Federal Grants for Minority Small Business
The Federal government creates initiatives to assist and promote minority business development through funding of programs through agencies such as, the U.S. Small Business Development Administration and the Office of Minority Business Development. Minority businesses do not receive direct funding from the Federal government but can take advantage of programs created by grant funding through government business initiatives.
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Minority Small Business Designation
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The U.S. Small Business Administration, through a survey provided by the Survey of Small Business Owners, classifies minority-owned businesses as entities in which a minority owns 51 percent or more of stock and equity in a business. There are six demographic groups classified in the survey: Hispanic, Black, White, Native American, American Indian or Alaskan Native, Asian, Native Hawaiian or other Pacific Islander.
Funding Minority Business Development Centers
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Federal grant funds are used to help develop minority business centers. These centers assist minority start-up businesses and firms with business development services such as marketplace entry, startups, or expansion of business plans. A small fee is paid by the client for these services and grant funding from the Office of Minority Business Development offsets other program costs.
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Assistance Through the National Minority Supplier Development Council
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The National Minority Supplier Development Council (NMSDC) also receives Federal grants to operate a program that assists minority businesses with business certification and in getting corporate and government procurement contracts from corporations that have established relationships with the NMSDC. An annual membership fee is charged to the minority business firm for access to counseling and services. At this time, there are council branches in all 50 states.
SBA Role in Minority Business Development
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The U.S. Small Business Administration uses Federal grant money to fund business development type nonprofit organizations and intermediary lending institutions. These institutions, working with local state and government resources provide and create technical training, business assistance and microloan programs to minority businesses.
Misconceptions About Minority Business grants
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There are companies that promise free direct grant money from the government. Some of these agencies advertise through radio and television. To put it simply, there is no such thing as free money for minority businesses from the federal government. The federal government's role is to provide funding to develop programs for technical assistance, training and procurement opportunities.
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- Photo Credit Image by Flickr.com, courtesy of Robert Sanzalone
