A minority-owned business certification (MBE) is a helpful tool for minority-owned businesses. Find out how and how to apply.
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Minority-owned business certification (or MBE certification for short) is an official certification that small businesses can register to access financial and professional opportunities.
In this article, we’ll explain the benefits of becoming a registered minority-owned business, your qualifications to become certified, and general timelines for the certification process!
Keep on reading to find out more.
What Is A Minority-Owned Business?
According to the National Minority Supplier Development Council (NMSDC), “Minority group members are United States citizens who are Asian-Indian, Asian-Pacific, Black, Hispanic, and Native American.”
For a business to be considered minority-owned, it must be at least 51% owned by minority individuals. If the business is publicly owned, one or more minority individuals must own at least 51% of the stock. Those minority individuals should control the management and daily operations.
If your business meets these requirements, you can join the 15,000+ other MBE-certified businesses. Read on to learn more about the benefits of this certification and how you can register.
Why Should I Register As A Minority-Owned Business?
There are several reasons you should consider registering your minority-owned business for an official MBE certification. Business owners seek out this certification for financial and professional development opportunities.
With an MBE certification, businesses can access minority small business grants, business loans, and minority depository institutions.
Read our article to learn about ten great organizations that want to help you fund your small business. Other funding resources include minority business loans, and we even have a roundup of loans you can get with an MBE certification even if you have bad credit!
The most unique resources you will gain access to are minority depository institutions. These institutions exist solely to help business owners in underserved communities who rarely have other funding opportunities.
Access To Networking
When you receive your MBE certification, you automatically gain access to a network of other minority-owned businesses in your area and across the country! You can find peers in your industry and have the ability to engage in business opportunities, form partnering relationships, or even joint ventures for mutual success.
Conferences & Events
There are multiple organizations you can choose to become certified; most boast their own catalog of courses and conference events. We’ll discuss these organizations more in depth below.
Where Can I Become Certified As A Minority-Owned Business?
As mentioned above, multiple organizations offer an MBE certification for small businesses nationwide.
Some are national, and others are more local, so consider this when choosing where you’d like to complete your certification.
Other things to consider include the size of the network that comes with the certification, conferences and events, and built-in professional development/advancement opportunities.
National Minority Supplier Development Council (NMSDC)
NMSDC was founded in 1972 and is the longest-operating business growth engine for the largest group of systematically excluded communities of color.
This council boasts 23 Regional Affiliates across the country, 1,500+ corporate members, and 15,000+ minority-owned businesses in their network. They also offer levels of services available to MBE-certified businesses.
Requirements for your business to be considered for certification:
- Register with your Regional Affiliate
- For profit
- Located in the US or its territories
- 51% minority-owned
Small Business Association (SBA) 8(a) Business Development Program
The SBA offers opportunities for minority-owned businesses through the 8(a) Business Development Program. This 9-year program helps businesses owned by socially and economically disadvantaged individuals compete in the American economy.
The 8(a) Business Development Program offers its participants one-on-one business development assistance for all nine years of the program, the ability to receive federal surplus property, and eligibility for exclusive sole-source and competitive set-aside contracts.
Requirements for participating:
- Not have previously participated in the 8(a) program
- Be at least 51% owned and controlled by U.S. citizens who are socially and economically disadvantaged
- Have a personal net worth of $850,000 or less, adjusted gross income of $400,000 thousand or less, and assets totaling $6.5 million or less
- Demonstrate the potential for success, such as having been in business for two years
State & Local Governments
State and local governments should also have departments dedicated to helping MBE and women-owned business enterprises (WBE) become certified. Visit official websites for your state/county/city to learn more about the requirements and benefits they can offer with certification.
Steps To Register As A Minority-Owned Business
These steps are more of a general guideline.
Check with your chosen certification program to make sure you are following their steps.
- Review Certification Criteria: Make sure your business meets the requirements for certification.
- Gather Your Documents: Collect all required documents based on the certification program’s needs.
- Complete The Application: This will most likely be an online application with no completion time limit.
- Pay Application Fee: Some programs require an application fee while others do not.
- Upload Required Documents: Ensure you have uploaded and attached the relevant documents to your application.
- Wait To Be Contacted: Your application will be reviewed for accuracy and completion
- Schedule A Site Visit: Some organizations will visit your business’s site before approving your application.
- Wait For Approval: Some programs only have one board that approves applications, while others may have many. Sit tight and wait to hear back about the status of your certification!
Becoming MBE certified can seem like a lot of paperwork and waiting, but it will only benefit your business in the long run.
Customers and clients are looking more often for businesses owned by marginalized people and becoming certified puts you at the top of their lists. You will gain access to exclusive contracts, business opportunities, funding, networking, conferences, and other MBE-certified business owners to connect with and build your support network.
So go on, apply!
In the meantime, find other ways to strengthen and grow your business. Are you looking for funding like grants or the best options for minority loans? Check out our other resources for minority-owned businesses today.
How To Register As A Minority-Owned Business FAQs
What does MBE certified mean?
“MBE (Minority Business Enterprise) certified” means your business received official certification as a minority business. This is something that minority-owned businesses can register for to gain access to both financial and professional opportunities. There are multiple organizations nationwide that offer certification.
How do I become a certified minority business?
You can become a certified minority-owned business by applying through organizations like the National Minority Supplier Development Council (NMSDC), the Small Business Administration (SBA) 8(a) Business Development Program, or local/state government agencies.
Why is MBE certification important?
MBE certification is important because it provides your minority-owned business with exclusive funding options, a network of other MBE business owners, and contracts/business opportunities you will not have access to without certification.
What does the SBA consider a minority?
The SBA considers a minority to be a U.S. citizen that is socially and economically disadvantaged. Small businesses owned by Alaska Native corporations, Community Development Corporations, Indian tribes, and Native Hawaiian organizations are also part of this category.
What are the benefits of being an MBE?
Benefits of being an MBE-certified business include access to unique funding options, a network of like-minded business owners, exclusive contracts and business opportunities, and professional development conferences/events. It also legitimizes your business and claims of minority ownership to customers and clients.
How much does it cost to get an MBE?
The cost of an MBE certification depends on what program you are applying through. NMSDC currently requires a $2,000 non-refundable processing fee for its certification applicants.
What is needed for an MBE?
There are a lot of documents required for an MBE certification, but the most important are a valid picture ID, proof of ethnicity for owner(s), federal tax returns, current financial statements, Employee Identification Number (EIN), and other relevant business documentation. Check where you are applying to learn more.