Minimizing the gap between funding and opportunities imparted to minority-owned businesses compared to others is quite crucial. In addition to this, many programs have been put in place to enable minority-owned businesses to grow. The certificate carried by minority-owned businesses is accessed through special government programs. These programs include government contracts that will give a boost to an otherwise private business.
What are the requirements to qualify as a certified minority-owned business?
Small businesses seeking to acquire a Minority Business Certificate should contact the National Minority Supplier Development Council (NMSDC). NMSDC is an organization that focuses on enhancing the business prospects of certified minority companies and connecting them with members of the corporate industry. For certification, an application can be submitted online and the requirements are:
- The business must be owned by at least 51 percent minorities, that is, it must involve 25 percent: African American, American Indian, Asian American, Alaska Native, Hispanic, or Native American.
- This is confirmed by screening tests and interviews in conjunction with the physical visit.
- The minority owner member (s) must perform the administration and day-to-day operations of the business.
- It must be a for-profit organization located in the US or its fiduciary territories.
What are the benefits of being a certified minority-owned business?
Access to corporate and government contracts:
Under the law, many government organizations are mandated to conduct business with minority-owned businesses. Therefore, it is mandatory to buy a specified minimum percentage of the goods from them. Contrary to this, a significant number of organizations are eager to start business with them, even if these companies are not mandated to do so. These businesses are well known for the advantages of purchasing the goods and services from certified minority-owned businesses. This certificate imparts a way to differentiate a specific company from other competing providers. In addition to this, these companies also receive the information from the companies and government organizations that want to buy the supply needs of the certified companies. This list thus initiates your focus on interested customers.
According to the research, if access to debt and equity is measured among minority-owned companies and, otherwise, the minority is the one that is private. Therefore, many programs are launched to minimize this gap in funding. To get the benefit of these programs, you need to be certified. If the programs do not require it, this certificate elevates and legitimizes the status of a company.
A dedicated Equity Financing Provided group can structure a company’s equity investment. Companies are mandated to obtain certification in order to benefit from it. Today, many equity investors keep a percentage of the capital to invest in Certified Companies considering the benefits of doing so.
A large amount of Debt Financing is also enabled for these companies. To access these loans, the company must have a certification such as Equity Financing. Therefore, these loans offer the lowest interest rate conditions compared to the general interest rate imposed and the most relaxed collateral requirements. Many organizations also award grants to support these businesses.
Promotion of training opportunities and networks:
Through Certification, a minority business is empowered through training programs and networks. These programs will prove useful to them as they expand their reach to new clients and at the same time impart the best practices necessary for a successful endeavor. Along with online courses, many conferences and events are organized that improve business processes and earnings.