Minority Loan and Grant Programs
Q: I would very much like to go out on my own, and I've created a business plan for an exciting business. However, because I'm in the "pre-funding" stage, I'm still plugging away at my day job. Are there any minority small business loans or grants that could help me make the transition to entrepreneur?
A: There's a need for minority programs that assist in the maturation of new businesses, and there are several of these programs available. However, any entrepreneur seeking out these sources must also focus on how well her business survives independent of these programs--after all, a successful minority business will have to mature itself out of the program eventually. Make sure you have some sort of maturation plan in place that allows you to succeed without minority set-asides within three to five years, for instance; otherwise, you may find yourself simply building a business to be bought out or putting yourself at too great a risk.
Your first strategy is to look in your own area for local funding, which is available in some communities from redevelopment agencies and other local organizations. An example of a regional organization is FAME Renaissance, which operates several social and business development programs designed to create wealth in impoverished areas within Los Angeles County. Also in the Southern California area is Operation HOPE, a very worthwhile organization that has dispersed a total of $72 million in minority loans to homeowners and business owners. Even if you don't live in Southern California, I'd recommend paying a visit to the Operation HOPE Web site, which has several inspiring success stories as well as transcripts of speeches from Operation HOPE founder John Bryant, who speaks eloquently about the issues revolving around the "digital divide" and economic empowerment. Some other regional organizations include Brotherhood Business Development & Capital Fund and Pacific Coast Regional.
On a broader scale, Ron Langston, Assistant Secretary of Commerce under the Bush administration, has been very dedicated to the growth of minority businesses and appreciates the special needs that a minority may face in making the transition to entrepreneur. Toward that end, have a look at the upcoming Minority Enterprise Development Conferenceand the Web site for the Minority Business Development Agency (MBDA). Besides information on funding, the MBDA site offers a wealth of good advice for any small business, minority or otherwise.
Besides loans to get started, there are also minority set-asides that an ongoing business can take advantage of. The 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 once you've launched 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.
Lastly, as with any type of financing, minority funding also depends on having a sound business plan, quality goods and your personal dedication to success.
Janice Bryant Howroyd is founder, chairman and CEO of Torrance, California-based ACT-1 Group, the largest woman minority-owned employment agency in the United States, with more than 70 offices, 300 full-time employees, 65,000 temporary "stars" and annual revenues exceeding $500 million. Founded in 1978 around Howroyd's personal philosophy of "Keeping the Humanity in Human Resources," ACT-1 is today a multidivision conglomerate serving such clients as Ford Motor Co., Gap Inc. and Sempra Energy and meeting demands for well-educated and well-trained temporary, full-time and contract employees. She has twice been honored by the Star Group as one of 50 Leading Woman Entrepreneurs of the World.
The opinions expressed in this column are those of the author, not of Entrepreneur.com. All answers are intended to be general in nature, without regard to specific geographical areas or circumstances, and should only be relied upon after consulting an appropriate expert, such as an attorney or accountant.