Funding for Black-Owned Businesses
Every company has the need for funds. There are many investment opportunities available for African American entrepreneurs. Money exists; all you have to do is look for it.
Small Business Funding for Entrepreneurs of Color
The Lemon-AID Foundation
Via grants and equity contributions, the Lemon-AID foundation assists underserved neighborhoods and small businesses. This fund also plans to make donations to other charities with related aims and missions. When applying for Lemon-AID, entrepreneurs are expected to know their company inside and out and be prepared to share statistics and demonstrate why their business deserves a grant.
Apply now: marcuslemonis.com/lemon-aid-foundation
National Black MBA Association Scale-Up Pitch Challenge
The National Black MBA Association Scale-Up Pitch Challenge is designed to assist new entrepreneurs with an African American founder who has equal ownership. $50,000 is the grand prize, $10,000 is the second prize, $1,500 is the third prize, and $1,000 is the people’s choice prize.
Apply now: nbmbaa.org/scale-up-pitch-challenge
Union Bank
With Union Bank, you can get a fixed-rate, unsecured or secured term loan with terms up to 7 years for UCC- and equipment-secured loans. Owner-occupied commercial real estate lending is available from Union Bank for up to 25 years. Annual renewal is required for variable-rate, unsecured, and secured business credit lines. Union Bank is one of the few banks in the nation with a special purpose credit program approved under the Equal Credit Opportunity Act. Their Business Diversity lending program aims to support women, minorities, and veterans-owned companies. Union Bank will also help you obtain certification. Government or big corporate contracts may be available if you are certified as a Woman Business Enterprise (WBE), Veteran Business Enterprise (VBE), or Minority Business Enterprise (MBE). You can apply for WBE or MBE credential with Union Bank if the business is privately held and at least 51 percent owned by a woman, veteran, or minority who is a U.S. citizen or legal resident.
Apply now: unionbank.com/business/lending/diversity-lending
Accion
Accion has a microlending platform aimed at low- to moderate-income business owners who are having difficulty obtaining funding through conventional networks. Small business loans ranging from $300,000 to $1,000,000 are available to members. Pre-existing companies and startups are eligible for Accion’s sponsorship. You may use the loan money for a variety of purposes, including inventory purchases, equipment purchases or leases, professional costs, staff recruiting, and all other expenses associated with becoming an entrepreneur. You must not be more than 30 days late on any company bills, deposits, credit cards, or other payments to apply for a loan. The gross balance must be less than $3,000 if you are late on payments. You cannot have any interest rate changes due within the loan’s term, filed bankruptcy during the last 12 months, have some late rent or mortgage payments during the last 12 months, or have foreclosed your business during the last 24 months. Startups must have less than $3,000 in past-due debt, present two most recent pay stubs, have a business plan with a 12 month cash flow projection, and have a partner referral, such as SCORE or SBDC.
Apply now: accion.org
National Minority Supplier Development Council
This council is a non-profit corporation with a board that assists minority-owned companies. The Company Consortium Fund is a grant program run by the NMSDC that supports accredited minority-owned businesses.
Apply now: bcfcapital.com/borrowers
Backstage Capital
Backstage Capital is a venture capital firm that focuses on investing in women, people of color, and LGBTQ people. Entrepreneur Investment applications are reviewed on a rotating basis at Backstage Capital. They have put money into over 150 startups led by underrepresented entrepreneurs.
Apply now: http://backstaecapital.com/apply/
The Foundation for Business Equity
The Business Equity Initiative of this agency assists and funds Black and Latino business owners. They provided an emergency fund to Black and Latino companies in Massachusetts after the COVID-19 pandemic and existing economic conditions. This company frequently collaborates with business associates on loan deferrals.
Apply now: fbequity.org
Rural Business Development Grants
Small companies may apply for Rural Business Development Grants. Small rural companies may qualify for technical assistance training as well as grants under this program, which is available to federally recognized tribes. Smaller requests would be given precedence.
Opportunity awards are allocated to 10% of the overall annual budget for the Rural Business Development Grant.
Apply now: rd.usda.gov/programs-services/rural-business-development-grants
The Local Initiatives Support Corporation (ILSC)
This is a non-profit corporation whose activities seek to revitalize underserved neighborhoods. Via its Small Business Relief grant scheme, they help African American and minority-owned entrepreneurs all over the country. They also provide state-specific mentorship and training programs for small businesses.
Apply now:
SBA Community Advantage Loans
Small business owners who don’t qualify for conventional lending should apply for SBA Community Advantage Loans. The company would operate in a market that is underserved. Local mission-based lenders, such as non-profit organizations, are encouraged to make loans of up to $250,000. The SBA will guarantee up to 85 percent of the loan, and the interest rate will be prime plus 6%. This is a good option for minority entrepreneurs who need a large amount of capital.
Apply now: sba.gov/funding-programs/loans
Government Grants
Community Connect Grants
This Department of Agriculture grant is used to support entrepreneurs living in or running enterprises in remote areas that do not have internet broadband speeds of 10 Mbps or higher.
Apply now: rd.usda.gov/programs-services/community-connect-grants
Kiva
Kiva’s goal is to provide venture resources to underserved populations, not just immigrant entrepreneurs. The loans are crowdfunded in $25 installments. These loans are available for up to $10,000 at 0% interest. Borrowers may sell their products or services to more than 1.6 million lenders all around the world.
Apply now: https://www.kiva.org/borrow
NIH Small Business Innovation Research (SBIR)
The SBIR is a federal program related to the Small Business Technology Transfer (SBTR). One of the goals of the SBIR and STTR initiatives is to encourage socially and economically marginalized and women-owned small enterprises to innovate and develop.
Eleven qualifying government departments shall set aside a portion of their budgets so that domestic firms can conduct R&D with a high potential for commercialization. Participating government agencies include: Agriculture Department; The Commerce Department’s National Institute of Standards & Technology; Defense Department; Education Department; Department of Health and Human Services; Homeland Security; Transportation Department; Environmental Protection Agency; NASA; and the National Science Foundation.
Apply now: https://sbir.nih.gov/
Recap
African American entrepreneurs may have difficulty obtaining support for their business. Banks are less likely to lend to unknown businesses, but there are grants and loans available for entrepreneurs of color; you just need to know where to search.
