How to Get Certified as a Minority-Owned Business

Becoming a certified minority-owned business opens your horizons up to a whole world of resources,...

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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.

Why Should You Become a Certified Minority-Owned Business?

There are many advantages in 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 

What Does It Mean to Be a Minority Business Enterprise?

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:

  • African American
  • Asian American
  • Pacific Islander
  • Latinx or Hispanic
  • Native American

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. Among these are included 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.

Access to Training and Mentorship

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:

  • Training seminars
  • Business opportunity fairs
  • Business education programs
  • Access to specialized financing and loans
  • Networking events

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.

A More Expansive Network

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.Opportunities to Win Government Contracts

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.

Opportunities to Increase Business Partnerships

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.

Improved Customer Relationships

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. 

Does Your Business Qualify?

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.

Who’s Eligible?

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 who represents 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.

Qualifications for Getting Certified

During the certification process, the certifying organization will look for the following qualifications:

  • You operate a for-profit business
  • Your business is located in the U.S. or its territories
  • You are a legal U.S. citizen
  • Your company is at least 51% owned by a minority
  • For public businesses, minorities must own 51% of the stock shares

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).

How to Get a Minority-Owned Business Certification

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.

Who Certifies Minority-Owned Businesses?

MBE certification is available through several avenues. Most commonly, you can receive certification through such agencies as:

  • The National Minority Supplier Development Council (NMSDC)
  • The U.S. Small Business Administration (SBA)
  • State, city, or local programs

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 of these agencies.

National Minority Supplier Development Council (NMSDC)

First, let’s see how to get certified as a minority-owned business through the NMSDC.

What Is the Application Process Like?

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.

What Documentation Do You Need to Apply?

During the application process, you’ll need to provide the following:

  • Business history
  • Articles of incorporation (if applicable)
  • Resumes, driver’s licenses, and proof of citizenship of principals
  • Business cards listing titles of principals
  • Proof of general liability insurance
  • Ownership and operation agreements
  • Lease agreements/security deeds
  • Canceled business checks

The NMSDC may require additional documents depending on your company’s structure. Your local affiliate can help you in this process.

Does It Cost Money to Get Certified?

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.

How Long Does the Process Take?

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.

Small Business Administration (SBA)

Here’s a quick overview of how to get certified as a minority-owned business through the SBA:

What Is the Application Process Like?

Start with the SBA’s online preliminary assessment tool. This will help you determine your eligibility prior to diving into the full application.

What Documentation Do You Need to Apply?

During the application process, you’ll be required to submit documentation that demonstrates the following:

  • The owner’s net worth and annual adjusted gross income are each less than $250,000
  • The owner has less than $4 million in total assets
  • “Good character” can be demonstrated by all principals

The SBA will also evaluate your business history and time in business to determine final eligibility.

Does It Cost Money to Get Certified?

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.

How Long Does the Process Take?

Business owners can expect to receive a letter from the SBA within 90 days letting them know whether they’ve been approved.

State and Local Certification Programs

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.

Other Frequently-Asked Questions

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:

Do Women-Owned Businesses Qualify as Minority Business Enterprises?

Women-owned businesses are not presently classified as MBEs. However, female entrepreneurs can consider separate designations, the most common include:

  • Women Business Enterprise
  • Women-Owned Small Business

These programs are similar in that they will provide opportunities for networking, resources, and other opportunities to help underrepresented groups thrive in business.

Do You Have to Renew Your Minority-Owned Business Certification?

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).

The Right Resources for the Path Ahead

Securing the future of your business is made so much easier when you have the right resources. Fundid is one such tool that 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.

For more information on certifying your minority-owned business, or to learn more about Fundid’s financing options, contact us today!

HELLO MS.CEO EMPOWERMENT, INC. Is driven by a mission to empower early stage under-invested women business owners on their growth journeys by simplifying access to capital.

We create unique financial solutions to take away the excuses and help YOU to push through the financial challenges that women are faced with when starting &/ growing your dream business.


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