In the United States, the civil rights movement of the 1960s opened doors for minority entrepreneurs, who had previously been widely marginalized by more affluent white business owners. President Nixon got the ball rolling in 1969 when he established the Office of Minority Business, or OBME, as part of his initiative to spur the growth of minority capitalism. Since then, the OBME has been merged into the U.S. Department of Commerce, and its six regional offices remain highly functional, feeding technical advice and information into over 100 local business development centers nationwide. Several different programs available today are descended from Nixon’s brave, forward-thinking initiative, and can help minority business owners establish a foothold in today’s competitive business environment.
First and foremost, the Small Business Administration, or SBA, has increased its efforts to aid minority business owners obtain loans. The SBA currently offers two kinds of programs – loan assistance and “set-asides”. Set-asides, which predated Nixon’s initiative by 16 years, are a handful of government contracts which are “set aside” for minority contractors, who are given priority over white business owners. Set-asides are reserved for African Americans, Hispanics, Native Americans, Asian Pacfic Americans, Tongans and Indonesians. Curiously, the list now excludes Hasidic Jews and Iranians, groups whom the agency claims to now be free from “long term bias”. Naturally, set-asides have been controversial and have spurred accusations of reverse discrimination.
For residents of Iowa, the Targeted Small Business, or TSB, Assistance Program, offers equity grants of up to $50,000 to “targeted small businesses”. These businesses must be majority owned and operated by a minority, which includes non-white ethnic groups, women and disabled people. The company cannot exceed annual gross sales of $4 million. The primary reason for these grants is to help minority businesses offset loan debt incurred when first starting the business. Some states have similar programs – check your state’s government website for more details.
Native American business owners may also be able to qualify for additional financial assistance. For example, the Montana Indian Equity Fund offers financial assistance to any of the Indian tribes recognized by the state of Montana. There are fewer restrictions to the use of the funds, and doesn’t have a set amount. However, business owners must match the funding dollar for dollar. Other tribes in the western United States may offer similar services for other Native Americans.
Lastly, women are also considered a minority. Several groups have been established to help women start their own businesses. The SBA established the Women’s Business Center Initial Grant, which provides up to $150,000 in technical assistance to female entrepreneurs in New Jersey. Similar programs exist in other states as well. The technical assistance is usually not cash or equities – rather it provides hired help for the purpose of organizing finances, management and marketing plans.
There are a wide number of similar programs nationwide. If you wish to stay up to date on these opportunities, you should join supportive minority organizations, such as the Minority Builders Association, the National Indian Building Association and the Association of Black Women Entrepreneurs. Visit the Small Business Administration or and Grants.gov for further information on available programs.