How to get Minority Business Enterprise Certification

If you are a minority-owned business (MBE), you might not realize it, but you are in an elite group.

Because you are minority-owned, you have a long list of programs available to you. There are networking events, corporate purchasing and supplier databases, grant programs, new tech programs, and access to top corporations that could help you grow. 

You also have the ability to bid on lucrative government contracts and sign up to meet with a team of small business experts who are happy to provide business consulting services at a minimal cost. And these are just some of the perks!

However, you need to get certified first.

At Invoice2go, a Bill.com company, it’s our mission to help small businesses succeed. Today, we’re going to talk about how to qualify as a Minority-Owned Business give you provide detailed steps to complete the certification process.

What are the benefits of Minority Business Enterprise (MBE) certification?

Minority-owned business certification is all about access. As a minority business owner, whether you need help marketing your business, getting financed, entering new markets, or optimizing your operations with new technology, certification opens doors and helps you get where you want to be. 

Corporate diversity spending programs to support minority-owned businesses

Most American corporations have a supplier diversity program in place, meaning they actively seek out minority suppliers to provide products, services, and raw materials.

 So, for example, if a company has a 60% diversity objective, any contractual agreement with a minority-owned business counts towards that goal—but the contractor must be certified, or it does not qualify. Having the certification gives you a competitive edge over those that are not, which could very well translate into business growth for you. 

Helping companies stay relevant

Aside from helping organizations meet their minority spending goals, top businesses embrace diversity because it helps them stay relevant and aligned with what people want today.

 Racial minorities make up about a third of the population in the United States, which means that it’s important to reflect their needs and preferences.

Companies that embrace diversity perform better, innovate more, and are 70% more likely to succeed in entering new markets. While you don’t need certification to be a part of this trend, it certainly accelerates the process.

Outside of what you can do for other companies, consider that most minorities, either as individual consumers or other businesses, will choose minority-owned businesses over others. Being a certified MBE helps them do so with confidence. 

Networking events for minority business owners

MBE certification gives you front-of-the-line access to programs and networking opportunities that help you connect with hundreds of top corporations under one roof. The National Minority Supplier Development Council (NMSDC) puts on many such events throughout the year, including golf tournaments, conferences, trade events, business alliance forums, and general business meetings. 

List your company national minority supplier databases

All MBE-certified businesses are listed in the national minority supplier database, meaning you’ll get your company’s listing in front of organizations in your area and across the country without having to do any extra marketing. Companies looking to diversify can then contact you directly with proposals, RFPs, and other contract opportunities.

Gain access to top expertise in your niche

From professional development to mentorship programs, management training programs, educational opportunities, technical advice, and peer-to-peer social networking, the NMSDC offers many events and services to help you succeed. These are programs not offered to the general public, and no matter what your challenges might be, there are plenty to choose from. 

Does your company qualify as a minority-owned business?

Even if you are not 100% minority-owned, you likely still qualify if:

• You’re a United States citizen
• Your business is at least 51% minority-owned or controlled
• Your business is a for-profit enterprise located within the US or in one of its territories
• The minority owner/member of your business carries out the daily management and operation of the business

 If you meet all these requirements, then you can apply for MBE certification. For the application, the NMSDC defines a minority individual as someone who is a minimum of 25% in one or more of the following groups:

• Native American
• Asian-Pacific
• Asian-Indian
• Black
• Hispanic

You’ll need to prove or confirm these criteria with documentation, interviews, site visits, and screenings.

Small Business Administration (8)a Certification

If your business is minority-owned and operated, the SBA 8(a) certification might be another avenue for you to pursue as it allows you to apply for federal contracting opportunities. SBA 8(a) also gives you access to a Business Opportunity Specialist to help you navigate the process and provide support, counseling, executive development, and help you market your business to local and federal government programs.

You do not have to be MBE certified to be eligible for SBA 8(a), but it will reduce the onus of proof and give you a much better chance of being approved. 

How to apply for the minority-owned business certification

Before you begin your application, you’ll need to compile various supporting documents according to your business structure. It is always advisable to take the time to gather all documents before you begin the application process. That way, you’ll have everything you need and will avoid any undue stress and frustration!

 All applicants must submit the following to complete the certification process:

• Completed application form
• A signed and notarized declaration
• DBA, if applicable
• Government-issued ID (driver’s license, state I.D., passport)
  Proof of citizenship in the United States (e.g., passport, birth certificate, voter registration card)
• Proof of ethnicity of owners, shareholders, and partners  (e.g., foreign passport, birth certificate, parent’s birth or death certificate)
• Blood degree certificate (for Native Americans, e.g., tribal registry letter or tribal roll register)
• Two years’ worth of federal tax returns for the business
• P&L statements, cash flow, balance sheet for the business
• Copies of any applicable notes payable
• Business licenses and permits, as applicable
• Occupational or professional licenses, as applicable
• Lease, rent, or mortgage agreements for the business premises (includes same for home-based businesses)
• CV (resume) of all owners, shareholders, and partners of the business
• Bank documentation (signature card) or letter from the bank verifying signatories
• Equipment lease or purchase agreements
• Copies of receivables invoice with proof of payment for at least two (bank statement, canceled check, etc.)
• Description of owned equipment, year purchased, and current market valuations
• Proof of bonding capacity (if applicable)
• EIN documentation
• Foreign Entity Certificate (if applicable)
• Application fee, based on gross annual sales
• Franchise documents (if applicable)

 Additionally, if you are part of a partnership, you will need to include: 

• Articles of partnership
• Certificate of formation (or of a limited partnership, whichever applies)
• Any partnership or profit-sharing agreements
• Proof of capital investment
• Proof of partnership purchase

 Corporations must include the following:

• Certificate of corporation
• Assumed name certificate*
• Articles of incorporation
• Articles of amendment*
• Governing bylaws
• Proof of capital investment
• Minutes of your first and last board meeting
• Minutes of the last meeting where new officers were elected
• Copies of all stock certificates that have been issued
• Copies of both sides of the next consecutive not-yet-issued stock certificate
• Stock ledger
• Proof of stock purchases
• Copy of the purchase agreement or buy/sell agreement with applicable proofs of payments*
• Copy of any stock options or outstanding ownership options
• Any agreements that restrict ownership or control of minority owners*

*if applicable 

LLCs must also submit the following: 

• Assumed name certificate*
• Certificate of organization
• Articles of Organization (or Certificate of Formation, whichever applies)
• Articles of or Certificate of Amendment*
• Operating agreement
• Proof of Capital Investment
• Minutes of organizational meetings
• Minutes of the most recent meeting where you elected managers/members
• Copy of all certificates of ownership
• Duplicate of both sides of unissued next consecutive membership certificate
• Copy of ownership transfer*
• Copy of membership transfer*
• Proof of unit purchase
• Copy of the purchase agreement or buy/sell agreement with applicable proofs of payments*
• Copy of membership unit options or other outstanding ownership options
• Any agreements that restrict ownership or control of minority owners*

as applicable* 

Completing your application to become a certified minority-owned small business

Once you have your documents in order, here’s what you need to do to complete your MBE certification application: 

1. First, create your account and logins

Go to www.nmsdc.org and set up your account. This is a two-step process, so be sure you have access to your email to validate your account. When you receive your email, click on the link to verify. Once you’ve done that, you’re logged in and can begin the application.

2. Click on the link to start your application

Enter your federal employer I.D. (EIN) number when prompted. This will confirm that you are not already in the system. If you are already in the system, contact your affiliate directly to find out why. If you are not in the system, you will advance to the next section.

3. Answer the prequalification questions

These are yes or no questions. You must be able to answer yes to all questions before you move on to the certification application.

4. Complete the MBE certification application

There are six sections on the application: general info, ownership info, products and services, references, documentation, and declaration. Under references, you will need three customer references and two bank references.

 You’ll see a navigation bar at the top of the application window. This will show you where you are in the process of completing the application and will also give you a color-coded status as to your progress in each section.

 You can access any of the sections individually by clicking on the corresponding page in the navigation. This means you can skip ahead or go back without clicking the back or forward buttons on your browser. When there are errors or incomplete areas on the application, they will be indicated in red, so it’s easy to see what areas need your attention.

 As you complete each section, even if you need more information, click “save” on the navigation bar. Once saved, you can pick up where you left off if you have to return to it.

5. You can complete your application in multiple sessions if needed

If you run out of time or need more information to move on in the application, save your work and log out. When you log back in again, you’ll select the application in progress and be able to resume the process.

 A few things to note about the application:

• If you attempt to leave a section without saving your work, the system will prompt you to save or continue. If you continue without saving, the entries you have already made will not stick.
• All items in red must be completed before you can complete the application successfully.
• New questions or fields may appear based on some of your selections. If that’s the case, those answers are required as well.
• Under ownership information, totals must add up to 100%.
• You’ll need to know your NAICS code and be able to provide a corresponding description of your products and services.
• When each section is completed, a green checkmark will appear in the navigation pane, corresponding to each individual page. You cannot finish your application until all pages are green. 

Uploading your documentation

In the documentation section of the application, you must upload all documents listed. However, some documents might not apply to your business structure or your type of company. If this is the case, click the n/a button, which means not applicable.

If you do not have a requested document available, you can also click n/a, but you must explain why you don’t have the document. For example, you can click n/a under “Driver’s License,” but you also must explain you don’t drive.

 Uploading is straightforward. You’ll first click on the “browse” button next to the category and navigate to the file on your computer. You don’t have to wait for the upload to complete to go ahead and upload more files.

 Once you have completed your uploads, click the acknowledgment at the bottom of the page before moving on.

The declaration

In the final step, you’ll need to print the declaration so you can sign it and have it notarized by an attorney or notary public. Once you’ve printed the document, go ahead and sign out. When you have the notarized copy ready, you’ll need to scan and upload it back into the application.
Pay and submit

When you complete all sections, the submit button will be enabled. Once you click that, you’ll be taken to the payment gateway to pay the processing fee of $300. Methods of payment vary between affiliates, but you will likely have the choice of using your credit card or PayPal.

Once your payment is submitted and accepted, your application is complete. It usually takes about 90 days to process an MBE certification application, after which you can look forward to all the benefits we talked about today.

You're on your way to joining a powerful group of certified minority-owned businesses! We hope you find these tips helpful. Check out the Go Getters community to connect with other small business owners and get more helpful advice to support your success.