According to research done by the Harvard Business Review, Black women are the fastest-growing group of entrepreneurs in the United States. Despite this high startup rate, only three percent run mature businesses.
One reason may be the lack of financing. The same research showed that 61 percent of Black women self-fund their startup capital. This makes sense, as Black-owned businesses continue to be the group least likely to be fully approved for business loans, according to the Federal Reserve.
Here’s a look at some of the options available to Black women.
1. SoGal Black Founder Startup Grant
The SoGal Foundation has come together with various sponsors, including Walmart.org’s Center for Racial Equity, Winky Lux, Twilio, bluemercury, and twelveNYC, to create the SoGal Black Founder Startup Grant. Black women and nonbinary entrepreneurs across the U.S. are awarded $5,000 and $10,000 grants to grow their businesses.
Application process
Black women or Black nonbinary entrepreneurs with a legally registered business, such as a limited liability company (LLC) are eligible. Owners must have plans to secure investor financing, a scalable, high-impact idea or solution and the ambition to potentially become the next billion-dollar business. Grant applications are rolling, so only one application needs to be submitted.
2. Lift As We Climb Grant
The Lift As We Climb Grant was created by Flawless by Gabrielle Union. The goal of the grant is to provide financial support and boost Black female businesses by awarding three Black female entrepreneurs each $25,000, a one-year LinkedIn Premium membership and a mentorship session. Eligible businesses include hair accessories, skincare or fashion brands with fully developed products or services not distributed at a major retailer.
Application process
The application can be completed online through April 19, 2023, and requires business owners to submit a brand deck and one-minute video that discusses their mission, vision, and plans for their brand. The winner will be chosen from six finalists after each completes a virtual pitch.
3. The Catalyst Fund Grant
The goal of the Mastercard Strive program, which is operated by Hello Alice, is to close the black wealth and opportunity gap by providing an online platform with access to financial tools and capital.
The program includes The Catalyst Fund Grant, which awards several $5,000 grants to help Black women entrepreneurs based in Atlanta, Birmingham, Dayton, Los Angeles, New Orleans, New York City, St. Louis, and Washington, D.C. achieve their next business milestone.
Application process
Black women who own 51% or more of for-profit businesses with one to 10 employees in the selected cities are eligible for this grant. If you meet the criteria, sign up for a Hello Alice account to apply. The application period closes March 31, 2023.
4. Build Your Legacy Grant
Essence and Pine-Sol have partnered to offer the Build Your Legacy Grant. Every year, a vote is held to select one black woman entrepreneur to receive the $100,000 grant and six months of business coaching.
Application process
In the past, this contest has run from March to April, with a winner being announced by July. No official announcement has been made for the 2023 contest. For more information about grant eligibility and future application periods, sign up for Pine-Sol’s newsletter.
5. Invest in Progress Grant
The Invest in Progress Grant is available through The Boss Impact Fund, a program created by Boss Network and Sage that invests in Black women-owned businesses and provides resources to owners and founders looking to build and grow their companies. Over the next three years, the program will give out a total of $1.5 million to business owners across the country. Each grant recipient will receive $10,000, a one-year scholarship to BOSS Business University and monthly mentoring from BOSS or a selected agency.
Application process
The 2023 application period has closed, but future grant applications can be completed and submitted online via Hello Alice during the 2024 application period.
6. The Coalition to Back Black Businesses Grant
The Coalition to Back Black Businesses, which includes ADP, AIG Foundation, Altice USA American Express, Dow and the S&P Global Foundation, launched its grantmaking and mentoring initiative in 2020 with the goal of supporting Black business owners impacted by COVID. Several $5,000 and $25,000 grants will be awarded as well as training and mentorship to black-owned businesses with three to 20 employees in economically vulnerable or distressed communities.
Application process
The 2023 to 2024 cycle is likely to begin in August 2023 and run through September. To apply in the future, eligible businesses can complete a brief application online, which requires their business name, industry, zip code and contact information. If selected as a finalist, a full application must be completed.
7. Fast Break Small Business Grant
The Fast Break Small Business Grant was created by LegalZoom, NBA, WNBA and NBA G League and is managed by Accion Opportunity Fund. To support Black-owned small businesses, the program will give $6 million in grants, products and services. Each selected business receives a $10,000 grant and LegalZoom products and services, up to $500.
Application process
The application process is expected to reopen later this year during the WNBA season and will be open to small business owners across the U.S. Each eligible business owner can provide their name and email address on LegalZoom to be notified when the application period opens. And for eligibility requirements and a list of ineligible industries, head over to Accion Opportunity Fund, which manages the application process.
8. Wish Local Empowerment Program Grant
The Wish Local Empowerment Program Grant is part of a plan to aid in the fight against systemic racism and its impact on Black-owned businesses by gifting $2 million in the form of $500 to $2,000 grants to small businesses with no more than 20 employees, a brick-and-mortar location, and less than $1 million in average annual revenue.
Application process
To complete the online application, business owners must provide details about their business and qualifications for the program. Selected businesses are required to join Wish Local, a program that partners e-commerce marketplace Wish with small businesses, which allows them to sell their products on Wish.
9. Power Forward Small Business Grant
Vistaprint, the Boston Celtics Shamrock Foundation and the NAACP have partnered to offer $1 million to Black-owned businesses through the Power Forward Small Business Grant. Black-owned small businesses in New England can win a $25,000 grant, marketing and design resources, and features on co-branded platforms.
Application process
To apply, your business will have to be based in Massachusetts, Maine, New Hampshire, Rhode Island, Vermont, or select areas of Connecticut. The current grant cycle has closed, but business owners can apply online when the application period re-opens.
10. Backing the B.A.R. Grant
The Backing the B.A.R. Grant is part of the initiative launched by the NAACP and Bacardi to support to Black-owned businesses in the sales, hospitality, and beverage alcohol service industries. This includes bars, lounges, restaurants, liquor stores and nightclubs. Businesses with a liquor license or plans to get a liquor license are eligible to receive a $10,000 grant as well as educational support and mentorship.
Application process
The application will be available online starting June 17, 2023, and running until July 30, 2023. Business owners must have or be seeking a liquor license and will need a Hello Alice account to apply.
11. BREAKTHROUGH Grant
The BREAKTHROUGH Grant is offered by digitalundivided’s BREAKTHROUGH Program, which is sponsored by JPMorgan Chase’s Advancing Black Pathways. Black and Latina women founders based in New York and with businesses established no less than a year ago with a minimum annual business revenue of $50,000 and a website or mobile app are eligible. In addition to a $5,000 grant, winners will receive a business mentor, sessions with industry leaders and the Entrepreneur in Residence, access to digitalundivided’s community of Latina & Black women entrepreneurs and post-program support.
Application process
The application for the BREAKTHROUGH Grant is available online for this cycle until March 20, 2023. Applicants must have a website or app component to their business and sign up for a Gust account to complete the application.
12. HerRise Micro-Grant
The HerRise Micro-Grant was created by the Yva Jourdan Foundation, a HerSuiteSpot non-profit that raises money through donors and sponsors. Its goal is to offer community, coaching and capital to women of color who own businesses. Every month, a female business owner of color receives a $500 micro-grant, which will help them strengthen their business and fulfill their goals of positively impacting their communities.
Application process
The 2023 application cycle has yet to begin. When it does, you can complete an online application on the HerSuiteSpot website.
13. Amber Grant
The Amber Grant was founded in 1998 by WomensNet to honor Amber Wigdahl, an aspiring business owner who died at 19 years old. Two monthly $10,000 grants are awarded to one finalist in two different categories: Marketing Grants and Business Category Grants. At the end of each year, the previous monthly winners also have the opportunity to win two $25,000 grants.
Application process
The application for the Amber Grant is available online. Applicants must submit personal and business details and a $15 application fee. One application can be completed, and it will apply to all eligible grants related to your business.
14. National Association for the Self-Employed Growth Grant
The National Association for the Self-Employed (NASE) has offered the Self-Employed Growth Grant since 2006. Each year, four small business owners receive a $4,000 grant to cover various business expenses, including hiring, marketing and advertising.
Application process
This grant is open to any business owner, though you must be a NASE member in good standing. Additionally, they must provide details about their business and how the grant will be used when completing the online application. Grant applications are reviewed quarterly.
15. Galaxy Grant
Hidden Star, a non-profit dedicated to helping women of all backgrounds succeed as entrepreneurs, offers the Galaxy Grant to woman-owned small businesses. Winning businesses each receive a $3,350 grant. Business owners can increase their chances of winning by referring a friend, and if the referred business owner wins, the referring business owner also wins.
Application process
Applications for the Galaxy Grant are accepted online. The 2023 application period has closed, so check back in 2024 to apply.
Bankrate insightFor additional assistance, check out the following resources:The Minority Business Development Agency (MBDA)Grants.govU.S. Black Chambers, Inc.The National Black Chamber of Commerce (NBCC)SBA 8(a) Business Development Program
Alternatives to business grants for black women
Black female entrepreneurs who don’t qualify for or receive a business grant have other options to help secure financing.
Small business loan
Small business loans allow owners to borrow a large sum and pay it back over time, plus interest and any fees. These types of loans are available through various lenders, including banks, credit unions, online lenders and the Small Business Administration(SBA).
The business owner completes an application and provides details about their business, and the lender approves or denies the application. If approved, funds are received in one lump sum and can be used to cover short and long-term business expenses.
Special purpose credit programs
Special purpose credit programs empower banks to provide loans to economically disadvantaged small business owners. While not widely available, some banks like Chase and Zions Bank provide credit to business owners who typically are not eligible for loans from traditional banks.
Business line of credit
A business line of credit is another option for business owners who need to cover short-term expenses, such as inventory or payroll. Similar to a business credit card, a business line of credit is revolving, so purchases can be made up to a certain limit and must be repaid by the due date or interest will be charged. Once the available credit resets, purchases can be made up to the limit.
Business credit card
A business credit card is ideal for short-term expenses because it is a revolving line of credit that allows the cardholder to make purchases up to a certain limit. The limit resets once the balance is paid, but if the full balance isn’t paid, interest is charged.
Crowdfunding
Through crowdfunding, business owners fundraise to cover various business expenses. Depending on the type of crowdfunding — donation, debt, reward, or equity — donors will get something in return for their contribution, such as rewards or equity in the company.
Sites like SeedInvest and Indiegogo are great for crowdfunding, but Black Girl Ventures is an organization that offers Black women a unique crowdfunding experience. Through the BGV Pitch Program, business owners can participate in a live pitch event. They have six minutes to pitch their business and answer questions from the audience, who use money to vote for the best pitch.
Bottom line
Black women may be the fastest-growing group of entrepreneurs in the country, but they still face many barriers when it comes to launching and growing their businesses. While many turn to bank loans, credit cards or lines of credit to fund their businesses, Black business owners tend to self-fund, which can be risky. But companies and organizations that create grants for Black women entrepreneurs can give more Black-owned businesses throughout the country the chance to succeed.
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