Resources for Minority-Owned Businesses
Minority-owned businesses are an important driving factor in the United States economy and account for the creation of millions of jobs. According to the U.S. Census Bureau, there are more than 1 million minority-owned businesses in the U.S. and another 1.1 million owned by women. And while minority-owned businesses have grown steadily in size and influence over the years, they still face some unique challenges.
At the onset of the Coronavirus pandemic, for example, the economy dipped significantly. Minority-owned businesses were disproportionately affected. They faced higher closure rates, and many experienced greater difficulty securing commercial loans compared to their non-minority-owned counterparts. Fortunately, resources are available to help bridge the gap, and we will talk about some of those later. First, let’s discuss why supporting minority-owned businesses is so important.
The Importance of Supporting Minority-Owned Businesses
At First Service, we believe in building a strong community. Local businesses help shape their communities and should reflect their neighbors' values and identity. In many places, it’s hard to imagine one without the other, and there are far-reaching benefits when minority entrepreneurs succeed. Support of minority-owned businesses can:
- Inspire the next generation of entrepreneurs
- Create jobs and wealth
- Bring diverse ideas and beliefs to new audiences
- Help close the racial wealth gap
- Empower, encourage, and strengthen local communities
Now let’s take a look at what it means for a business to be designated as “minority owned.”
What Is a Minority-Owned Business?
As we discuss resources and programs intended to bolster minority-owned businesses, it’s important to note that there are specific requirements a business must meet to be considered minority-owned. For example, there are organizations to support Black, Asian-Pacific, Hispanic or Latin American, Native American, LGBTQ, women, and veteran business owners. Different program providers and administrators may look for different criteria, so it’s important to check with individual agencies to understand their specific ‐ and in some cases unique ‐ requirements before beginning an application. Doing research can also help business owners looking for resources because it helps them find groups or organizations focused on supporting their specific needs.
Federal, State, and Local Resources to Consider
There are federal, state, and local agencies that exist to help minority-owned businesses and provide the tools they need to achieve success. Below, we'll explore some of the key resources every minority business owner should be familiar with, from the federal government down to local, Houston-based programs and initiatives. Here’s a look at some of the best resources from every level.
U.S. Federal Resources
The U.S. government, along with larger nationwide nonprofits and professional organizations, have created a number of programs to support the establishment and growth of small businesses owned by disadvantaged and minority groups.
Small Business Administration (SBA) Programs
The SBA is a U.S. government agency that provides support for small businesses. The SBA offers national and local resources that include training, grants, loans, and access to government contracts for minority-owned firms. It is probably best known for its generous loan program, which has helped countless businesses grow in ways they wouldn’t have been able to without SBA support. Let’s take a look at some of the key programs the SBA offers to support minority-owned businesses.
- Office of Women’s Business Ownership (OWBO): Established by the SBA in 1979, the mission of the OWBO is to enable and empower women entrepreneurs through advocacy, outreach, education, and support. The office provides training and counseling opportunities in various languages to underserved markets.
- Office of Native American Affairs (ONAA): The ONAA ensures that American Indians, Alaska Natives, and Native Hawaiians seeking to create, develop and expand small businesses have full access to the necessary business development and expansion tools available through the SBA's entrepreneurial development, lending, and procurement programs. This office works directly with tribal outreach programs.
- Office of Veterans Business Development (OVBD): In an effort to support veterans, dependents, and survivors, the OBVD works to maximize the availability, applicability, and usability of all administrative small business programs for this important group.
- SBA's Network for LGBT Businesses: The SBA Network for LGBT Businesses works with local district offices, including the Greater Houston LGBT Chamber of Commerce, to bring focus to economic empowerment in the LGBT business community by providing access to the SBA's programs and services.
- SBA 8(a) Business Development Program: This program ensures that at least 5% of all federal contracting dollars go to small, disadvantaged businesses. While not exclusively for minority-owned companies, the program provides mentorship, technical assistance, and more.
- SBA 7(a) Loan Programs for Small, Disadvantaged Businesses: This financial assistance program extends loans that may benefit minority-owned businesses and includes the SBA Community Advantage Loan and SBA Microloans.
Minority Business Development Agency (MBDA)
Founded by the U.S. Department of Commerce in 1969, the Minority Business Development Agency supports minority-owned businesses by connecting these businesses with essential resources, including financing, contracts, and networking opportunities. Geared toward Black American, Asian American, Pacific-Island American, Hispanic or Latin American, Hasidic Jewish, or Native American companies, programs include:
- Business Centers
- Business Services
- Grant Competitions
National Minority Supplier Development Council (NMSDC)
The National Minority Supplier Development Council is a corporate membership organization that connects corporations and supply-chain partners from Asian, Black, Hispanic, and Native American communities. Companies must certify 51% ownership by one or more U.S. citizens whose ethnic background is at least 25% Black American, Asian-Indian American, Asian-Pacific American, Hispanic American, or Native American. With more than 1,400 certified members, they have generated more than $400 billion in economic output.
SCORE is a nonprofit association with more than 13,000 volunteer counselors across the U.S. They offer mentorship, training, and workshops to help small businesses achieve their goals according to their unique needs. SCORE offers several programs for minority-owned businesses, including SCORE for Black Entrepreneurs. There is also a Houston chapter where business owners can connect with local mentors and workshops in the area.
Resources Offered by the State of Texas
In addition to federal programs, each state offers resources to support minority-owned businesses within its borders. Here are a few of the programs made available to minority entrepreneurs in Texas.
Historically Underutilized Business Certification Program (HUB)
Minority-owned businesses operating in the state of Texas can become HUB certified to connect with more than 300 state agencies. To qualify, a business must be at least 51% owned by a Black American, Asian-Pacific American, Hispanic American, Native American, an American woman, or a Service-Disabled Veteran.
Disadvantaged Business Enterprise Program (DBE)
The Texas Department of Transportation (TxDOT) created the Disadvantaged Business Enterprise (DBE) Program to help minority- and women-owned companies do business with TxDOT and other agencies receiving federal funds from the U.S. Department of Transportation. To participate in this program, businesses must apply for certification using TxDOT's Diversity Management System.
The Small Business Enterprise (SBE)
DBE-certified businesses in Texas qualify to participate in the Small Business Enterprise (SBE) Program, a resource that connects minority- and women-owned businesses with TxDOT contracting opportunities. The program focuses specifically on highway construction and maintenance projects funded entirely by state or local funds.
The Center for Women Entrepreneurs at Texas Woman's University
The Center for Women Entrepreneurs at Texas Woman's University helps current business owners or women who are considering starting a company get the resources they need to reach their business goals. Tools they offer include:
- Business Advising
Houston-Area Resources for Minority-Owned Businesses
The city of Houston takes great pride in its diversity. It is marked by a number of communities that represent people from all across the globe, and, as such, has become one of the most culturally rich and vibrant cities in the nation. Houston embraces this diversity and offers several programs geared toward helping minority business owners flourish. Let’s take a look at a few resources available in our own community:
Houston Minority Business Development Agency (MBDA)
You can find the Houston Minority Business Development Agency (MBDA) Business Center at the Houston Community College. Founded in 2013, this center is made possible by the U.S. Department of Commerce. Its mission is to help minority-owned businesses with referrals, business consulting, contract opportunities, and capital resources.
Houston Minority Supplier Development Council (HMSDC)
Established in 1973, the Houston Minority Supplier Development Council (HMSDC) is a nonprofit organization that connects minority-owned businesses with major corporations and contract opportunities throughout the state of Texas. The HMSDC is a regional affiliate of the National Minority Supplier Development Council and works exclusively with certified minority-owned businesses.
The Greater Houston Black Chamber
The Greater Houston Black Chamber is the second oldest black chamber of commerce in the U.S. Its mission is to empower and promote African-American businesses in Houston, and they offer their members a number of training sessions, networking events, and educational opportunities.
Houston Community College's Office of Entrepreneurial Initiatives
Houston Community College's Office of Entrepreneurial Initiatives' mission is helping minority, veteran, and women-owned businesses grow. They offer workshops, seminars, and classes at their Center for Entrepreneurship and provide free online webinars to make the information more widely available.
Taking the Next Step for Your Business
All small business owners understand how important it is to take advantage of all assistance available. While the resources described above can provide support for minority-owned businesses, you may need additional help to reach your goals. As a certified SBA lender, First Service is proud to support small businesses in our community.
If you are considering looking for a commercial loan for your business, we can help with everything from building your business credit profile to gathering the necessary documentation to complete your application. Our friendly, knowledgeable team is here to walk you step-by-step through the process and answer any questions you may have along the way. We even helped dozens of local businesses take advantage of the Payroll Protection Program (PPP) throughout 2020 and 2021. Complete the form below to set up a time to speak with a commercial loan advisor about what First Service can do for your business.