must join Wish Local.
The Freed Fellowship offers monthly $500 grants to people of color and female business owners. Applicants also receive two months of free business mentoring in the Freed Studio virtual community and may win an additional $2,500 grant at the end of the year.
Aiming to bridge the financial gap in funding for early-stage Black female entrepreneurs, the HerRise MicroGrant provides a monthly award of $1,000 to businesses that aim to positively impact their community. To qualify, your business must be at least 51% owned by women of color, be based in the US and have revenues of less than $1 million.
The National Association for the Self-Employed (NASE) provides business growth grants of up to $4,000 to members. Since 2006, nearly $1,000,000 has been awarded, with grants used for marketing, advertising, hiring employees, expanding facilities and other specific business needs. All minorities may apply, but you must be a member of NASE to participate. (Membership fees may be applicable).
The Merchant Maverick Opportunity Grants Program provides funding to businesses that experience racial or other barriers to traditional financing. In 2023, two awards of $10,000 each were given to businesses owned by Native Americans.
The Hawaii FoundHer Program accelerates growth for women-founded businesses in Hawaii. The 6 months program is designed for historically overlooked and unsupported AAPI and Native Hawaiian wāhine. Benefits include a $20,000 grant, $4,000 care stipend, weekly educational workshops, national network of business mentors and advisors, and monthly retreats for place-based learning and networking opportunities.
The Black Girl Ventures Pitch Program is an entrepreneurial fund-raising model for Black and brown female business founders. Using a hybrid pitch and crowdfunding system, participants have three minutes to pitch their opportunity to an audience of community and professional investors. The three participants with the most votes win at each event. First prize is $10,000, second prize is $6,000, third prize is $2,000.
To qualify, your business must be at least 51% owned by Black or brown women, have been operating for one year or more and be generating revenues.
Open to food businesses that are at least 51% owned by someone who is either Black, Indigenous, Latinx, LGBTQ+, a military veteran, person with disability or a formerly incarcerated individual, the Feed the Soul’s Restaurant Business Development Grant aims to level the playing field for minority hospitality business owners. Program participants may receive 6 months of consultations and educational training services, a financial stipend, and training to help you process and maintain your business.
Founders First CDC offers a number of regional and national grant programs. Total grant awards vary from $100,000 to $25,000 shared across multiple winners. Participants must identify as one of the following to apply for these programs: Asian, Black or Latinx women, LGBTQ+, military veterans.
Small businesses can apply to win $1,000 in funding from the American Dream Awards. Grants are offered in several categories including job creation, family-owned businesses and startups.
Presented by Small Business Majority and Support Latino Business, the SupportSmallBiz Grant provides up to four winners with $2,500 in business funding. To apply you must have at least one Latino/x founder with a minimum 50% ownership. The business must also have been operating for more than one year and be a US registered for-profit business.
Having financially supported more than 1400 small businesses since the program began, the Coalition to Back Black Businesses provides several grants of $25,000 to Black-owned businesses per year. (There were 14 winners in 2023). The goal of the Enhancement Grant is to solidify the resilience and long-term success of the award-winning businesses and to help strengthen the communities that those businesses serve.
Business loans may provide an alternative source of funding for minorities. Online lenders will typically be the best option for this type of financing, but you may pay higher interest rates and fees than you would with traditional banks. Credit checks are standard with most commercial financing, but depending on the type of loan you choose, you may not need to provide collateral:
The most common type of commercial loan. You receive a single, lump-sum cash injection and then pay it back in regular instalments over a fixed period of up to 25 years. Collateral may be required.
A business loan that functions like a high-value credit card. Borrowers can withdraw as much as they want when they want from a loan facility up to the limit of their borrowing. You only pay interest on the sums you withdraw, not the whole credit line. This can significantly reduce your borrowing costs. Collateral may be required.
Also known as account receivables financing. Borrow against the value of your unpaid invoices. The lender will usually provide up to 95% of the invoice value within a few days or even hours of the bill being raised. Your invoices act as security for the loan, no added collateral required.
Equipment loans use the asset you’re financing as security – no added collateral is required. You use the equipment as you pay for it and the lender maintains a lien on the machinery. Once you pay the loan back, the lender releases the lien, and you own the equipment outright.
Nonprofit and community-based lenders can provide SBA Microloans to business owners who may struggle to secure standard business financing. Available up to $50,000, SBA microloans also come with more relaxed qualifying rules and can usually be secured with FICO scores as low as 500, or even with no credit score at all. Be aware that these type of business loans often require a personal guarantee that makes you personally responsible for the debt.
Working with business finance experts can make all the difference when applying for grant funding. Contact Swoop to discuss your borrowing needs, get help with your application and compare top-quality small business grants and business loans from a choice of providers. Give your business the chance it deserves. Register with Swoop today.
Written by
Chris is a freelance copywriter and content creator. He has been active in the marketing, advertising, and publishing industries for more than twenty-five years. Writing for Wells Fargo Bank, Visa, Experian, Ebay, Flywire, insurers and pension funds, his words have appeared online and in print to inform, entertain and explain the complex world of US consumer and business finance.
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