LGBTQ-owned businesses are in the spotlight during Pride month, but these vibrant businesses have also seen steady growth year-round. LGBTQ-owned businesses are gaining recognition around the country, and for all their achievements they still face many challenges. In recent years, programming, resources, community, small business loans and grants for LGBTQ businesses have all come together to support these entrepreneurs.
In this overview, you’ll learn about the challenges that LGBTQ businesses face, the programs and resources available to the community, and special funding initiatives to keep them growing.
Challenges for LGBTQ-owned businesses
While LGBTQ-owned businesses operate in the same geographies as other businesses, they face a unique set of challenges.
For example, per the Center for LGBTQ Economic Advancement and Research, LGBTQ-owned businesses are more likely to be owned by women and immigrants compared to non-LGBTQ-owned businesses. In addition, 69% of LGBTQ-owned businesses reported inconsistent or uneven sales as a financial challenge within the past year.
The same study found that LGBTQ-owned businesses are approved for financing less often than non-LGBTQ businesses, even though they apply for financing about as often as other businesses.
LGBTQ-owned businesses generally seek lower amounts of funding (51% apply for less than $50,000, whereas 69% of non-LGBTQ-owned businesses apply for more than $50,000). More than 80% of LGBTQ-owned businesses reported that they didn’t receive funding when they applied for versus 48% of non-LGBTQ-owned businesses.
Simply put, LGBTQ-owned businesses face challenges accessing capital and building stable enterprises. While there’s still a long way to go in better serving these entrepreneurs, new programs and grants for LGBTQ businesses are offering great opportunities.
Certified LGBTBE Business Enterprise
The LGBTBE certification from the National Gay and Lesbian Chamber of Commerce offers many benefits, but chief among them is its ability to create revenue opportunities for its members. Many corporate supplier diversity programs have a rule-based preference for LGBTBE-certified businesses. Having this certification can mean working with some of the largest companies in the world on equal footing with much larger vendors.
Until recently, this certification was only useful with corporate clients, but now some government procurement programs are accepting LGBTBE certification as part of their supplier diversity programs, including California, Massachusetts, and Pennsylvania.
As of November 2021, New York City became the biggest municipality to recognize the LGBTBE certification in its procurement process. Rule-based preferences in the government or in companies requires buyers to spend a certain percent of their budgets on LGBTQ-owned businesses, putting opportunities into reach for more of these small businesses.
Funding and grants for LGBTQ businesses
During the COVID pandemic, many one-time grants for LGBTQ businesses were available. Today, there are many other grants and special-building funding tools available to LGBTQ entrepreneurs. Investment funds and other loan programs are now available that exclusively focus on the LGBT business community. Here are just a few of the resources available:
StartOut Growth Lab: StartOut is a not-for-profit that supports entrepreneurial initiatives for LGBTQ founders. Its Growth Lab is a six-month accelerator that pairs mentorship with access to funding. Participants get access to a virtual community of LGBTQ business owners, free legal consultations, and weekly digital lunch and learns among other benefits.
To date, 65 businesses have graduated from the program and have created more than 3,650 new jobs.
NGLCC Community Impact Grant Program: This grant for LGBTQ businesses, made in partnership with GrubHub, focuses on supporting food and beverage entrepreneurs. Grants are available between $10,000 and $25,000 for to LGBTQ-owned businesses or LGBTQ-allied businesses.
Backstage Capital: Backstage Capital focuses on building an investment portfolio of underrepresented entrepreneurs, including LGBTQ entrepreneurs. According to its website, less than 10% of all venture capital funds go to women, people of color, and LGBTQ business owners. Backstage Capital’s average investment is $100,000 and focuses on high-growth businesses.
NYC Pride Small Business Grant: Mastercard and the NYC Pride organization issue grants of $10,000 to small businesses based in NYC. While the application period is closed for this first year of the program, it may become a recurring fixture of Pride month going forward.
Bud Light Biz Pitch: Another program made in partnership with the NGLCC, the Bud Light Biz Pitch competition will award grants of $5,000 to small businesses and a chance to compete for a $50,000 grand prize.
Education and training for LGBTQ businesses
There are numerous programs available that focus on education, training, and support for LGBTQ-owned businesses. These programs are designed to improve success, professionalism, and resilience of LGBTQ entrepreneurs. Here are a few to explore:
National Gay and Lesbian Chamber of Commerce Programs:
The NGLCC is a hub for programming and funding available to LGBTQ entrepreneurs. Some of their education and training programs include:
- Mentorship: Drawing from NGLCC’s large number of corporate members, the mentorship program pairs small business owners with industry leaders.
- Engagement center: The NGLCC’s engagement center is available virtually or physically, providing a place where entrepreneurs can connect for advice and resources.
- JP Morgan Chase Business Growth: This partnership with Chase offers an ongoing series of free courses related to strategy, marketing, and financing for small companies.
Queer Business Alliance: The Queer Business Alliance is a not-for-profit that focuses on LGBTQ business owners, offering quarterly workshops and downloadable resources through their website. This is a membership organization and enrolled members can access these workshops and participate in their Signature Peer Mentorship Program with experienced industry experts.
Gay-Straight Business Alliance (GSBA): The GSBA operates an 9-week accelerator that covers managing cash flow, securing grants for LGBTQ businesses, applying for financing, market analysis, making time for business and personal life, market analysis, and business planning. GSBA also offers masterclasses with industry experts and ongoing workshops.
Advocacy for LGBTQ-owned businesses
There are several organizations involved in advocacy to continually advance the interests of LGBTQ-owned businesses. While these organizations support all business owners, they offer more individualized support and visibility for LGBTQ businesses.
Google for Small Business: One of the best ways to ease the challenges faced by LGBTQ-owned businesses is to make it easier for them to connect with their communities. Google for Small Business offers companies the option to identify as “LGBTQ-friendly” and indicate if they have gender-neutral restrooms available on premise. This makes it easier for the LGBTQ community to connect with businesses that support them, and to find businesses owned by LGBTQ entrepreneurs.
Human Rights Campaign: The Human Rights Campaign, a division of the UN, focuses on supporting LGBTQ-owned businesses and those that cater to the LGBTQ community. To support businesses, HRC works by advocating to lawmakers regionally, nationally, and internationally to make pledges to support LGBTQ business.
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