Minority business ownership is on the rise. According to the U.S. Census Bureau, the number of minority-owned businesses rose 46 percent from 2002 to 2007.
“The data is still being analyzed to identify all the key factors, but as we’ve seen more recent changes in local economies – where in some cases large employers have downsized and in other cases clusters of new industries are growing – more Americans are seeing new opportunities to pursue their dreams and become entrepreneurs,” said Danel Hannaher, regional administrator for the U.S. Small Business Administration.
Part of the reason for the increase might be the expansion of resources available to minority small business owners over the past few decades.
The American Recovery and Reinvestment Act of 2009 , in particular, included a focus on continuing the increase of minority-owned businesses through loan initiatives, nationwide mentoring and procurement assistance.
BusinessNewsDaily has compiled a list of many of the resources dedicated to supporting minority-owned businesses. (The SBA defines a minority-owned small business as one whose sole proprietor is African-American, Hispanic, Asian, Pacific Islander, American Indian or Alaska Native. In cases of multiple owners, 51 percent of the stock interest must be held by members of minorities, and claims or rights must be held by people who belong in the categories outlined above.)
- Minority Business Development Agency (MBDA)
A division of the Department of Commerce, the MBDA is the only federal agency specifically devoted to growing minority businesses in America. It includes 40 resource centers nationwide, staffed by small-business consultants who can aid entrepreneurs in any number of business functions, from writing an initial business plan to securing financing. It also offers online databases where minority business owners can register to receive business leads and submit bids for new opportunities.
• 8(a) Business Development Agency
This SBA initiative is designed to aid “disadvantaged” businesses through mentoring and training and in obtaining potential procurement contracts. To be considered for the 8(a) Business Development Program, a small business must be owned and operated by a “socially and economically disadvantaged individual” who is a U.S. citizen, and it must demonstrate potential for running a successful business.
• HUBZone Program
This geographically driven program aims to ensure that small businesses located in historically disadvantaged areas (which often house minority-owned businesses) are given fair opportunities at federal procurement contract opportunities. Visit the HUBZone map to find out if your business qualifies for this program.
While the government does not directly extend grants to minority businesses, it does offer low-interest loan programs dedicated to aiding minorities in securing essential financing. Two new SBA financing programs, called Small Loan Advantage and Community Advantage, will be launched no later than mid-March. Both offer maximum loan amounts of $250,000.
- Small Loan Advantage
Slated for implementation by March 15, the Small Loan Advantage program is dedicated to supporting underserved communities, and it encourages larger SBA lenders to extend to minority businesses the smaller loan amounts that many need. Electronic applications will be approved within minutes. Paper applications, which are just two pages in length, will be processed in one business day.
- Community Advantage
This pilot program will begin accepting applications by March 15. It is dedicated to increasing the number of SBA lenders that will fund minority-owned small businesses. Such lenders include nontraditional financiers like nonprofit development companies and financial institutions that are focused on community development.
- Acción USA is a micro-lender dedicated to flexible financing options for small businesses that are seeking funding ranging from $500 to $50,000.
To be deemed eligible for minority-business financing assistance from the programs on this list, your business must be located within the respective state. Most provide funding up to $50,000.
- Delaware Access Program
- Illinois Minority, Women, and Disabled Participation Loan Program
- Iowa Target Small Business Assistance Program
- Massachusetts BDC Capital Community Loans
- Mississippi Minority Business Enterprise Loan Program
- New Jersey Urban Plus
- New York State Micro Loans for Minority and Women Owned Businesses
- Ohio Minority Direct Loan Program
- Pennsylvania Minority Business Development Authority
- Tennessee Small and Minority-Owned Business Assistance Program
- Wisconsin Linked Deposit Loan Subsidy
Race- or ethnicity-specific associations
Minority business owners can also benefit from associations that aid entrepreneurs of a stated ethnic background. While the list below is not comprehensive, it provides guidance on what types of associations exist.
- The Indian Loan Guaranty, Insurance, and Interest Subsidy
- Native Hawaiian Revolving Loan Fund
- Montana Indian Equity Fund
- Nebraska: Ho-Chunk Community Development Corporation Small Business Loans
- United States Hispanic Chamber of Commerce
- U.S. Pan Asian American Chamber of Commerce
- National Black Chamber of Commerce
- National Minority Business Council
Like minority-owned business financing programs that are offered by individual states for their own residents, there are many state-specific associations dedicated to providing educational resources, guidance, mentoring and business support to minority-owned businesses. States with such programs include Alabama, Arizona, California, Florida, Georgia, Hawaii, Illinois, Michigan, Minnesota, New Mexico, New York, North Carolina, Ohio, Oklahoma, South Carolina, Texas, Washington and Wisconsin. Support is also available within Washington, D.C.
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