Becoming a certified minority-owned business opens your horizons up to a whole world of resources, contracts, and opportunities by granting you access to databases of suppliers and customers, exposing you to more work opportunities from both government and private entities, and providing you with access to training and workshops that promote the growth of your company.
Let’s take a closer look at minority-owned business certifications, their benefits, eligibility requirements, and steps you can take towards certifying your business today.
There are many advantages to certifying your minority-owned business. By certifying your business, you’ll gain access to helpful resources that will help grow your business and boost your credibility, like specialized trainings and workshops, networking opportunities, and catered customer and client databases that span both the public and private sector
To qualify as a Minority Business Enterprise, your company must be at least 51% owned and operated by someone who is a U.S. citizen and represents at least one of the following minority groups:
You must be of at least 25% descent from one of these groups to qualify. If the company is publicly traded, there may be additional requirements that regulate the diversity of employees or shareholders.
Benefits of Becoming Certified as a Minority-Owned Business
While the certification process can be challenging, the benefits far outweigh the costs. These include access to training and mentorship, a more expansive network, opportunities to win government contracts, opportunities to increase business partnerships, and even improved customer relationships. Let’s take a closer look at each of these to see how they work with your minority-owned business certification.
Certification grants you access to valuable resources that include training workshops and mentorship programs designed to provide the guidance and knowledge to drive your business forward.
The National Minority Supplier Development Council (NMSDC) offers opportunities such as:
The Small Business Association likewise offers the 8(a) Mentor-Protégé program to provide mentorship and oversight, in addition to technical assistance, guidance in financing, and trade education.
Both the SBA and NMSDC provide periodic networking opportunities to allow minority business owners to connect to one another and exchange ideas that can strengthen their companies.
The SBA’s Emerging Leaders Initiative operates in multiple locations nationwide. Its stated aim is to support business growth in historically underserved communities.
In the post-COVID era, many business owners are able to take advantage of virtual events, allowing them to connect with other emerging leaders from the convenience of a computer or mobile device.
As a certified minority-owned business, you’ll be better poised to secure funding through government contracts. For instance, the SBA 8(a) designation allows you to compete for “set-aside” contracts, as well as “single-source” contracts, the latter of which can be awarded without a bidding process.
Likewise, the Minority Development Business Agency (MDBA) provides grants and contracts to minority-owned businesses, with over 1,000 grant programs to choose from.
Larger corporations are increasingly making commitments to diversity and inclusion, including companies like AT&T and UPS. As an MBE, you’ll have a greater opportunity to do business with some of America’s corporate giants, many of whom have made public financial commitments to supporting minority businesses.
By certifying your minority-owned business, you’re helping connect yourself with like-minded businesses and becoming part of a bigger community with access to the kinds of prospective customers that will best benefit from your products and services. And people love supporting others within their communities–especially local and minority-owned businesses. In fact, a recent survey has shown that one of every five American consumers intentionally sought out small businesses during the 2020 holiday shopping season.
Before we show you how to get certified as a minority-owned business, let’s go into greater detail about the eligibility process for becoming an MBE.
The most common national certifier is the National Minority Supplier Development Council (NMSDC). Here is a little more information on their process for minority-owned business certification.
According to the NMSDC, your business is eligible for certification as long as you are a for-profit business and the company is at least 51% owned by someone representing one of the minority groups listed above.
The business must also be located in the U.S. territories and owned by a legal U.S. citizen.
During the certification process, the certifying organization will look for the following qualifications:
To qualify as a minority for the purposes of certification, you must be at least 25% African American, Asian American, African-American, Hispanic-American, Asian-American, Pacific Islander, or Native American.
The NMSDC is very firm about requiring U.S. citizenship, but it may be possible to find local MBE certification programs that will accept other forms of legal residency (such as green cards).
If your company meets the eligibility criteria listed above, you may apply for minority-owned business certification. Most businesses will certify through either the NMSDC or the SBA, though there are also many state, city, or local programs that can help you achieve certification as a minority-owned business.
The application process will look a bit different for each certifying agency, but you should generally expect to present some basic information about your business (business history, operating agreements, etc.) as well as the principals (resumes, identification, etc.).
The applications can be completed online, though, as we’ll see, the process isn’t always straightforward. Let’s go into greater detail about how to apply for minority-owned business certification so you can be prepared for the process.
MBE certification is available through several avenues. Most commonly, you can receive certification through such agencies as:
Each of these agencies will have slightly different application and eligibility requirements. We’ll go into greater detail below to help you learn how to get certified as a minority-owned business at each agency.
First, let’s see how to get certified as a minority-owned business through the NMSDC.
Start local. Find your regional affiliate, who can show you how to apply for minority-owned business certification through the NMSDC website and ensure you comply with the organization’s standards.
During the application process, you’ll need to provide the following:
The NMSDC may require additional documents depending on your company’s structure. Your local affiliate can help you in this process.
When gathering a lot of documents, business owners use a secured Google Drive so they can quickly access them for any future applications. Google Workspace is a great tool not only for storing documents but also for a quick chat with your team and email.
Certification fees can range from $350 to $1,200, depending on your regional affiliate, who will assess your revenue and assign a fee based on this assessment.
The certification process can take as long as 90 days to complete. If your business is approved, you’ll receive notification by email as well as a letter from the U.S. Postal Service.
Here’s a quick overview of how to get certified as a minority-owned business through the SBA:
Start with the SBA’s online preliminary assessment tool. This will help you determine your eligibility before diving into the full application.
During the application process, you’ll be required to submit documentation that demonstrates the following:
The SBA will also evaluate your business history and time in business to determine final eligibility.
SBA certification is free, though you won’t have the assistance provided by the NMSDC, so you’ll need to invest some time into the application process.
Business owners can expect to receive a letter from the SBA within 90 days letting them know whether they’ve been approved.
Many states have their own local certification programs. To find out whether there’s a program near you, visit the website for the National Conference of State Legislators.
Now that you know how to get certified as a minority-owned business, there might be some additional questions you’re curious about. We’ll cover other common questions below:
Women-owned businesses are not presently classified as MBEs. However, female entrepreneurs can consider separate designations, the most common include:
These programs are similar in that they will provide opportunities for networking, resources, and other opportunities to help underrepresented groups thrive in business.
How long does MBE certification last? This actually depends on the agency through which you obtained your certification.
The NMSDC requires recertification each year, following the procedures on their website. Some local agencies allow certification for as long as three years, though they distinguish between renewal (where you pay a fee to maintain certification) and recertification (where you submit another application).
Securing the future of your business is made so much easier when you have the right resources. Fundid is one tool businesses like yours can use to finance growth through our business line of credit that allows you to convert card balances to fixed-rate microloans. You can join the waitlist for our Business Building Card here and use other tools like our Grant Match Program and our Grant Marketplace to find grants to grow your business.