The Minority Business Development Agency, the only federal agency solely focused on the growth of minority-owned businesses, has undergone a significant reduction in operations. In March 2025, nearly all of its roughly 50 employees had been laid off. The remaining five career employees received Reduction in Force (RIF) notices on Wednesday April 9, 2025. While the agency remains statutorily authorized, this shift effectively guts the agency and ensures its dormancy.

This marks a major shift in the federal government’s engagement with minority business enterprises (MBEs), a sector that has historically faced structural barriers to capital, contracts, and market access.

A Legacy of Impact

Established by Executive Order in 1969 and codified by Congress in 2021, the Minority Business Development Agency operated for more than five decades as the federal government’s primary resource for minority business development. According to its FY 2024 Annual Performance Report, the agency helped facilitate over $5.6 billion in capital, contracts, and export deals for minority-owned businesses and contributed to the creation or retention of over 22,000 jobs.

Through a network of more than 40 business centers, the Minority Business Development Agency provided technical assistance to African American, Latino, Asian American, Pacific Islander, Native American, and Hasidic Jewish entrepreneurs. The agency also partnered with Historically Black Colleges and Universities (HBCUs), tribal colleges, chambers of commerce, and trade associations to expand outreach and service delivery.

Federal Statute and Sudden Scale-Back

The Consolidated Appropriations Act of 2021 made the Minority Business Development Agency a permanent federal agency, granting expanded authority to establish regional offices, enter cooperative agreements, and conduct research on economic disparities. While this statute affirms the Minority Business Development Agency's long-term mission, the recent staffing reductions raise questions about its capacity to fulfill these responsibilities in practice.

Although the agency remains authorized, the reduction to a core staff—now also subject to RIF—marks a significant limitation in federal support infrastructure for MBEs.

Impact on Business Networks and Supplier Diversity

There are more than 9.9 million minority-owned businesses in the U.S., generating over $1.8 trillion in annual revenue and employing 8.9 million workers. According to the Federal Reserve, these businesses are more likely to be denied financing or offered less favorable terms than their white-owned counterparts. The Minority Business Development Agency played a vital role in helping businesses navigate these inequities.

Read the full article about Minority Business Development Agency by Natalie Madeira Cofield at Forbes.