How To Get A Minority-Owned Business Certification

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Minority-owned businesses may benefit by getting a minority-owned business certification. The certification can provide access to funding and business resources not otherwise available.

You can find a wide range of agencies to work with for the certification, though each agency has its own requirements. Once certified, it can open doors to exclusive grants, government contracts and other financial opportunities designed for supporting underrepresented entrepreneurs.

What is classified as a minority-owned business?

A minority-owned business is usually defined as a business that is majority-owned — at least 51 percent or more — by a member of a minority community. These communities can include specific racial or ethnic communities, gender communities and sometimes veterans or family members of veterans.

Typically, the owner of this type of business is involved in the business’s day-to-day operations, but eligibility will vary between organizations.

Why should you get certified as a minority-owned business?

Getting a minority-owned business certification has its perks. Certification can help get small business loans or grants and inclusion in supplier’s databases. Other benefits might include:

• Contract connections: Some certification programs offer facilitation options for contracts, giving access to business opportunities.
• Education and development resources: From additional training to technical assistance, some certification programs offer targeted educational resources for minority-owned businesses.
• Networking opportunities: Certification can mean further exposure to thousands of corporations and business ventures. It can also provide opportunities for in-person conferences specifically focused on minority-business development.

Because minority business owners often face discrimination in business lending, giving access to a smaller pool of resources can be a helpful way to make funding more accessible for minority business owners.

How can you get a minority-owned business certification?

Several agencies and organizations offer minority-owned business certifications. Each type of certification has its own specific requirements. They also provide access to different funding and resources.

National Minority Supplier Development Council

The National Minority Supplier Development Council (NMSDC) was established in 1972 to help Asian-Indian, Asian-Pacific, Black, Hispanic and Native American-owned businesses have equal access to wealth-building opportunities through entrepreneurship. The NMSDC offers a certification for minority business enterprises (MBEs). These businesses are at least 51 percent owned by someone who falls into one of the five minority communities the NMSDC serves.

To get an MBE certification, businesses must apply through the regional NMSDC closest to their company’s headquarters. The application can be completed online.

• Eligibility requirements

  • Business owners must be able to show that they are at least 25 percent Asian-Indian, Asian-Pacific, Black, Hispanic or Native American
  • Must be 51 percent or more owned by a qualifying minority group member
  • The business must also have an owner who is a U.S. citizen
  • Be for-profit
  • Management and daily operations must be practiced by the qualifying minority ownership member(s)

U.S. Small Business Administration

The U.S. Small Business Administration (SBA) has multiple programs to help minority-owned businesses and businesses operating in underserved communities. Businesses can get certified to be eligible for the program. You can get an SBA minority-owned business certification through these two key SBA programs for minority-owned businesses.

8(a) Business Development Program

Businesses owned by individuals who are economically or socially disadvantaged can apply for minority-owned business certification through this nine-year program for business development, networking and mentoring.

• Eligibility requirements

  • Businesses must be categorized as a small business
  • Not previously participated in the 8(a) program
  • At least 51% owned by U.S. citizens who are socially and economically disadvantaged
  • Owners must have a personal net worth of $850,000 or less
  • Demonstrate good character
  • Demonstrate the potential for success

HUBZone

This certification is for businesses operating in historically underutilized business zones, and participating in the program helps fuel their business.

• Eligibility requirements

  • Businesses should qualify as small businesses
  • Have their main office in a HUBZone
  • Have at least 35% of its employees residing in a HUBZone
  • Be at least 51% owned and operated by US Citizens, a Community Development Corporation, an Alaska Native Corporation, a Native Hawaiian corporation, a Native American tribe or an agricultural cooperative

Loan approvals for minority-owned businesses

According to the SBA’s lending report, as of October 18, 2023, 49 percent of 7(a) loan approvals have gone to white-owned businesses, and 32.8 percent of funds have been approved for Black-, Hispanic-, Asian-, Native American- and Alaska Native-owned businesses. Eighteen percent of loans approved have gone to those who did not provide their race.

That said, even with racial disparities in SBA loan funding, they are worth considering if a business has trouble securing traditional financing.

Disadvantaged Business Enterprise program with the U.S. Department of Transportation

Another federal agency offering certifications for minority-owned businesses is the U.S. Department of Transportation (DOT). It offers certification through its Disadvantaged Business Enterprise (DBE) program.

The DBE program aims to solve discrimination issues for all its transportation-related contracts. They do this by trying to give businesses owned by socially and economically disadvantaged individuals a fair shot at securing contracts for federally funded transportation initiatives.

• Eligibility requirements

  Qualifying for the DBE certification requires that a business meets the small business size standards and is owned and operated by an individual who is a part of a socially and economically disadvantaged community.

National LGBT Chamber of Commerce

The National LGBT Chamber of Commerce offers the Certified LGBTBE® program, which opens up access for LGBTQ-owned businesses for competitive contracting opportunities.

• Eligibility requirements

  Qualifying for the LGBTBE program requires a business at least 51 percent owned, operated, managed and controlled by an LGBTQ person or persons who are either U.S. citizens or lawful permanent residents. It also requires the business headquarters principally located and formed as a legal entity in the U.S. It also requires the business not be controlled or significantly influenced by a company that is not LGBTQ-owned.

Local and state government certifications

State and local governments may also offer their own minority-owned business certifications that qualify these businesses for certain funding or business resources. Research state or local agencies for minorities in your area to find more local certifications. You could also reach out to your state’s small business association.

What other resources are there for minority-owned businesses?

Getting certified as a minority-owned business can also be a pathway to getting financial assistance through grants or loans specifically allocated for this type of business. There are both federal and private grants earmarked specifically for minority businesses.

For help finding minority-owned business certifications or grants that fit your business best, look to business resources like:

Smaller loan amounts

If you’re not looking to borrow more than $250,000, Accion Opportunity Fund is worth checking out. Accion is a nonprofit that focuses on helping minority and low-income communities obtain financing. They also provide mentoring and educational resources to help small businesses succeed.

Bottom line

Getting a minority-owned business certification can help level the playing field for minority business owners. There are several ways to get certified. Look into all the options to see which certifications you may qualify for and provide you with the most beneficial resources for your business.

Frequently asked questions

• What does it mean to be MBE certified?

  MBE stands for Minority Business Enterprise. Official MBE certification can be obtained through the National Minority Supplier Development Council. This certification is available to qualifying businesses with an owner who is at least 25 percent Asian-Indian, Asian-Pacific, Black, Hispanic or Native American.

• What are the advantages of being a minority-owned business?

  Being a minority-owned business can provide special opportunities for resources and business development. It can also be a way to access government contracts or funding.

• How do you prove minority ownership for a business?

  The exact documentation required depends on the certification program’s specific criteria, but you can expect that you’ll have to submit a number of different documents for proof. This may include IRS forms, financial statements, business formation documents, birth certificates or other forms of government identification.