How to Certify a Minority-Owned Business

Minority-owned business certification is a formal recognition that a business is owned, operated, and controlled by a member of a minority group, such as:

• African American;
• Asian American;
• Hispanic American;
• Native American;
• LGBT; or
• Persons with Disabilities

A certification can help a business access more opportunities for contracts, grants, loans, and other benefits from government agencies and corporations that have diversity goals or requirements.

There are different organizations that offer minority-owned business certifications, depending on the type and size of the business and the target market. Some of the most common ones are:

• The National Minority Supplier Development Council (NMSDC), which certifies minority-owned businesses that sell goods or services to corporations. The NMSDC has 23 regional councils and over 1,400 corporate members across the U.S.
• The Women’s Business Enterprise National Council (WBENC), which certifies women-owned businesses that sell goods or services to corporations or government agencies. The WBENC has 14 regional partner organizations and over 700 corporate members across the U.S.
• The National LGBT Chamber of Commerce (NGLCC), which certifies LGBT-owned businesses that sell goods or services to corporations or government agencies. The NGLCC has over 200 corporate partners and over 50 local affiliate chambers across the U.S.
• City, county, or state programs that certify minority-owned businesses that sell goods or services to local or state government agencies. These programs may have different eligibility criteria and benefits depending on the location.

The steps to becoming a certified minority-owned business vary depending on the organization and the type of certification but generally include:

• Completing a business profile on the relevant provider’s application platform;
• Uploading supporting documents, such as proof of ownership, financial statements, tax returns, licenses, resumes, etc.;
• Hosting a site visit by a representative of the organization to verify the information provided;
• A 30- to 90-day review process by the relevant committee;
• Eligibility.

To be eligible for most minority-owned business certifications, a business must meet the following criteria:

• Be at least 51% owned, operated, and controlled by one or more members of a minority group;
• Be a for-profit enterprise that is formed as a sole proprietorship, partnership, corporation, or LLC;
• Be located in the U.S. or its territories;
• Be independent and not affiliated with a dominant business in the same industry.

The benefits of minority-owned business certification include:

• Access to exclusive databases of contract opportunities from government agencies and corporations that have diversity goals or requirements;
• Access to networking events, training programs, mentorship opportunities, and other resources to help grow the business;
• Access to discounts, scholarships, grants, loans, and other financial assistance from the organization or its partners;
• Access to recognition and awards for outstanding performance and innovation.

The Small Business Association 8(a) Business Development Program

The Small Business Association 8(a) Business Development Program is a program that helps socially and economically disadvantaged small businesses grow and compete in the federal marketplace. The program offers a range of benefits, such as:

• Access to set-aside and sole-source contracts from federal agencies;
• One-on-one business development assistance from dedicated specialists;
• Mentorship, training, and networking opportunities;
• Eligibility for other SBA programs, such as 7(j) Management and Technical Assistance and Surplus Property.

The program lasts for nine years, divided into a four-year developmental stage and a five-year transition stage.

To participate in the program, a business must meet the following criteria:

• Be a small business according to SBA size standards;
• Be at least 51% owned and controlled by one or more U.S. citizens who are socially and economically disadvantaged;
• Demonstrate good character and potential for success;
• Be located in the U.S. or its territories.

To apply for the program, a business must register in the System for Award Management (SAM) and the Dynamic Small Business Search (DSBS), complete an online application on the Certify website, and submit supporting documents. The application process may take several months and involves a review by the SBA and a site visit.

State Programs Through US DOT

State programs through the US Department Of Transportation (DOT) are programs that provide funding or financing for transportation projects at the state level, either through formula grants or discretionary grants.

Some examples of state programs through US DOT are:

• The Federal-Aid Highway Program, which apportions funding to state DOTs by formula to support highway construction, maintenance, safety, and planning. The program consists of several categories, such as:
  • The National Highway Performance Program;
  • The Surface Transportation Block Grant Program;
  • The Highway Safety Improvement Program;
  • The Congestion Mitigation and Air Quality Improvement Program.
• The Urbanized Area Formula Grants (Section 5307), which fund transit capital and operating assistance in urbanized areas with populations of 50,000 or more. The program also supports planning and job access, and reverse commute projects.
• The Formula Grants for Rural Areas (Section 5311), which provide capital, planning, and operating assistance to states and federally recognized tribes to support public transportation in rural areas with populations of less than 50,000.
• The Transportation Investments Generating Economic Recovery (TIGER) grant program, which awards competitive discretionary grants to projects that have a significant impact on the nation, a region, or a metropolitan area. The program supports multimodal and multi-jurisdictional projects that are difficult to fund through traditional federal programs.
• The Fostering Advancements in Shipping and Transportation for the Long-term Achievement of National Efficiencies (FASTLANE) program, which awards competitive discretionary grants to projects that address critical freight issues facing the nation’s highways and bridges. The program supports projects that improve the safety, efficiency, and reliability of the movement of freight and people.

State and Local Minority Business Enterprise Programs

State and local minority business enterprise programs are programs that certify and assist minority-owned businesses that sell goods or services to state or local government agencies. These programs may have different eligibility criteria and benefits depending on the location. Some examples of state and local minority business enterprise programs are:

• The Georgia Minority Supplier Development Council (GMSDC), which certifies minority-owned businesses that sell goods or services to corporations or government agencies in Georgia. The GMSDC also provides training, networking, and advocacy for its members.
• The New York State Minority and Women-Owned Business Enterprise (MWBE) Certification Program, which certifies minority- and women-owned businesses that sell goods or services to New York State agencies or authorities. The program also provides access to state contracting opportunities, technical assistance, and financial resources for its certified businesses.
• The Los Angeles County Office of Small Business (OSB), which certifies minority-, women-, veteran-, disabled veteran-, and LGBT-owned businesses that sell goods or services to Los Angeles County departments. The OSB also provides outreach, education, and procurement assistance for its certified businesses.

What Are the Steps Required to Become a Minority-Owned Business?

Here are the steps to becoming a minority-owned business:

1. Establish and Validate Your Business: Before you can qualify as a minority-owned business, you must first have a valid, functioning business. Ensure that you have all the necessary licenses and permits and that your business is in good standing.
2. Determine Eligibility: To be considered a minority-owned business, at least 51% of the business must be owned, operated, and controlled by U.S. citizens who are part of a recognized minority group (African American, Hispanic American, Native American, Asian American, or Pacific Islander). Your business must be for-profit and located in the U.S. or its territories.
3. Prepare Necessary Documentation: Prepare all necessary documentation to prove your eligibility. This includes proof of U.S. citizenship, documentation of minority status, and business documents like articles of incorporation, business licenses, and financial statements.
4. Apply for Certification: Apply for certification through the National Minority Supplier Development Council (NMSDC), the U.S. Small Business Administration (SBA), or other regional minority supplier development councils. The application process requires the submission of your business documents and may include site visits and interviews.
5. Maintain Your Certification: Once certified, maintain your certification by following any requirements set forth by the certifying organization. This often includes annual recertification.

How Much Does a Minority-Owned Business Certification Cost?

The cost for minority business certification varies based on the certifying agency. The NMSDC charges a fee that ranges from $350 to $1,200 based on the applicant company’s gross annual sales. SBA’s 8(a) Business Development Program certification is free, but the process is more rigorous.

Do I Need a Lawyer to Certify My Minority-Owned Small Business?

While it is not strictly necessary to have a lawyer to certify your minority-owned business, having a commercial lawyer can be a significant advantage. A lawyer can help ensure that all your documentation is in order and advise you on the best strategy for your business.

Finding a qualified commercial lawyer is easy with LegalMatch. LegalMatch is a leading online legal matching service that connects you with pre-screened, experienced lawyers in your area.

You simply submit your case, and LegalMatch matches you with a lawyer who has the right skills and experience for your needs. You can then review their qualifications, rates, and availability and choose the best one for you. The service is fast, confidential, and free of charge.

Don’t leave the future of your minority-owned business to chance. Let a LegalMatch commercial lawyer guide you through the certification process. Start your journey towards becoming a certified minority-owned business today. Legal assistance is just a few clicks away.