How to Get Certified as a Minority-Owned Business
Getting certified as a minority-owned business can help your business access government contracts, business capital, networking opportunities and more.
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Managing Editor Getting certified as a minority-owned business can be helpful for opportunities such as government contracts, small-business loans and business resource programs. You can get certified through the National Minority Supplier Development Council (NMSDC). Your local government may also offer certification.
Typically, you’ll need to be able to show that your business is 51% owned and operated by individuals that meet specific ethnic definitions. The requirements and process to become certified, however, can vary. Some programs, like the SBA 8(a) program, require you to renew your business’s certification on an annual basis.
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What is a minority-owned business?
Generally, a minority-owned business is a small, for-profit business that is at least 51% owned by someone who identifies as an individual in a qualified minority group. The definition of these qualified groups, as well as the required percentage of ownership may change based on the institution or type of service being offered.
For example, NMSDC considers individuals belonging to the following groups to be minorities: Asian-Indian, Asian-Pacific, Black, Hispanic or Native American
Getting minority-owned business certification
1. Consider your business’s needs
There are multiple reasons to consider getting certified as a minority-owned business, including access to capital, winning exclusive contracts or free resources like business coaching. Although you don’t need a specific reason to get certified, understanding your goals can help determine which agency you choose. If your business is seeking federal contracting work, for example, your time and effort to get certified may be better spent with a federal entity, such as the SBA, than with your local government.
2. Research agencies
Start by reading up on national certification agencies, or consider if a local agency or your local government is a better option for your business. If you’re only doing business in your state, you may decide that a minority-owned business certification from that state government would look stronger to your customers than a larger, national agency.
» MORE: Best business loans for veterans
3. Gather documents and apply for certification
Understand what you’ll need to apply for certification, and make sure you know the fees involved. Most national agencies will ask you to fill out an online application and submit legal, tax and financial documentation about your business.
You may also be required to submit proof of social disadvantage or qualified minority groups. NMSDC asks for “proof of eligible minority ethnicity,” for example, while the SBA asks for a written social disadvantage narrative.
4. Promote your business
Once you’ve gone through the work, you’ll want to make sure you’re leaning into the marketing and educational resources, networking opportunities and possible access to capital that certification can help you access.
If you’re looking for funding, consider loans or business grants targeted toward minority-owned enterprises. You may want to add badges on your social pages or disclose your business identity attributes with Google Business. You can also share a personal story about how your identity has shaped your business endeavors on your website or social media page.
Lastly, consider joining a local chamber of commerce that is targeted toward specific minority groups. These chambers aim to uplift their members and can help you network with other small-business owners and important stakeholders.
» MORE: Business grants for Black women
Where you can get certified as a minority-owned business
National Minority Supplier Development Council (NMSDC)
Best overall
NMSDC is a national organization with local offices that assist minority-owned businesses with different resources, including getting certified. It offers three types of certifications:
- Minority Business Enterprise (MBE) for small businesses that are at least 51% owned and managed by someone who is at least 25% Asian-Indian, Asian-Pacific, Black, Hispanic or Native American
. - Minority Controlled Company (MCC) and Minority Publicly Controlled Company (MPC) for minority-owned firms that may not meet the qualification requirements because they have taken equity funding from investors.
- Investment Fund Certification (IFC) for minority-owned investment funds that aim to help other minority-owned businesses.
Cost
The cost of membership and certification varies based on region. For reference, NMSDC’s Midwest chapter charges $450 for initial MBE certification and $400 for recertification for businesses with annual sales under $1 million. In New York and northern New Jersey, businesses in the same category pay $400 for certification, whereas the Southwest chapter charges $300.
NMSDC also offers a certification reimbursement program that allows its corporate members to cover certifying costs for small businesses. Eligibility for that program varies based on who is funding it.
Qualification requirements
To qualify as a minority-owned business, the member of the qualified minority group must own and control at least 51% of the business, serve as president or CEO of the company, be active in daily management and be a U.S. citizen.
Department of Transportation DBE Program
Best for businesses in federally assisted transportation contracting industries
The Department of Transportation offers a Disadvantaged Business Enterprise (DBE) program, that promotes access to federally funded transportation contracts for DBEs. A DBE is defined as a for-profit small business that’s at least 51% owned by an individual who is African American, Hispanic, Native American, Asian Pacific or Subcontinental Asian
Cost
The cost of applying for DBE certification depends on your business’s state. For reference, California and Texas do not charge a fee to become certified.
Qualification requirements
In addition to being a member of a qualified economically or socially disadvantaged group, an applicant’s net worth must not exceed $1.32 million, and their business’s annual gross income cannot exceed $23.98 million and must be independent of any other company.
SBA
Best for federal contracting
The federal government awards contracts to small businesses every year, including through certain SBA programs. These set-aside contracts typically include all small contracts — under $150,000 — and, in some cases, can help you avoid a competitive bidding process.
Cost
The SBA doesn’t charge to become certified in its programs.
Qualification requirements
Qualifications vary based on the specific program below, but you must meet SBA size requirements and be 51% owned by a member of the program’s qualifying disadvantaged group. The further breakdown is:
- Small Disadvantaged Business (SDB): The business owners must be socially and economically disadvantaged. The SBA definition of socially disadvantaged includes ethnic minority groups similar to NMSDC, and also includes gender and identifiable disabilities.
- 8(a) Business Development Program: Applicants must have been in business for at least two years, demonstrate good character and have a personal net worth below $850,000, adjusted gross income under $400,000 and total assets under $6.5 million. Additionally, they cannot have previously participated in the 8(a) Program.
» MORE: Explore SBA loan types
Frequently Asked Questions
How long does it take to get MBE certification?
The exact time will depend on which regional chapter of NMSDC is certifying your business, but 90 business days is given as a guideline for initial certification. Expedited processing may be available for an additional fee.
What qualifies you as a minority-owned business?
The definition of a minority-owned business varies depending on the institution; however, most define minorities as Asian-Indian, Asian-Pacific, Black, Hispanic or Native American individuals.
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