Minimizing the gap between funds and opportunities imparted to minority owned businesses as compared to others is quite crucial. Besides this, a lot of programs have been launched to let minority owned companies grow. The certificate bearing minority owned businesses get an access over special government programs. These programs include government contracts which will give a push to an otherwise deprived business..
What are the requirements to get qualified as a Certified Minority Owned Business?
The small-sized firms who seek to acquire minority Business Certificate are required to get in touch with the National Minority Supplier Development Council (NMSDC). NMSDC is an organization that is focused towards enhancing the prospects of business for certified minority businesses and connects them to the members of the corporate industry. For Certification, an application can be submitted online and the requirements are:
- Business should be at least 51 percent minority-owned i.e. it should involve the one who is 25 percent- African-American, American Indian, Asian American, Alaskan Native, Hispanic or Native American.
- This is confirmed through – screening tests and interviews along with the physical visit.
- The Minority owner member or members must be performing management and daily operations of the firm.
- It should be a profit making organization which is situated in U.S. or its trust territories.
What are the benefits of being a Certified Minority Owned Business?
Access to Corporate and Government Contracts:
As per the law, many government organizations are mandated to perform business with the Minority Owned Businesses. Thus, purchasing a minimum specified percentage of the goods from them is mandatory. Contrary to this, a significant number of organizations are themselves eager to initiate business with them even if these firms are not mandated to do so. These firms are well acknowledged about the advantages of buying the goods and services from the certified Minority Owned Businesses. This certificate imparts a way of differentiating a specific firm from other suppliers in competition. Besides this, these firms are also provided with the information of the businesses and government organizations who want to buy the supply needs from the certified businesses. This list thus initiates their focused approach towards the interested customers.
Funding Imparted:
As per the research if the access to debt and equity capital is measured between the Minority Owned Businesses and otherwise, Minority is the one deprived. A lot of programs are thus launched to minimize this gap in funding. To get the advantage of these programs requires one to hold the certification. If not required by the programs, this certificate elevates and legitimates the status of a business.
An exclusive pool of Equity Financing provided can structure the equity investment of a business. The firms are mandated to obtain certification to get the advantage of the same. Many equity investors are nowadays keeping a percentage of capital for investing in Certified Businesses considering the benefits to do so.
A high amount of Debt Financing is also enabled to these firms. To access these loans the firm is required to hold certification like Equity Financing. These loans thus offer the terms of lower interest rates as compared to the general interest rate imposed and more relaxed guarantee requirements. Many organizations also impart grants to provide support towards these businesses.
Training and Network Opportunities Fostered:
Through the Certification, a Minority Business is empowered via training and networking programs. These programs will prove useful for them while expanding their reach to new customers and while imparting best practices required for a successful endeavour. Along with the online courses, many conferences and events are organized which impart enhancement to the business processes and profits earned.