In the U.S., Black-owned businesses increased 34.5% between 2007 and 2012 totaling 2.6 million firms. Yet, they still typically face greater challenges in securing capital compared to white-owned businesses.

The largest source of capital for Black entrepreneurs is typically their own personal savings or loans from friends and family. In fact, a study by the Kauffman Foundation found that Black founders rely on personal credit cards to fund new companies or acquire existing ones. The study also states that 6 in 10 Black entrepreneurs didn’t seek additional financing despite needing it, because they thought the business would not be approved by a lender.

So where does that leave ambitious, Black entrepreneurs, like you? Well, we have three unique ways to find funding for your business right now.

1. Crowdfunding. No, we’re not talking about creating a simple GoFundMe page. Crowdfunding is the process of asking individuals to contribute to a specific business venture or cause via the internet, even if it’s in small amounts. A company can also secure much needed capital in return for small amounts of investor equity. And it all adds up – the global crowdfunding market size was $84 billion as of 2018 and is expected to reach $114 billion in 2021. Now is your time to claim your piece of the pie. To get started, check out these sites designed especially for Black and women-owned businesses.

Bridging the Black wealth gap, The 10K Project is a 100% Black-owned equity crowdfunding platform that allows micro investors to join for $100 and invest in black-owned small business—if 10,000 people invest $100, then that becomes $1 million. Next is Rise Fund N’Go, which is the brainchild of two Nigerian sisters. Anita Egbune and Marian Arafiena are the masterminds behind the new platform that has already attracted five live projects. On this platform, businesses can be commercial or charitable. Lastly,  there is a socially conscious crowdfunding platform for early-stage black women founders, FBW or Fund Black Women. The founders of this platform believe that when Black founders and the spending power of Black consumers align, the future we want becomes possible.

2. Grants. Interested in learning how the government can play a role in funding your ideas and projects? Grants are a solid way to receive government funding, especially for projects that provide public services and stimulate the economy. Each spring and summer, the Minority Business Development Agency organizes various angel investors with the primary objective of supporting small businesses through minority business grants.

Designed for aspiring entrepreneurs in low-wealth neighborhoods, Operation Hope combines business training and financial counseling along with access to small-business financing options. And lastly, the National Minority Supplier Development Council is focused on increasing business opportunities for certified minority-owned businesses. It operates the Business Consortium Fund, a nonprofit business development program, which offers financing programs and business advisory services for its members.

3. Contests. Entering a competition is not only a great way to fund your business, but it can also increase your visibility as brand—and often comes with some great perks too. Created to help Black women entrepreneurs take their business to the next level, ESSENCE® + Pine-Sol™ are partnering to offer a $100,000 Legacy Award. This incredible opportunity includes six months of coaching with business strategist and reality star, Nicole Walters. She is passionate about teaching entrepreneurs how to increase their income and can help you monetize your life. If you have a registered business (LLC, Inc., etc), then you are all set to enter! Simply create a short video telling us about yourself, supply a copy of your business plan and fill out an application. Entry forms can be found on the PineSol hub, so just click here to get details and started right now!

Source: ESSENCE.com