According to a 2018 report from the U.S. Small Business Administration, minorities own 8 million of the country’s 30.2 million small businesses. The Senate Committee on Small Business & Entrepreneurship found minority-owned businesses made up more than 50% of the 2 million new U.S. businesses started in the last decade. Of the small businesses driving economic growth, they’re responsible for providing 4.6 million jobs.
Are you the head of a minority-owned business or a female business owner? If so, you have the option of obtaining official certification of your status. Find out if you meet the qualifications and how certification can provide your company with support and growth opportunities.
To be considered minority owned, your business needs to meet several qualifications:
Women-owned businesses fall into a separate category, but have similar qualification requirements:
These designations are designed to encourage women and minorities to start and maintain small businesses in the U.S.
Becoming certified gives you access to several minority- and women-owned business benefits, including:
Certification may also help you get attention from corporations seeking to work with minority- and women-owned businesses.
If your business meets the requirements, you can apply for minority- or women-owned status through a variety of organizations. Additional opportunities at the local/state level may be available, but these are the three most common certification options available.
The National Minority Supplier Development Council has its entire certification process online. To complete your application, you’ll need to register on your regional NMSDC’s website and submit the following documentation:
Additional documents may be required depending on your company’s structure. Certification fees start at $350 for businesses with less than $1 million in annual revenue, and approval can take up to 90 days. If you’re approved, you’ll officially have Minority Business Enterprise (MBE) status and be eligible for the associated benefits.
Businesses meeting women-owned criteria have two relevant designation options: Women Business Enterprise and Women Owned Small Business.
Becoming a WBE opens up opportunities in the private sector; WOSBs can bid on government contracts.
You can complete the WBE certification process through the National Women Business Owners Corporation or the Women’s Business Enterprise National Council. Documentation requirements are similar to those for MBE registration with some variations for different business structures.
WBE certification fees start at $350 through the WBENC; an initial application through the NWBOC costs $400. You’ll also need to pay annual renewal or recertification fees to keep your company’s status as a women-owned business. Processing takes around 90 days.
The SBA oversees WOSB certification. You can either apply through approved third parties or self-register on the SBA’s website. Self-certification requires you to register for an MPIN through SAM.gov and provide both an EIN and a DUNS number.
Check the qualification requirements before you register to make sure your business falls within the SBA’s size limits.
Businesses run by socially and economically disadvantaged individuals may be eligible for the nine-year SBA 8(a) program. Eligibility is determined by criteria laid out in Title 13 Part 124 of the Code of Federal Regulations, which includes:
The SBA uses these and additional requirements based on financial status, time in business and board structure to determine if a business owner’s “ability to compete in the free market system” is impaired by social or economic factors beyond his or her control. Qualifying businesses go through four years of training and development followed by a five-year transitional period before “graduating.”
If you believe you meet the requirements, you can self-certify through SAM.gov and the SBA’s certification website. During the certification process, they’ll ask you to provide personal financial documents and a variety of financial and legal information about your business.
Despite a growing presence in the U.S., it’s still difficult for minority- and women-owned businesses to get funding. Minority firms that do get approved receive about half of what’s awarded to non-minority firms. Often, these deals are at higher rates and have less-than-ideal terms.
Minority business loans from National Business Capital & Services are different.
National’s financing options have a 90% approval rate for all applicants – including women and minorities. No matter what your credit score or how long you’ve been in business, you may be eligible for funding to help your business grow and thrive. Get in touch with a financing advisor to find out what National can do for you.
National Business Capital & Services is the #1 FinTech marketplace offering small business loans and services. Harnessing the power of smart technology and even smarter people, we’ve streamlined the approval process to secure over $1 billion in financing for small business owners to date.
Our expert Business Financing Advisors work within our 75+ Lender Marketplace in real time to give you easy access to the best low-interest SBA loans, short and long-term loans and business lines of credit, as well as a full suite of revenue-driving business services.
We strengthen local communities one small business loan at a time. For every deal we fund, we donate 10 meals to Feeding America!
Matt Carrigan is the Content Writer at National Business Capital & Services. He loves spending every day creating content to educate business owners across every industry about business growth strategies, and how they can access the funding they need!