What are the Different Types of Minority Business Financing?

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  • Written By: Erin J. Hill
  • Edited By: Bronwyn Harris
  • Last Modified Date: 07 October 2019
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There are various types of minority business financing, most of them the same or similar to options available for any other potential business owner. Grants may be available to certain minority groups, with various organizations giving them to certain types of companies or people of certain ethnicities. Other types of financing can include small business loans and private investors.

The main type of minority business financing that is available to only certain racial or ethnic groups of people include minority business grants. These can be offered by the government, not for profit organizations, and larger companies. Schools may also offer them on occasion. Generally, these are awarded to a set number of people or businesses per year. Sometimes only certain types of minority owned companies are considered. Examples may be businesses in certain industries, those owned by women, or those owned by people who graduated from a specific college or with a certain major.

In order to get minority business financing in the form of a grant, owners generally must write a proposal. This is a form of application which explains why a certain individual or business should be awarded the money. Goals the company will have and a detailed business plan may also be included. A professional grant writer can be hired to take care of this portion of the application process. If a company is denied, some granters allow the same business to apply again the following year.


Other forms of minority business financing include small business loans and private investors. Loans are sums of money given by a bank or another institution that must be paid back within a certain amount of time. They are often subject to credit approval. The amount given will depend on the business's or individual's income, assets, or collateral.

If neither of the other forms of minority business financing is available, a private investor may provide the necessary funds. This is a person or company who provides financing for a particular company or project. In exchange he or she become part owner of the company or is given a certain percentage of profits. Occasionally an investor may agree to give a private loan to a potential business owner, but this is less likely.


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