9 financial resources for women and minority business owners affected by the coronavirus
Entrepreneurs and small business owners across the country have undoubtedly been hit hard by today's pandemic with many non-essential businesses remaining closed until further notice.
Though the federal government has stepped in to offer more than $600 billion in financial assistance through the Paycheck Protection Program (PPP) under the Coronavirus Aid Relief and Economic Security (CARES) Act, the demand for funding remains high, especially among women and minority entrepreneurs.
According to some experts, up to 90% of minority and women small business owners are predicted to be denied a PPP loan because financial institutions are favoring pre-existing customers when distributing the funds, therefore ignoring many minority and women entrepreneurs who may not have a bank loan. In 2018, the average size loan for women-owned businesses was 31% less than the average size loan for male-owned businesses, reports online credit marketplace Biz2Credit. For racial minorities, data from the Brookings Institution found that large banks approved 60% of loans by white business owners, compared to just 50% of loans by Hispanic business owners and 29% of loans by black business owners, proving that not all entrepreneurs have access to the same capital.
To help women and minority business owners stay afloat during and after the pandemic, several organizations and leaders have stepped up to create their own Covid-19 financial relief funds. CNBC Make It compiled a list of nine programs that are allocating grants for small businesses, some of which include mentorship opportunities as well.
1. The Red Backpack Fund
Details of the program: Spanx founder Sara Blakely has partnered with the nonprofit organization GlobalGiving to start The Red Backpack Fund for women entrepreneurs who are impacted by Covid-19. The fund will award $5,000 grants to at least 1,000 women entrepreneurs in the U.S. Applications for the fund opened in April and will run through August 2020. Each month, 200 entrepreneurs will be selected to win the $5,000 grant as well as a free all-access pass to 80+ MasterClass sessions, including Blakely's class on entrepreneurship.
2. Verizon Small Business Recovery Fund
Details of the program: Through its partnership with the Local Initiatives Support Corporation, Verizon has created a $7.5 million grant program for small businesses in the U.S., with a focus on entrepreneurs of color, women and business owners from other historically underserved communities. The money will be distributed through a series of funding rounds, with applications open until 11:59 pm ET on May 20 for round three. Business owners must be at least 18 years old to apply and they will be eligible to receive up to $10,000 in grant money.
3. Hello Alice
Details of the program: Hello Alice, a free multichannel platform that provides businesses with the resources needed to grow, has created a Covid-19 Business for All Emergency Grant fund that will offer $10,000 grants to small business owners impacted by the pandemic. The platform is also offering a Spanish-language version of its Covid-19 Business Resource Center page and dedicating a portion of its grant fund to Hispanic small business owners.
4. The Doonie Fund
Details of the program: Kathryn Finney, CEO of the social startup digitalundivided, created The Doonie Fund, which is named after her grandmother, to help black women entrepreneurs impacted by Covid-19. Since the fund's inception on April 5, 2020, Finney has helped more than 500 black female entrepreneurs by making an immediate micro investment of $100 into their business, which she says can be used in "whatever way they need to use it."
5. GingerBread Capital x IFundWomen Covid-19 Relief Grant
Details of program: IFundWomen, a startup funding platform for women, has partnered with VC firm GingerBread Capital to provide $10,000 grants to 25 companies in some of Covid-19's hardest hit states. To apply, entrepreneurs have to have a for-profit company that has been in business for at least two years, 2019 revenue of at least $250,000, a pre-Covid staff of at least five people and they have to have never raised venture capital money before.
6. Stacy's Rise Project
Details of the program: Stacy's Pita Chips brand is awarding $10,000 grants to 15 female entrepreneurs who are in need of financial support for their business. In addition to receiving grant money, winners will also receive assistance with building ads for their company and receive virtual mentorship from PepsiCo/Frito-Lay leaders and other industry experts who can provide insight on how to grow a business. Applications for the program are open from now until June 1.
7. Moms as Entrepreneurs
Details of the program: Moms as Entrepreneurs, a nonprofit business incubator for women, has started a Covid-19 relief fund solely for businesses owned by mothers. The fund, which opened applications on May 18, will grant $500-$1,000 to mom entrepreneurs who have been shut out of government loans or other funding during the pandemic.
8. The Mom Project Stronger Together Fund
Details of the program: The Mom Project, a platform that connects employers to female candidates with a primary focus on helping moms re-enter the workforce, has started a $500,000 Stronger Together Fund. The fund, which is designed for "family friendly" businesses who need help during the pandemic, will be used to help employers pay for the salary of full-time employees or contractors.
9. The Entrepreneurial Dream Project
Details of the program: Supermaker, a media company that provides content and community for startups and creative individuals, has started a $100,000 grant and mentorship program called The Entrepreneurial Dream Project to benefit new business owners who are trying to grow and build their company amid the pandemic. The goal of the fund is to inspire new entrepreneurs to keep going despite the coronavirus crisis. Two companies whose products were made publicly available in 2019 or later, will be selected to equally split the $100,000, while 10 other companies will receive mentoring from the Supermaker Mentor Network, which includes leaders like Mark Cuban and Rebecca Minkoff.
For more info on small business resources or PPP loan funding, visit CNBC's small business site here.
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