Grants for minority owned businesses in 2026

Finding funding as a minority business owner can be tricky. Banks want perfect credit, and  traditional lenders want years of revenue history. But that's where grants for minority owned businesses come in—free money you never have to pay back.

Unlike loans, grants don't require perfect credit scores or piles of collateral. Many don't even require official minority business certification. 

In this guide, we walk you through the process of how to get a grant for your minority owned business. And if grants don't work out—or you need money faster—small business loans can fill the gap.

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TL;DR: How to get grants for a minority owned business

To get grants for a minority owned business:

• Apply directly to state, private, and federal grant programs
• You don't need perfect credit or official certification—just proof you own 51% of the business
• Start with state and local grants first (less competition, faster approval)
• If grants don't work out or you need money quickly, minority business loans can fill the gap

What counts as a minority owned business?

A minority owned business means that one or more minority individuals own at least 51% of the company and actively control its day-to-day operations. You can't just be a silent investor—you need to run the business.

Most grant programs recognize these groups as minorities:

• Black or African American
• Hispanic or Latino
• Asian
• Native American or Alaska Native
• Native Hawaiian or Pacific Islander

Your business structure doesn't matter—LLCs, corporations, sole proprietors, and partnerships all qualify.

Do you need certification to get minority business grants?

Not always. Many private grants and corporate programs don't require official certification—they just need proof that you meet the ownership requirements.

Certification helps when you're going after larger grants or government contracts. Programs like the SBA 8(a) Business Development Program, Minority Business Enterprise (MBE) certification through NMSDC, or Women's Business Enterprise (WBE) certification through WBENC can open doors to bigger opportunities.

For most small business grants, you can skip certification and apply directly. If you want certification, start with your local Small Business Development Center (SBDC).

Grants for minority owned businesses (free funding you don't repay)

Grants are the holy grail of business funding because you never have to pay them back. No interest rates. No monthly payments. The catch? Competition is fierce. That's why applying to multiple grants at once is your best strategy.

Where to start: which grants to apply for first

Don't waste time applying randomly. Here's your strategic game plan:

1. State and local grants (start here)

• Less competition than federal grants
• Approval happens in weeks, not months
• You're competing against dozens of businesses instead of thousands

2. Private and corporate grants (apply next)

• Major companies run annual diversity programs with rolling deadlines
• Grants range from $5,000 to $50,000
• Many don't require certification

3. Federal grants (save for last)

• Longest application process and lowest approval rates
• Best for tech or research businesses with specialized needs

Apply to 2-3 grants in each category simultaneously. Expect rejections. Keep applying.

State and local grants for minority owned businesses

State and local grants are your best shot at funding because you're competing in a smaller pool. Instead of going up against every minority business in the country, you're only competing with businesses in your city or state.

Most state grants range from $5,000 to $50,000. That might not sound like much compared to federal programs, but the approval process takes weeks instead of months, and you don't need a grant-writing consultant to win.

Start with your state's economic development office. Every state runs programs specifically for minority entrepreneurs. Search "[your state] minority business grants" or visit your state's .gov website. You'll find programs for specific industries, underserved areas, or businesses that create local jobs.

Your local Small Business Development Center (SBDC) is another goldmine. These centers know about city and county grants that never get advertised nationally. Walk in, tell them you're looking for grants, and they'll give you a list of programs you never knew existed.

Private and corporate minority business grants

Major corporations run diversity grant programs every year with awards ranging from $10,000 to $50,000. Most don't require minority business certification—just proof that you meet the ownership requirements.

Where to look for corporate grants:

• Companies in your industry (food service companies for restaurants, suppliers for retail)
• Businesses you already buy from (many offer grants to their supply chain)
• Community foundations and chambers of commerce
• Industry associations in your field
• Annual grant contests from FedEx, Visa, and similar companies

Look for grants from companies in your industry first. If you run a restaurant, check food service companies. Retail business? Look at suppliers you already buy from.

Federal grants for minority owned businesses

Federal grants have the longest application process and toughest competition. You're competing against thousands of businesses, and applications can take 6-12 months from start to finish.

Key federal grant resources:

• Grants.gov - Create an account and search using filters like "small business," "minority," and your industry. Set up email alerts for new grants.
• MBDA Business Centers - Help minority entrepreneurs access capital and navigate applications. Be aware that MBDA funding and availability varies by location due to funding cuts from the federal government. Check if your local center is still operational before visiting.

Note: The SBIR/STTR programs for tech and research businesses expired in October 2025 and are awaiting Congressional reauthorization. Check SBIR.gov for updates on when applications will reopen.

Important: What the SBA actually offers (it's not grants)

The Small Business Administration (SBA) does not provide grants to start or expand businesses. Let's clear this up:

What the SBA actually does:

• Guarantees loans made by banks (you still repay with interest)
• Runs the 8(a) program to help minority businesses access government contracts
• Provides resources, counseling, and loan guarantees

What the SBA doesn't do:

• Give out free grant money for starting businesses
• Offer the "$10,000 grant" (that was a COVID-19 emergency program that ended)

People confuse this because of disaster relief programs like the EIDL Advance during COVID-19. Those were one-time emergency programs. If someone tells you the SBA has a grant for your business, they're confused or trying to scam you.

Minority business grants by industry

Some industries have specialized grant programs worth exploring:

Restaurants and food service: Check the National Restaurant Association, state restaurant associations, and food suppliers for grants focused on sustainability or underserved communities.

Retail and e-commerce: Look for programs from Shopify, Amazon, and retail trade associations in your state.

Construction and trades: Find grants through construction associations and government programs that promote diversity in public projects.

Healthcare and wellness: Access grants from health foundations, state health departments, and medical associations focused on increasing diversity in healthcare.

Technology and innovation: Tech businesses have the most grant options through SBIR/STTR programs, tech accelerators, and venture funds focused on diverse founders.

How to apply for minority business grants

Most grant applications ask for the same basic information. Get these documents ready now so you're not scrambling when deadlines hit.

How to get free grant money (without scams)

Real grants never charge upfront fees. If someone asks you to pay money to apply for a grant or to "unlock" your grant funding, walk away.

Red flags that scream scam:

• "Guaranteed grants" or promises you'll definitely get funding
• Requests for credit card information or bank account details upfront
• Vague eligibility requirements where somehow everyone qualifies
• Pressure to apply immediately or risk losing the opportunity
• Requests to pay "processing fees" or "administrative costs"

Legitimate grant programs come from government agencies, established corporations, or nonprofit organizations. Before you apply, verify the organization exists. Check their website ends in .gov for government programs. Look up corporate grants on the company's official website.

Verify any grant program through Grants.gov, your local SBDC, or the Minority Business Development Agency.

What you'll need to apply for minority business grants

Most grant applications ask for similar documents. Get these ready now:

Required documents for most grants:

• Employer Identification Number (EIN) - Get it free from the IRS website in about 10 minutes
• Business bank account - Grant programs won't deposit money into personal accounts
• Use-of-funds explanation - Clear statement of what you'll buy and why it matters

Example of a good use-of-funds statement: "I'll use $10,000 to purchase a commercial oven so I can increase production and take on larger catering orders."

Example of a weak statement: "I'll use the money to grow my business."

Larger grants might ask for a business plan or financial projections. They want to see you've thought through your business model and have realistic expectations. Some grants require minority business certification, but most don't—check the requirements before you start.

Once you have your documents organized, Homebase can help you manage what comes next. Fast-track your hiring, manage your team's hours, and keep payroll organized in one place—so when grant funding hits your account, you're ready to put it to work.

Tips to improve your chances of getting approved

1. Apply early. Many grants operate on a first-come, first-served basis. Funding runs out before the deadline.

2. Keep answers short and specific. Grant reviewers read hundreds of applications. Answer questions directly in 2-3 sentences, then move on.

3. Apply to multiple grants at once. If you apply to 10 grants, you might win 1-2. The businesses that get funded keep applying despite rejections.

4. Follow instructions exactly. Missing a required document means automatic rejection. Read the requirements twice before submitting.

5. Show community impact, not just business growth. Explain how your business creates jobs, serves underserved communities, or solves local problems. Grant programs want to fund businesses that help their neighborhoods.

Minority business loans (when grants aren't enough)

Grants aren't always realistic. If you need money quickly, need more than $50,000, or can't wait months for approval, loans for minority owned businesses make more sense..

SBA loans for minority owned businesses

The Small Business Administration guarantees loans made by banks and credit unions. That guarantee makes lenders more willing to work with businesses that might not qualify for traditional bank loans.

Three main SBA loan types:

• 7(a) loans - General business purposes, up to $5 million
• 504 loans - Buying real estate or equipment, up to $5.5 million
• Microloans - Smaller amounts, up to $50,000

What you'll need:

• Decent credit (usually 640 or higher)
• Documentation of your revenue and expenses
• Clear explanation of how you'll use the loan
• 30-90 days for approval

Apply through an SBA-approved lender, not the SBA directly. Use the SBA's lender search tool to find banks in your area. For more guidance, check out our complete guide on how to get a loan to start a business.

Minority business loans with bad credit

Bad credit doesn't disqualify you from every loan program. Your options are more limited, and you'll pay higher interest rates, but funding exists.

Microloans from community lenders specialize in working with businesses that can't qualify for bank loans. These programs lend $500 to $50,000 with interest rates from 8% to 13%.

Community Development Financial Institutions (CDFIs) serve underserved communities and minority business owners. They offer more flexible approval requirements than banks and provide business counseling along with the loan. Find a CDFI through the CDFI Fund's website.

Be realistic. Bad credit means smaller loan amounts and higher interest rates. Use this as an opportunity to rebuild your credit. Make every payment on time, and in a year or two, you'll qualify for better terms.

Grants vs loans: which is better for minority owned businesses?

Grants and loans serve different purposes. Understanding when to use each one helps you make smarter funding decisions.

Grants: Free money you never repay

• Repayment: Never repaid
• Approval time: 2-12 months
• Credit requirements: Usually none
• Typical amounts: $5,000-$50,000
• Competition: Very high
• Best for: Starting out, small capital needs, poor credit

Loans: Borrowed money with interest

• Repayment: Must be repaid with interest
• Approval time: 2-8 weeks
• Credit requirements: Good to excellent credit
• Typical amounts: $500-$5,000,000
• Competition: Moderate
• Best for: Urgent funding, larger amounts, established businesses

Choose grants when:

• You're just starting and don't want debt
• You need smaller amounts (under $50,000)
• Your credit isn't great
• You can wait months for approval
• You're willing to apply to multiple programs

Choose loans when:

• You need money quickly (within weeks)
• You need larger amounts for equipment, real estate, or expansion
• You have established revenue to cover monthly payments
• Your credit is solid enough to qualify

You don't have to pick just one. Many successful minority business owners pursue grants and loans simultaneously. Apply for grants in the background while you explore loan options for immediate needs.

Finding the right funding for your minority owned business

Once you've secured funding for your minority owned business, managing your team becomes your next challenge. Homebase helps you:

• Find the best fit for your team 
• Schedule shifts in minutes 
• Approve timesheets from your phone
• Run payroll correctly in just a few clicks

Try Homebase free and spend less time on admin work and more time growing your business.

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Frequently asked questions about minority business grants

Can an LLC get grant funding?

Yes, an LLC can get grant funding. Most grants are available to LLCs, corporations, and sole proprietors—your business structure doesn't determine eligibility. What matters is that a minority individual owns at least 51% of the business and actively controls day-to-day operations.

What is the SBA $10,000 grant?

The SBA $10,000 grant doesn't exist anymore. It was part of the Economic Injury Disaster Loan (EIDL) Advance program during COVID-19, which ended in January 2022. The SBA doesn't offer grants to start or expand businesses. Look at state programs, MBDA opportunities, or private corporate grants instead.

Are minority business grants taxable?

Most minority business grants are taxable. The IRS generally treats grants as taxable income on your business tax return. Exceptions include federally declared disaster relief grants and grants to 501(c)(3) nonprofits. Consult a CPA about your specific grant before spending the money.