Almost every entrepreneur is familiar with how challenging funding a new small business can be. The challenge is often especially difficult for Latino entrepreneurs, however, who often have less access to capital as they try to build generational wealth. One potential source of funding that may help are Hispanic small business grants.
Hispanic business grants have eligibility requirements that must be met, and the application process for many grant programs is competitive. If you’re able to secure one of these grants for Hispanic businesses, the funds provided don’t have to be repaid. That’s a huge help when struggling with capital-raising challenges.
What are business grants and how do they work?
The following guide is for Latino business owners. You’ll learn more details about grants and the application process, and we have a list of some top Hispanic small business grants to consider.
What is a small business grant?
A small business grant is a financial award that doesn’t have to be repaid. It’s awarded via a competitive process, which typically requires proving eligibility and explaining how the award would aid your small business.
Government agencies, nonprofit organizations and private companies offer Latino business grants in order to support the Hispanic community’s development. These organizations award grants in order to support Latino entrepreneurs, businesses and communities.
In addition to the major Latino grant programs we’ve listed, you may also find state or regional programs in your area. Check with state agencies, local chambers of commerce, and Hispanic-focused nonprofits.
How business grants work
The process of securing a grant is rarely as simple as filling out a form and receiving a check. Instead, there are specific criteria that must be met and requirements that must be followed.
- Eligibility: The vast majority of grant programs are restricted to businesses that meet specific eligibility criteria. The programs listed here are limited to or prioritize Hispanic businesses, and many have additional criteria too.
- Application: Grant programs require applications, and many are competitive. The major national grants tend to be the most competitive. Smaller state and local grants might be easier to win. You should consider all grant options for the best chances of securing funds.
- Use: Many grants are “purpose-bound,” meaning that the funds are awarded for a specific use. Initial requirements will be found in the application criteria, and their applications usually include particular details about how funds will be used to meet these criteria. (A few grant programs aren’t purpose-bound, or have a very general use requirement.)
- Reporting: It’s common for grants to require reporting in the future. You might need to submit an “impact report” months or years after receiving a Hispanic business grant, or maybe just receipts showing that the grant was spent as intended.
Are grants really “free money”?
The best way to explain a grant’s funding is that the financial amount awarded doesn’t need to be repaid. A grant is “free money” in this sense. There often are a few associated costs, though.
The primary associated cost is simply time. It takes time to research and apply for business grants, and compiling reports takes time too. There can be some minor costs associated with compiling reports.
Larger grant programs that have extensive requirements might allow you to include these costs within your application. For example, you might be able to include the costs of a future economic impact study. Employee wages for the time required to compile an extensive report could be another eligible expense. Small grants are less likely to include such costs.
Furthermore, keep in mind that grants aren’t guaranteed. Even a highly competitive application might not win, there are many Hispanic entrepreneurs with promising business ideas.
Note: Be sure to use any grant for its intended purpose, and according to any particular details included in your application. Not adhering to requirements could result in the funds having to be repaid. You won’t need to repay so long as you adhere to requirements.
Why small business grants for Hispanic entrepreneurs exist
Government agencies, nonprofits and private companies offer Latino grants to economically support the Hispanic community.
Despite inequalities in traditional funding access, Hispanic-owned businesses are one of the U.S. economy’s fastest-growing segments. Grant programs are one way to address these inequalities that Hispanic (and other minority) business owners face.
It’s important to keep in mind that grants are just one type of capital. Capital can come from grants, pitch competitions, investments, loans or some other sources. Be aware that some online “grants” are actually loans or other sources that can require repayment or giving up some ownership. True grants don’t have to be repaid, and certainly don’t take a profit-sharing or equity portion from your business.
Top small business grants for Hispanic business owners
Below are true small business grants for Hispanic business owners and Latino entrepreneurs. Some are restricted to only Hispanic small businesses, while others are for minorities and may prioritize Latinos. You should also check for smaller grants from state or local sources.
Founders First CDC – National Grant
Founders First CDC offers a national grant program for minority founders who already have a small business. The goal is often to accelerate the growth of an established business. Any awarded grants also include a scholarship for the nonprofit’s business accelerator program, along with a cash award.
Hispanic Federation – Communities of Color Nonprofit Stabilization Fund
The Communities of Color Nonprofit Stabilization Fund provides funding and technical assistance for Latino entrepreneurs. Awardees often receive coaching and training related to the grant’s purpose. This can be a great help when trying to maximize the impact that a grant has, both on your business and your community.
Eligibility and funding amounts vary depending on the current program cycle. Check the Hispanic Federation’s current business grants for Latinos to see what’s available right now.
The Freed Fellowship
The Freed Fellowship is a monthly “microgrant” available to entrepreneurs of color and female entrepreneurs. This is a monthly award of $500, and one recipient receives a year-end $2,500 grant. You can apply each month (unless you win).
Although $500 is small compared to some of these other programs, there are no purpose-bound stipulations. The microgrant can be used for a wide range of immediate expenses.
USHCC – Local Chamber Grant Program
The U.S. Hispanic Chamber of Commerce (USHCC) is an umbrella organization for more than 250 local chambers of commerce. The organization is a great way to connect with other Latino business owners, and to see what regional or local opportunities are available for Latinos.
The USHCC is one of the best ways to check if there are any local or regional grants for Hispanic business owners. You might also learn about funding initiatives or corporate partnerships that could help.
Hello Alice (Minority-Owned Business Grants)
Hello Alice is a grant discovery and application platform that publishes grant opportunities and recommends funding based on a business profile.
This is another great way to discover more national, regional and local grants tailored for your business. To search specifically the grants for Hispanic businesses, use the minority-owned business filter. You’ll find this and other criteria options on the platform’s search.
Because Alice is a search platform and not a grant-issuing agency, search results will return many different grants that vary in amounts, purposes and application processes.
Top small business grants for Hispanic women
Latina founders often qualify for both minority-focused and women-focused funding. Here are some of the top business grants for Hispanic females.
Digital Undivided – BREAKTHROUGH
Digitalundivided’s BREAKTHROUGH program supports women of color entrepreneurs, including Latinas. Most recipients have a business model or idea that’s scalable. In addition to a financial award, winners also receive mentorship and become part of a cohort. Most grants are for $5,000.
The LULAC Latina Entrepreneur Academy
The League of United Latin American Citizens (LULAC) hosts an entrepreneurship academy specifically for Latinas.
This “business boot camp” ends with a pitch competition, which is for a grant (as opposed to partnership investment). Academies are regional. The awards and level of competition vary by region and cycle.
LULAC is sponsored by Coca-Cola and T-Mobile, being one example of how private companies support the Hispanic community through business grants.
Chicana Latina Foundation (CLF)
The Chicana/Latina Foundation is best known for scholarships and leadership development programs tailored to Latinas. This is a great resource if you want to better understand business and personnel. The foundation also awards some grants for Latina entrepreneurs.
What to do before applying for Hispanic small business grants
While every small business grant has its own application requirements and process, there are a few common elements. Take care of these basic steps beforehand.
- Business Structure: Choose the right structure for your business. The most common options are sole proprietorship, limited liability company (LLC) or corporation, with LLC being the best option for many small businesses.
- An LLC gives you personal liability protection without being too complicated. It also makes your business more official, and many grants will only go to an LLC or corporation.
- Business Registration: You need to register an LLC or corporation with your state. Registering an LLC is straightforward, especially if you use an LLC formation service. You’ll have to complete Articles of Formation (or an equivalent), and possibly a couple of other simple documents. Registering a corporation is more involved.
- Compliance Requirements: Make sure you understand any compliance requirements that your state has. Many states have an annual reporting requirement for LLCs and corporations. Again, this is fairly simple if you open an LLC.
- Records: Keep accurate and up-to-date business records. These will help you understand your business, and good records are extremely useful when applying for business grants.
Tips for Grant Applications
- Review eligibility requirements, so you don’t spend time applying to a grant program that your business doesn’t qualify for.
- Be clear about how you’ll use the funds (e.g. for equipment, inventory, marketing, hiring, certifications, etc.).
- Prepare basic documents in advance (e.g. officially register your business, obtain an EIN, have current financial records).
- Follow all instructions and meet all deadlines.
Conclusion
Winning a Hispanic business grant can be a highly valuable funding source. For entrepreneurs starting a small business, grants can help offset early costs and provide momentum during critical growth stages. Have realistic expectations for your business’s applications, but do apply for any Latino business grants you can. One or several grant awards can make a huge difference to any business, and doubly so to Hispanic ones. Here’s to your business winning.