<< Small Business Loans for Immigrants in the U.S.: What You Need to Know>> 10 Ways to Find Funding for Your Business in the U.S.
 

The average new business owner spends $40,000 during the first year to launch their business and keep it running, according to research conducted by Shopify. That high price tag shouldn’t stop you from pursuing your dream of opening your business, though.

Most business owners don’t fund their startups out of pocket. Instead, they take advantage of multiple sources of funding to raise the money needed to launch and operate their companies. Grants for immigrants are one potential source of funding, including federal or state business grants.

Here, we’ll take a look at different types of business grants and how to apply to and qualify for them.

Business Grants

What is a grant?

A grant is when a government entity, a nonprofit organization, or a for-profit company awards a lump sum of money to an individual, business, or organization. Unlike loans, grants don’t usually require repayment as long as you use the money in the way your application specified.

To get a business grant in the U.S., you typically need to complete an application. Competition for funding is often high, which means you’re not guaranteed to receive a grant just because you apply.

Can immigrants qualify for small business grants for minorities?

Some small business grants are specifically for members of minority groups. The purpose of these grant programs is to encourage entrepreneurship and provide economic opportunities for minorities.

A minority group is defined as “a culturally, ethnically, or racially distinct group that coexists with a more dominant group.” Five major minority groups in the U.S., according to the United States Office of Minority Health, are:

  • Hispanic and Latino Americans
  • Black and African Americans
  • Asian Americans
  • Native Americans and Alaska Natives
  • Native Hawaiians and other Pacific Islanders

If you’re a business owner who fits into one of these groups, you may qualify for minority business grants from the U.S. government, from brands that back minority grants, or banks with such programs.

There are a couple of other ways your business can qualify:

  • Minority individuals own at least 51% of the company or 51% of stocks
  • Minority individuals are responsible for managing the company and overseeing daily operations

Types of federal grants for immigrants

Federal grants are funded either entirely or partially by one or more units of the U.S. federal government. Some federal business grants to consider are below.

USDA Rural Business Development Grant Program

The U.S. Department of Agriculture (USDA) grant program provides money for launching and expanding small businesses in areas that the government defines as rural. You may qualify for one of these small business grants if:

  • You live in a rural area
  • You have 50 or fewer employees
  • You earn less than $1 million in gross annual revenue

The money obtained from a USDA Rural Business Development Grant can be used for training, technical assistance, buying or developing land, and other business purposes.

Business Grants

NIH SEED Grants

If your business is involved in healthcare research and development, you may qualify for NIH Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) grants through the SEED program sponsored by the National Institutes of Health (NIH).

The purpose of these grants is to provide funding for entrepreneurs who hope to make advancements in medical science. Some examples of companies who have received NIH SEED Grants include: RIVANNA who created a handheld ultrasound device that guides epidural placement, Cell Podium who created video messages to improve public health during crises, and REESSI who designs games that empower youth.

Wilson-Fish (WF) Program

The Office of Refugee Settlement administers the Wilson-Fish (WF) program for refugees who are resettled in the United States through the Office of the Administration for Children & Families of the U.S. Department of Health and Human Services.

Periodically, the program provides funding opportunities that include grants for immigrants with resettled refugee status. Eligibility requirements for these business loans vary.

Microenterprise Development Program

The Office of Refugee Settlement also sponsored this program. It provides financial help and support for resettled refugees to:

  • Develop business plans
  • Receive training in management
  • Learn about bookkeeping
  • Create business marketing plans

Refugees who are not yet citizens are eligible for this grant, but the program prioritizes refugees who have been in the U.S. less than five years.

Before receiving a loan, applicants will have to complete training provided by the Office of Refugee Settlement on how to start and manage a small business and prepare a business plan.

Program for Investors in Microentrepreneurs 

The SBA sponsors the Program for Investors in Microentrepreneurs (or PRIME) which provides funding for entrepreneurs who come from economically disadvantaged backgrounds. This includes people who are not immigrants, but PRIME also provides grants for immigrants specifically.

Each year, the SBA awards roughly $5 million to small businesses. The amounts of the individual grants vary, and you will need to clearly explain how you will use the money for your application to be considered.

Minority Business Development Agency

The Minority Business Development Agency (MBDA) sponsors many programs for minority-owned businesses in the U.S.

Although the agency does not often offer grants for immigrants directly, it can help you find private lenders that provide business loans for immigrants. In addition, the MBDA offers assistance with securing contracts and compiles information about small business grants for immigrants and minorities.

Grants.gov

The Department of Commerce, the U.S. Small Business Administration (SBA), and other divisions of the federal government introduce new grant programs regularly.

Grants.gov is a database that allows you to search all the grant programs currently accepting applications and find specialized grants that may not have been on this list.

How to apply for federal grants

You must have a D-U-N-S Number for most federal grant programs. This number is issued by Dun & Bradstreet, a credit reporting bureau for businesses. If you have already taken out a business loan, you may already have a number. You can find your number or apply for a new one by visiting the Dun & Bradstreet D-U-N-S Number website.

If you don’t already have a number, it may take up to 45 days to assign you one. There is no fee to receive one; however, you can expedite the application process by paying $250.

Applying for federal grants through Grants.gov also requires System for Award Management (SAM) Registration. The system is designed to vet companies that do business with the federal government, but it is also used as part of the screening process for federal grants. You can register with SAM online. Once approved, you can apply for grants through Grants.gov for 12 months. Then, you will need to reapply to continue to use the system.

Types of state business grants for immigrants

State business grants for immigrants are funded either entirely or partially by state governments in the U.S. and provincial governments in Canada. Opportunities vary widely from state to state.

You can contact your state’s Department of State for more information about which grants are available or check out our guides below about opening a business in specific states and provinces.

Business Grants

Nonprofit and other small business grants for immigrants

Nonprofit organizations and some for-profit companies offer small business grants for immigrants and minorities. Some programs available are listed below.

National Association for the Self-Employed Growth Grants

The National Association for the Self-Employed (NASE) offers grants of up to $4,000 for active members of the association. Membership fees begin at $11.95 per month and $120 per year (2022).

Self-Employed Growth Grants from NASE are reserved for business owners who wish to grow their existing enterprises. As a result, these grants are not for immigrants who want to start a new business. However, you can use the funds from this grant during your first year of operation for marketing, advertising, expanding, or hiring new employees.

FedEx Small Business Grant

Each year FedEx provides grants of up to $50,000 for 12 small businesses.

Your business must:

  • Be for-profit
  • Employ less than 99 employees
  • Be in operation for at least 6 months

The FedEx Small Business Grant contest is a general program open to everyone and doesn’t specifically provide grants for immigrants or minorities. However, previous winners have come from a diverse range of backgrounds.

Operation HOPE

Operation HOPE is a nonprofit that supplies free business coaching for small business owners. When you sign up, you gain access to a 12-week training program about small business development.

The program introduces various business grants that provide funding for new and established businesses and provides assistance in completing the application processes.

Fast Break for Small Business

LegalZoom sponsors the Fast Break for Small Business program in cooperation with the NBA, WNBA, and NBA G League. Twice per year, the program accepts applications from businesses owned by minorities, underserved, or underrepresented individuals.

Recipients get $10,000 they can use to grow their businesses as well as $500 in free LegalZoom services.

Other ways to fund your business

Business grants are just one of the ways that you can fund your startup. You may also qualify for small business loans.

Business loans provide either a lump sum of money or access to a line of credit that you can draw from as needed. You repay the amount that you borrow plus interest according to a schedule that you agree upon with the financial institution. Banks, equipment wholesalers and retailers, merchant services providers, and other entities offer various types of small business loans for immigrants.

Beyond loans and grants, there are alternative sources of funding available, such as crowdfunding and angel investing. Learn about these different ways to find funding for your business to explore other options that can help keep your debt down.

This publication is provided for general information purposes only and is not intended to cover all aspects of the topics discussed herein. This publication is not a substitute for seeking advice from an applicable specialist or professional. The content in this publication does not constitute legal, tax, or other professional advice from Remitly or any of its affiliates and should not be relied upon as such. While we strive to keep our posts up to date and accurate, we cannot represent, warrant or otherwise guarantee that the content is accurate, complete or up to date.