You are welcome breaking the mold – A blog series that dives into the unique business challenges and opportunities of underrepresented business owners and entrepreneurs. Learn how they grew or scaled their businesses, explored entrepreneurial ventures within their companies, or created side hustles, and how their stories can inspire and inform your own success.
Aspiring Native entrepreneurs face many challenges in developing small businesses. Complex land leasing laws, strained infrastructure, and a chronic lack of credit access all hinder Indigenous success. However, thanks to growing federal, organizational and tribal support, potential business owners have more resources available to them than ever before.
Navigating new financial mechanisms, tribal incubators and government programs can still present a challenge. By evaluating the resources available, and when to take advantage of them, original entrepreneurs make a great start in starting new ventures. Starting off on the right foot, with the right equipment, can make all the difference—especially when climbing systemic obstacles.
parent community development financial institution
Basic access to capital can prove to be a complex and frustrating hurdle for budding business owners. Chronic systemic discrimination, combined with general confusion about complex land laws, can hinder new businesses before they even get started. Generational poverty often means that Native residents do not have alternative means of obtaining start-up capital.
a May 2021 Report The National Indian Council on Aging states that 16.3 percent of Native households do not use banks. The same report noted that high poverty rates, systemic racism, and a lack of brick-and-mortar institutions on Native reservations have left many Indigenous people without sound financial standing.
Natives also cannot use land held in trust by the Bureau of Indian Affairs – meaning reservation land – as collateral. As a result, access to traditional banking and consequently business loans remain out of reach.
In response, many tribes or non-profit organizations have established Native Community Development Financial Institutions, or Native CDFIs. These institutions use non-traditional methods, often backed by tribal or federal funding, to lend to otherwise ineligible borrowers.
There are over 70 parent CDFIs across the United States. Some are tribally owned, such as the Lummi CDFI in Bellingham, Washington. Others have been established as regional organizations, such as the Native Community Capital in New Laguna, New Mexico. Many are part of a wider organization called the Native CDFI Network, whose website hosts a list of member institutions.
As Native or Indigenous organizations, these organizations understand land law, tribal sovereignty, and the issues facing Indigenous entrepreneurs. Native CDFI’s loan officers often use metrics other than credit score or collateral to offer financial literacy and credit-building programs to improve customers’ standing.
These groups also share many of the perspectives and experiences of the constituents around them, meaning that a wide range of business models can be encouraged and supported. One October 2022 Report Banking giant Wells Fargo noted that traditional, national banks often lend more often to tribal enterprises with an established presence, while CDFIs help cover the gap for smaller loans and riskier businesses.
Potential Indigenous entrepreneurs with access to Native CDFIs should take their first steps in lining up business capital and establish relationships. In addition to establishing credit, working with the CDFI to build financial literacy and refine the business model can get things started on a high note.
Business Incubators for Indigenous Entrepreneurs
Good products and services may be the cornerstone of successful business ventures, but they are only one part of the overall operation. Sustaining that success requires entrepreneurs to have a good understanding of cash flow, marketing, scale, and a wide range of other topics.
Indigenous-led business incubators provide a valuable niche, combining traditional business understanding with a deep understanding of a community’s traditions, needs and issues. Where non-native incubators may falter in addressing challenges specific to native entrepreneurs, indigenous incubators operate from a native approach, tailoring their programs to fit their communities.
For Tuba City, Arizona-based Change Labs, an incubator serving Navajo(Dine) and Hopi peoples, that means initiatives like providing storefront space and no-credit-required micro-loans, according to them Theory of Change Report, These tailor-made programs address the limited availability of workable retail space on Navajo and Hopi lands, as well as a widespread lack of credit.
Incubator cohorts typically consist of dedicated programs packed with classes, projects, and networking. These groups often connect participants with mentors experienced in their chosen industries, building relationships and later venturing out on their own.
Like the original CDFI, the Indigenous Incubator is built for both tribes and regional organizations. While Change Labs specifically targets the Hopi and Navajo tribes, Traverse City, Michigan-based Arrowhead Incubator assists entrepreneurs in that area. While many incubators are not completely off the ground, the road to 2020 Native American Business Incubator Act The goal is to increase that number significantly. Where there is no resource now, there may soon exist.
Native entrepreneurs looking to grow their businesses or who are unsure of their next steps may be worth it to explore an Indigenous-led business incubator through their tribe or regional support. In the absence of a nearby resource, larger incubators such as the Spokane-based Native Business Center provide A range of online classes and workshops,
Economic Development Organization for Indigenous Entrepreneurs
Even though the Indian country is struggling with wealth creation, national organizations work to address those issues and develop strategies for new native entrepreneurs. Many of these organizations develop programs to finance and support indigenous businesses. Some of these organizations include:
The National Center for American Indian Enterprise Development offers a wide range of programs to support everything from procurement to securing government contracts for Indigenous small businesses through the Small Business Administration’s 8(a) program. The center also offers the Native Edge Institute, one-day in-person events that provide focused bursts of business training.
The Center for Indian Country Development at the Federal Reserve Bank of Minneapolis, which provides data-driven research on industry trends facing Indigenous businesses, and makes policy recommendations.
The National Minority Supplier Development Council certifies and supports businesses whose majority owners are Native American, Asian-American, African American, Asian-Pacific or Hispanic. Council connects member businesses over 500 Corporate MembersProvides seminars and training, and offers a variety of capital access programs, such as development initiatives,
In addition to wide-net organizations like the ones above, there are American Indian Chambers of Commerce in many states, such as chapters in Oklahoma and New Mexico. These organizations provide advocacy, management and networking services to locally owned businesses in their given areas, making them important and powerful tools for accessing localized support.
Federal and Tribal Government Programs for Indigenous Entrepreneurs
New COVID-19 era legislation has poured unprecedented money into Indian Country and spurred the development of new federal support. Some of it is directed toward small businesses, primarily through offices such as the Small Business Administration, the Bureau of Indian Affairs, and the US Department of Commerce.
1. Small Business Administration
The SBA provides free technical assistance to business owners through the Office of Native American Affairs. The administration also partners with Native-led organizations such as Redwind and Sister Sky, Inc. to provide entrepreneurship workshops for Indigenous business owners. also administers 8(a) Business Development ProgramProvides federal contracting preference to certified minority-owned businesses.
2. Bureau of Indian Affairs
Bureau of Indian Affairs supports indigenous entrepreneurs through Native American Business Development Institute, which can finance feasibility studies and market research for business plans. agency also runs Indian Credit Guarantee and Insurance Program, Which can help provide collateral and support for first time borrowers.
3. US Department of Commerce Minority Business Development Agency
Finally, the Minority Business Development Agency of the U.S. Department of Commerce provides research, market data and information to minority-owned businesses. Wide range of core-focused business grants and projects,
It is also worth checking with the individual tribes and their respective economic development institutions. While tribal gaming is a force to be reckoned with in generating tribal revenue, tribal acquisitions and diversification are on the rise – a tribal member’s small business may be the best fit for the tribe’s economic strategy. Alternatively, tribes may have support programs and individual assistance available for citizens running new ventures.
Use what is available to build your career
Starting a business in the best of circumstances can be difficult – and Native American entrepreneurs rarely start out in the best of circumstances. As more and more institutions grapple with the generational trauma of Indian country and how best to mitigate that trauma, parent business owners find themselves with more resources than ever.
Native businesses are important parts of local, tribal and state economies, generate approximately $50 billion per year across the United States, according to a report by the SBA. Furthermore, starting a successful business is one of the fastest ways to lift a family out of poverty and begin building generational wealth, combating one of the most longstanding problems in Indian country.
With the range of new opportunities available, it has never been a better time to start a new business, be it selling arts and crafts, providing IT services, contracting construction or large scale farming. Doing business Aspiring indigenous business owners should take advantage of the renewed interest in the good of Indian Country and secure for themselves self-reliance and success in the future.