9 Funding Resources for Black-Owned Businesses
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Note from editor: August marks National Black Business Month and in honor of black entrepreneurs, we’ve put together a list of funding options particularly for Black and minority-owned business that have been affected by the COVID-19 pandemic.
While rewarding, running a successful small business can be challenging, even in the best of times. But in a pandemic, it can be a struggle just to survive. That’s particularly true of Black-owned businesses. The National Bureau of Economic Research reports 41% of Black-owned businesses (440,000 enterprises) have been shuttered by COVID-19. That’s compared to 17% of white-owned businesses.
Brookings Institution fellow, Andre Perry says Black business owners haven’t had the opportunity to develop the kind of equity needed to cushion against this moment in time.
Recent government programs have provided some relief, but only 12% of Black and Latinx businesses who applied for them received what they asked for. That’s why alternative funding sources are so important.
Here is a partial list of funding options targeting Black and minority-owned businesses. (Note: application periods and funding amounts are subject to change):
Black Business Relief Fund
WeBuyBlack, a global marketplace for Black-owned businesses, has partnered with natural beauty products company SheaMoisture. Together they provide grants to Black-owned businesses in jeopardy of going bankrupt or closing due to COVID-19. Here’s a profile of past recipients.
Business for All Programs
Hello Alice offers grants up to $50,000 along with other membership opportunities. Applications are open through September 25, 2020. In addition, their Black-Owned Business Resource Center maintains a spreadsheet with links to other funding sources. The spreadsheet is updated often so check back. For example, the U.S. Black Chambers COVID-19 Resources for Black Founders provides resources.
This crowdfunding platform is dedicated to helping Black founders jump start and scale their entrepreneurial ventures. Owners can create a project on the website. A free webinar shows how to get started. In addition, members of the fundBLACKFounders team will provide feedback to help strengthen your crowdfunding campaign. Here’s a sample of the projects currently seeking funding.
This website lets you search for available federal grants. It can be challenging to navigate since it features a wide range of programs, not just emergency relief. Start by searching on “minority owned small businesses” to narrow your search. You can also sort on the date it was posted to get the latest opportunities.
Lowes Small Business Relief Grant
Lowes has announced a $30 million emergency grant program focusing on minority and women-owned small businesses who lack access to affordable capital. Grants up to $20,000 can be used for immediate needs like rent/utilities, payroll, or paying outstanding debt. Sign up to be notified when the next round of funding opens.
This organization provides microloans to Black and Lantinx-owned small businesses. The online application asks owners to describe their current needs. The application is then reviewed by the organization. If approved, funds are disbursed within 24 hours via PayPal.
Moms As Entrepreneurs
This fund is designed for mom-owned businesses who have been shut out of government loans during COVID-19. Grants of $500 to $1,000 are awarded. The business must have experienced a 40% decline in sales during the pandemic. You must also share 10% of the award with another mom-owned business.
Red Backpack Fund
Supported by Spanx founder Sara Blakely and GlobalGiving, this foundation is giving $5,000 grants to female entrepreneurs in the wake of COVID-19. You must have at least one paid employee to qualify. The latest round of awards will be announced in September. It is not yet determined whether additional application periods will be available.
In addition to federal programs, a number of states have their own COVID-19 relief programs. Gusto maintains a spreadsheet of these programs. It’s updated regularly so you’ll want to bookmark it for future reference. In some cases, special consideration is given to minority-owned businesses.
Take a look at these funding sources targeting Black and minority-owned businesses. They may provide a valuable lifeline when faced with the unique challenges of running a business in a pandemic.