Obtaining a Grant for a New Minority Business
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Introduction
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A grant is monetary assistance to an individual, nonprofit or business. The granting entities are usually the government, charitable foundations and corporations. In some instances wealthy individuals bestow grants. Unlike a loan, grants do not have to be paid back.
New minority business grants are designed to encourage minority entrepreneurs to start and expand their businesses. Entrepreneurs have many sources of grant money available to them. The hard part is finding the institutions that have set aside funding to help new minority businesses.
Finding the Grant Money
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While the federal government does not offer small business grants, state governments do offer grants to its residents. The entities offering small business grants are called state development agencies or economic development agencies. The About.com website provides a list of these agencies for all 50 states.
Another good resource is the Catalog of Federal Domestic Assistance (CFDA), which lists thousands of grants available from various government agencies. (See Resources.) You can also learn more about state aid for businesses by visiting the website of the Secretary of State for the state you live in.
To find foundations and corporations that offer small business grants, the Foundation Center is a great resource. The center has a website that is accessible at most public libraries. This database has a detailed search feature that helps you to locate funding sources that help small businesses.
Doing the research to find appropriate grants is very time-consuming. Despite the fact that there are many website touting how easy it is to get business grants, the truth is that locating grants is a lot of hard work. And that is just the first step.
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Obtaining the Grant
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Once you have found state or foundation sources that provide small business grants, you then have to apply for the grants. This process is lengthy and very competitive because there are limited funds. Also, most grants have very specific eligibility requirements. In most cases not only must you be a minority business owner, but you must meet other criteria as well.
Being a minority with a good business idea is not enough. According to Darnell Zahorsky, "Eligibility can be based on location, sales revenue to date, years in business, sex, race and purpose of funding.''
While some grants to start a new business are available, most grants are to expand an existing business. But once you find a grant for a start-up and you meet the eligibility criteria, you then must request the application packet. Once you receive all the information, you must carefully fill out the application and make certain everything is accurate and complete. Some grant applications are automatically denied if information is missing.
Properly filling out the application and following all the instructions is no guarantee that you will be awarded a grant, but it does increase your chances. One grant reviewer at a foundation stated the main reason grants were denied was because the application was not completed properly.
There are other things a business owner can do as well to increase his chances of getting the grant. Have a detailed business plan available that shows you know precisely what your business is about, how it compares to the competition and what your business will do differently to ensure success. A business owner also needs to know exactly how the grant will be used to start the business.
Obtaining a grant for a new minority business is a long shot, but it can be done by finding the right grant for your situation and by submitting a detailed grant application. There are no guarantees, but with perseverance and hard work you may be lucky enough to get a business grant.
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