How to Become a Minority Certified Business

If your business is majority minority-owned (51% or greater), you can take advantage of various programs created to benefit minority-owned companies. Once you’re registered as a minority-owned business, it’s likely that more corporations, the federal government, and state agencies will want to do business with you. 

 

 

Why Getting Certified as a Minority Business is a Good Idea

Certified or qualified, minority-owned businesses have several advantages:

  • Certain government bodies state that the organizations they fund must award some of their contracts to businesses owned by minorities. 
  • Corporations understand that minority businesses have a lot of purchasing power, and want to appeal to those customers.
  • Federal agencies know that supporting minority businesses is good for the economy, especially in underdeveloped areas.

Here’s how to register for and get certified by some of the major minority business programs.

 

 

National Minority Supplier Development Council

The National Minority Supplier Development Council (NMSDC) connects minority businesses with corporations and other organizations that want to purchase their products and services. They have an extensive database with thousands of registered minority-owned businesses and corporate customers. 

If you want to be eligible for the NMSDC, you must meet the following qualifications: 

  • More than half of your business must be owned by a U.S. citizen who is Asian, Black, Hispanic, or Native American. 
  • If you’re a publicly owned business, then minority individuals must own at least 51 percent of the company equity. 
  • Be a for-profit enterprise
  • The day-to-day operations of your business must be primarily managed by minorities (51% or greater).

Documents Required by the NMSDC

The NMSDC requires extensive information and documentation before certifying a business. While the exact documents you’ll need to provide will vary based on the type of business you run, the NMSDC website includes the following list as a starting point:

  • “The History of the Business.”
  • Certificate of Incorporation / Articles of Incorporation.
  • Stock Certificates and Stock Ledger.
  • Minutes to Board of Directors meetings as well as Shareholder’s meetings.
  • Bylaws (executed and attested) and Amendments (if applicable).
  • All agreement(s) pertaining to ownership, operation, and control of the business.
  • Business cards that list appropriate corporate titles, copies of resumes, copy of driver’s licenses and proof of US Citizenship (Birth certificates or U.S. Passports only) for all Principals.
  • Corporate Bank Resolution Agreement(s) to include Bank Signature Card(s).
  • Business Lease Agreement(s) (and Security Deeds if home-based).
  • Proof of general liability insurance and in some cases bonding.
  • Copies of the businesses’ cancelled checks.”

How to apply to the NMSDC

You will need to register on the NMSDC website before you start your application. Once you’re registered, simply go through the step-by-step process and enter or attach all of the required information. You will need to pay the NMSDC fee to send your application for processing. 

Once everything has been properly submitted, the NMSDC Certification Committee will review your application. Your application will be submitted to the Board, along with a recommendation on whether you should be accepted or not. If you’re approved, the NMSDC will let you know by letter and email. If you’re not approved, you can send in a letter of appeal. The entire certification process can take up to 90 days.

 

SBA 8(a) Business Development Program for Minority-Owned Businesses

The Small Business Administration (SBA) has a special development program for awarding public set-aside and sole-source contracts to minority businesses. Qualified businesses can also receive guidance from a federal contracting specialist, form joint ventures with other businesses, and get training and support with many aspects of running an organization. 

If you want to apply for the 8(a) special development program, you must be a small business that is at least 51 percent owned and controlled by U.S. citizens who are “economically and socially disadvantaged.” 

The SBA classes the socially disadvantaged in several ways, but for minority businesses, it mainly means individuals who are Black, Hispanic, Native American, Asian-Pacific, or from the Asian Subcontinent, and people from other backgrounds may also be considered. Economically disadvantaged refers to socially disadvantaged people “whose ability to compete in the free enterprise system has been impaired.”

In most cases, applicant businesses must also have been operating for at least two years and submit tax returns to show a “potential for success”.  You can find out if you’re eligible for the 8(a) Business Development Program by answering a few questions on their website. 

You will need to provide a variety of information, including business formation forms, tax returns, financial statements, bank agreements, and various other documents depending on your type of business. Once you have everything, you can apply through the Certify SBA website. There is no fee to apply.

 

Department of Transportation DBE Programs for Minority-Owned Businesses

The Department of Transportation (DOT) requires that some of its funds are used to support minority-owned businesses. Organizations that get funding from the DOT must create “Disadvantaged Business Enterprise” (DBE) programs

Like the SBA, the DOT states that the programs apply to, “for-profit small business concerns where socially and economically disadvantaged individuals own at least a 51% interest and also control management and daily business operations.” They use similar criteria to the SBA to determine social and economic disadvantages.

Businesses must apply for DBE certification at the state level (the SBA provides a contact list depending on where your business is located). You will need to provide a variety of information including your type of business, income, ownership, control, inventory, assets, and various other factors. You can learn about the type of information they request from the application form

 

State and Local Agency Programs for Minority-Owned Businesses

The three programs we’ve listed above are the most common national programs, but many states and local governments operate their own certifications and qualifications for minority-owned businesses. Your best starting point will be a web search for “[State Name] Minority-Owned Business Programs.” Each of these programs will have unique eligibility and application requirements.

Whatever the nature of your minority-owned business, certification is an excellent standard to aim for. You’ll get access to new partners, suppliers, and customers, and can compete on contracts which will boost your bottom line. And as always, you can reach out to our community of partners to find additional resources for your minority-owned business, and apply for a loan from one of our community lenders.

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