Black-owned businesses continue to grow across the U.S., especially among first-time entrepreneurs and solo founders turning skills into income. But while the number of Black entrepreneurs is rising, access to startup and growth capital remains one of the biggest obstacles to long-term success.
That’s where business grants often come into the conversation. Unlike loans, grants don’t need to be repaid, which makes them especially valuable for entrepreneurs who want to launch their business without having to take on large amounts of debt. Business grants come in a wide variety of shapes and forms, including multiple grants that are intended specifically for Black business owners. At the same time, grants can be competitive, limited in scope, and sometimes misunderstood.
In this guide, we’ll break down what Black business grants actually are, how they work, and which grants for Black business owners are worth exploring when starting or growing a business.
What are business grants and how do they work?
Before diving into specific programs, it helps to understand how business grants function and what most grant providers expect from applicants.
What is a small business grant?
A small business grant is funding that does not need to be repaid. Unlike loans or credit lines, grants are awarded with no expectation of repayment, and they also do not require you to hand over any equity in your business.
Business grants are typically offered by:
- Government agencies
- Nonprofit organizations
- Corporations and private foundations
Most grants are designed for specific purposes. For example, some grants are designed to encourage the growth of new businesses in specific industries like agriculture or biotechnology, while others are offered specifically to entrepreneurs from underrepresented communities.
How business grants work
Grants are almost always application-based and competitive. That means:
- You must meet specific eligibility requirements
- Applications are reviewed against others, not approved automatically
- Only a limited number of businesses receive funding
In many cases, grant funds are restricted to approved business uses (such as equipment, marketing, payroll, or operating expenses). Many programs also require you to demonstrate how the funds were used via basic reporting.
Are grants really “free money”?
Grants don’t require repayment, so, in that sense, they are “free money”. However, they are not effortless.
Applying for grants takes time, preparation, and attention to detail. There’s no guarantee of approval, and many strong applications don’t get funded simply due to limited budgets. And if you do manage to get approved for a grant, it often comes with some strings attached regarding how the money must be spent.
Grants exist to support broader goals like entrepreneurship, job creation, and economic development, not just to support individual businesses. Understanding that purpose will help set realistic expectations and can also help you frame your applications in a way that increases your likelihood of approval.
Why business grants for Black entrepreneurs exist
Many grants for Black-owned businesses exist due to the fact that Black entrepreneurs have historically faced barriers to traditional financing. From lower approval rates for bank loans to wealth gaps that reduce access to startup capital, there are plenty of challenges that Black business owners have faced. By offering grants to Black business owners, the federal agencies, nonprofits, and private companies that fund the grants are attempting to address these challenges and help level the playing field for Black entrepreneurs.
Some grants are exclusive to Black entrepreneurs. Others prioritize minority-owned or underserved businesses without being race- or gender-exclusive.
It’s also important to clarify terminology. Many programs marketed as “grants” are actually:
- Loans
- Accelerators
- Pitch competitions
- Investment programs requiring equity
A true grant does not require repayment or ownership in your business. Still, some non-grant programs may appear in searches for business grants for Black men or women, so reading the fine print is important.
Top small business grants for Black business owners
Ready to start applying for grants and chasing your dreams as a business owner? Here are some of the top grants available to Black-owned businesses across industries:
Black Ambition Prize (Pharrell Williams)
Founded by Pharrell Williams, this national competition supports Black and Hispanic entrepreneurs with scalable business ideas. Winners receive significant cash grants as well as mentorship, exposure, and access to investors.
This program is highly competitive and best suited for businesses with strong growth potential rather than early-stage side hustles.
Wish Local Empowerment Program
Wish’s Local Empowerment Program provides grants to Black-owned brick-and-mortar businesses, particularly retail and consumer-facing companies. In addition to funding, recipients may receive promotional support through the Wish platform.
This grant is a good fit for Black entrepreneurs who are looking to either start a brick-and-mortar business or raise capital to expand the operations of their existing brick-and-mortar business.
The Freed Fellowship Grant
The Freed Fellowship offers grant funding as well as business education and mentorship. While the program is not exclusive to Black entrepreneurs, it does explicitly encourage minority-owned businesses to apply.
The Freed Fellowship Grant primarily focuses on long-term sustainability rather than short-term revenue boosts. This makes it ideal for business owners who are looking for ongoing, structured support.
Feed the Soul’s Restaurant Business Development Grant
This grant program is specifically for Black-owned food and restaurant businesses. It’s designed to help these businesses support their operations, pursue expansions, and, in some cases, maintain stability during challenging periods. For restaurant owners faced with high overhead costs and slim margins, it can be a great source of funding.
National Minority Supplier Development Council (NMSDC) – Growth Initiative
The NMSDC supports certified minority-owned businesses through funding opportunities, corporate partnerships, and access to enterprise-level contracts.
This program is best suited for established businesses looking to scale and work with large corporate buyers.
Top small business grants for Black women
Black women are one of the fastest-growing groups of entrepreneurs in the country, yet they often face even greater funding gaps. These small business grants for Black women focus on closing that divide:
Goldman Sachs “Black in Business”
This initiative provides business education, coaching, and access to capital for Black women entrepreneurs. While not all participants receive direct grants, the program improves access to funding and long-term growth opportunities.
Due to its emphasis on education and support rather than just funding alone, it is especially helpful for founders looking to strengthen business fundamentals.
HerRise Microgrant
HerRise is a monthly microgrant program for women of color entrepreneurs. Grants are typically smaller but more accessible than large national competitions.
In addition to funding, recipients gain visibility, community support, and networking opportunities.
Pathway to Opportunity
Pathway to Opportunity supports Black women founders through grants and business development resources. Programs often include mentorship, coaching, and access to additional funding opportunities beyond the initial grant.
This program is a great fit for early-stage founders who want guidance in addition to capital.
What to do before applying for grants for Black-owned businesses
As we’ve already mentioned, grants can be highly competitive. The road to success begins long before you submit an application, and preparation matters just as much as the application itself.
Start by making sure your business is properly formed. This typically means choosing a business name, registering with your state, and obtaining an EIN from the IRS. You’ll also need to choose a structure for your business, whether that’s an LLC, a corporation, or a partnership.
Next, make sure you have all your business information ready to provide in case it is required for an application. This includes your business registration documents, ownership information, basic financial details, and a clear description of the products or services your business provides.
Lastly, make sure you understand the grant’s compliance requirements (and be ready to prove that you qualify). This can mean things like proving minority or woman-owned status, obtaining specific certifications, and agreeing to use the funds for only approved expenses.
Tips for grant applications
When you’re ready to apply, here are a few practical tips to give yourself the best possible chance of being approved:
- Be specific about how grant funds will be used
- Review eligibility requirements carefully before applying
- Prepare documents in advance, including registration and EIN
- Follow instructions exactly; small errors can sometimes disqualify applications
- Track deadlines and application windows
- Prioritize clarity, readiness, and alignment with the program’s mission over flashy language or perfect writing
Conclusion
Grants for Black business owners can be a valuable funding resource for entrepreneurs who want to grow without having to take on debt. Understanding how grants work (and why they exist) helps set realistic expectations from the start.
While grants are competitive, preparing properly and applying consistently will increase your chances over time. Exploring multiple programs, including business grants for Black women and broader minority-focused initiatives, often opens doors to funding and long-term support.
Just remember: persistence matters. With patience and the right approach, grant funding can be a key part of a sustainable growth strategy for Black-owned businesses.