When the COVID-19 pandemic and subsequent economic lockdown kept people at home, many aspiring entrepreneurs used that opportunity to start the businesses they’d always dreamed about.
This is evident from the recent data released by the U.S. Small Business Administration (SBA). The SBA loaned out nearly $45 billion, a historically high number, with a good chunk of that money going to help minority-owned businesses get started.
Gaining access to business networking is one of the foremost challenges for any entrepreneur. Access to these networks can lead to access to capital and the opportunity to further develop one’s skills. Networking problems can be overcome by any entrepreneur, but it can often be more challenging in minority neighborhoods.
Furthermore, the Paycheck Protection Program (PPP) that was designed to help small businesses survive the shutdowns does not seem to have reached minority-owned businesses. Initial studies show that Black or African American businesses received just 8 percent of the available loans, although the majority of business owners did not report their race or ethnicity when applying.
While these numbers are discouraging, the SBA loan activity is heartening. In fact, over the past 10 years, minority-owned businesses accounted for over half of all new entrepreneurial activity in the United States and created nearly 5 million new jobs.
Other avenues for help
The SBA loan program is a great start, and there are other ways for aspiring minority entrepreneurs to get the needed startup capital.
The Minority Business Development Agency is an arm of the U.S. Commerce Department and helps bridge the networking problem. This agency helps to connect minority entrepreneurs with financing opportunities, potential markets for their products and services and, if applicable, to federal contracts.
There’s also the Fast Break For Small Business: a partnership that includes the National Basketball Association and related basketball leagues. This partnership offers grant money and legal services to minority entrepreneurs.
The above are examples aimed specifically at minority-owned businesses. But with minority groups comprising an unfortunately disproportionate share of those on the economic margins, many are now in a position to benefit from an even larger number of resources aimed to help them enter into entrepreneurship.
Such programs include:
- USDA Rural Business Development Grant Program. Available to any business in a rural area with 50 or fewer employees. Rural businesses may require larger areas of land for their operations, and the USDA grant can help with this and other expenses.
- National Association For The Self-Employed. A non-profit trade association that provides grants up to $4,000 to its members.
- Small Business Empowerment Program. This program aims to solve the gap in training and skills development. Participants get a 12-week program that teaches about business financing, credit and a whole lot more.
Finally, consider the geographic area of the country where you live. Some states offer better opportunities for minority-owned businesses than others.
Check out this complete map of where minority-owned businesses are most abundant, both in terms of raw volume and percentage of new startups.
If you want to learn more about starting a business and other ways to help grow your entrepreneurial dream, contact the incorporation professionals at MaxFilings today!