To qualify as a minority-owned business, a minority or woman must own the business.
In the United States, a minority business application is used to apply for any of the various opportunities offered to minority-owned businesses, including women-owned businesses. The application requires the applicant to demonstrate that the business is minority owned by listing specific information that can be substantiated. Examples of questions on the minority business application include the type of business, how long it has been in operation, and the names of the key owners. Owners will need to provide proof of their minority status, such as a minority nationality.
Low-interest loans are the most common opportunity given to minority-owned businesses.
Typically, to qualify as a minority-owned business, a minority or woman must own a majority of the business, which is generally defined as 51% ownership. People who are considered members of a recognized minority group include women, blacks, Hispanics, Native Americans, Hawaiian Americans, and Asians. Sometimes an interview may accompany the minority business order to ensure that the persons listed as owners qualify as members of a minority group and are, in fact, involved in the actual operation of the business. Having a qualifying minority just as a figurehead, or simply as a monetary donor, is generally not suitable for approving a minority business application. Alternatively, income can be used as a minority qualification, and applicants must provide proof of income that meets established guidelines.
Low-interest loans are the most common type of opportunity offered to minority businesses. They arose because minorities traditionally had difficulty obtaining business financing due to low income, lack of work history, or few assets to pledge against the loan. A minority business application is specifically designed to be considered for minority financing, using non-traditional criteria for consideration.
Other special opportunities for which a minority business application can be used include loans or grants to start or expand a specific program within the company, mentor a successful entrepreneur in the community, and network to introduce minority business owners to influential business leaders. There are even special programs that teach minority business owners how to apply to work with the federal government in some way, as this is a long and tedious process that can make any business owner give up and feel frustrated.
When evaluators see a minority business application, they understand its importance to the parties involved and the need to use specific criteria for consideration. There is no universally accepted way. Minority business applications are recognized by their titles, the types of questions asked for verification, and the criteria used to evaluate the applications.