Minority Business Funding --
The Key To Funding Success

Minority business funding comes easiest when you already have clients in your pocket.

Imagine that you have $100,000 to loan. Two companies stand in front of you, virtually equal in most respects. One of them has its first six clients lined up, with commitment letters. The other doesn't. Which one will you lend your money to?

Your first strategy is to look in your own geographical area for local backing, which is available in some communities from redevelopment agencies, and from city, county and regional government agencies of all kinds. Many local agencies have implemented minority set-asides or contract goals. This is the best way of lining up business.

And, with your customers all in a row, funding from everywhere becomes a whole lot easier.

MBDA is an Invaluable Ally

The Minority Business Development Agency (MBDA) is one of those real gems: a government agency that succeeds. Besides information on funding, the MBDA site offers a wealth of good advice for any small business, minority or otherwise. The website can be a bit overwhelming, so take your time going through it.

While you are visiting the MBDA, take a look at the MBDA Community Exchange. This is is an online forum where minority-owned businesses can meet and exchange ideas and information by categories and topics.

Be sure to register with MBDA Phoenix Database for ongoing business referrals. It is an excellent source of business.

National Minority Supply and Diversity Council

NMSDC provides a direct link between corporations and minority businesses. A quick look through its list of member corporations--those companies that want to purchase quality goods and services from minorities on a competitive basis--reveals some of the biggest corporate citizens in the United States.

The NMSDC, with regional offices in most states, is a good first step in seeking out your first contracts as you are launching your new business. You can even join its database of certified minority suppliers and get referrals to corporate buyers. In 2000, member corporations made purchases from minority businesses registered with the NMSDC exceeding $54.3 billion.

Decide If Certification Is Your Best Step

The process does take some time and effort, can cost up to $350, and periodic renewal fees may be required, which is why so many small businesses never take advantage of the opportunities brought by being designated a minority business. You should decide which certifications are the best for you.

Find more on certification from the National Minority Business Council and the Women's Business Enterprise National Council.

Also be sure to register as a minority business with the Small Business Administration.
There are many state and local programs that can get you headed in the right direction.

Requirements for Certification

Each certifying entity will have its own criteria. But generally, you will need proof that you exist as a small business and show that 51 percent of the business is owned, controlled and actively managed by minority group members.

Anticipate being asked about your business' history, legal and financial structure. You could be asked for customer and bank references, details about loan activity, financial statements, balance sheets, tax returns, professional or business licenses, real estate leases, a list of employees, your driver's license and more.

Look to Grant Funding

Grants for minority businesses are often more accessible than for non-minority businesses.

See what you can find that applies to you.

Check Out Other Resources for Minorities

See out links below for more information for minority business funding. Your funding source is there. Your job is to find it.