December 2020 Update: Due to the COVID-19 Federal Stimulus Package you can qualify for stimulus aid if you have a business. Before reading the information below, please see where you can apply for the Business Stimulus Package due to it being time sensitive.
You’ve worked hard getting your business plans off the ground and maxed out your credit cards, now it’s time to get some extra money to take it to the next level. Whether it is an award for your hard work or a celebration of what your business can offer, small business loans will be just what you need as a small business owner.
Small business grants are, according to BusinessesGrants.org, financial assistance programs made available to US business owners and entrepreneurs who have 500 or fewer employees. While typically from the US government, small business grants can range in where they come from, such as non-profit organizations or a for-profit company. Grant sizes range from around $500 up to $100,000.
Am I eligible for a small business grant?
That depends. Eligibility of the grants available often varies and is based on business administrations, location, income, ethnicity, gender, and experience in your business including how long the business has been in operation. Some may require essays or other materials to show off your needs for the grant. However, there are a multitude of grants to small businesses so there certainly something out there for you if you look hard enough.
Where Do I Look for Small Business Grants?
Five great places to look include:
Local Government Agencies
Some of the best opportunities are closest to home. Many states, cities, and counties, give money to small local businesses to increase jobs and tax revenue when planning your business. Not only that, but this grant money tends to be more specialized than national grants. So, if you fit the criteria and need the grant to start your business, you’re more likely to have less competition and more financing options.
However, many organizations won’t advertise their grants for whatever reason, so it would be best to call local agencies to see what they offer to check their websites. It never hurts to ask.
Federal Government Agencies
While the federal government doesn’t actually give grants to businesses directly, they fund foundations that, in turn, distribute the money to any small business that applies successfully. The Grants Program Management Office, part of Grants.gov, runs this, so to learn more check out their website. All potential opportunities are clearly listed online.
Almost all corporations have a grant allocation foundation used to enrich communities and small businesses. Inquire about opportunities offered by big corporations headquartered in your state or region.
The almighty Internet is great at revealing opportunities both small and large. With enough search bars, you’re sure to find something for your specific needs and purposes. Be sure to use the name of your State, city, and county, for more specialized searches or use terms that relate to you or your business for the best results. You never know when a grant could be listed on blogs or articles.
Word of mouth is a great way to learn about the experiences other people have had. Ask around and see if another small business owner in your area received a small business grant and then ask them if they know anyone else. Through the six degrees of separation, you’re sure to learn quite a bit about the grants that are offered, as well as how to properly apply and receive one.
Visit Local Libraries
Despite having a plethora of books, libraries also have a plethora of stored information ready to be accessed anytime. Some of this information may be incredibly esoteric to your location or not found anywhere else, so it’s best to pop over and see if there’s anything useful to you. Inquire about grant books and directories for rich springs of potential grants. You can also ask the librarians if they know anything about small business grants. As we’ve seen in the last tip, you never know what someone might know, especially if it’s their job to know things.
What can I use my grant for?
You’ll hear a lot of things about what a small business grant can be used for, but to clear up some confusion, here are things that the grants can and cannot do.
- If the grant is from the US government or state, it cannot be used to pay off debt, start a business, or cover operational expenses (although a few exceptions exist).
- If the grant is from a non-governmental agency or corporation, their stipulations for use may be different and should be investigated. Thus, if you get a grant from a corporation you may very well be used it to start another small business.
However, if you’re a small business who specialized in scientific research and development, government grants exist for you since this is a highly sought after field. Small R&D business owners should look at the Small Business Innovation Research (SBIR) Program for potential opportunities.
Applying for Grants
Give or take a few unique cases, most grants will require a questionnaire about personal details such as demographics, income, and business logistics and often require a written grant proposal.
This will take a lot of time, attention to detail, and patience. Grant applications can take days or weeks and require essays after exhaustive essay. There’s a reason that so many granting writing help agencies exist out there; it takes time, and you don’t want your time investment to go to waste. If you find you need some help writing your grant proposals or applying for your grant in general, the internet offers great services for you.
Now that you know how to get a small business grant, it’s time to go actually get one. Hit up the search engines and get your telephone ready because it’s going to be quite a while gathering up all the grants you qualify for. Do the preliminary research for the grant and make sure you’re well prepared in what it asks for. Perhaps ask a trusted to help review your application materials or hire someone to make sure you’re on the right track to success. Getting a small business grant will be a huge deal for your business, so take all opportunities seriously. You, your employees, and your business as a whole will thank you for it.
How to Increase Your Chances for Getting a Small Business Grant
Running a small business can be difficult, between promoting your brand, finding the right employees, and managing workflow, among other things. Add money issues into the mix, and it can feel all but impossible to stay afloat, let alone get ahead and grow the business into what you know it can be.
A small business loan is always an option, but loans aren’t accessible to those with limited assets or poor credit, plus they add another expense that needs to be paid back. That’s where small business grants come in. A small business grant may be just the thing your business needs to thrive and even grow.
What Is a Small Business Grant?
Small business grants are funding provided by the government or other organizations to small business owners. Unlike loans, grants don’t need to be paid back.
The government and other organizations generally provide grants that are furthering a goal that’s compatible with their interests or will advance the greater good, such as:
- Science, medicine, or engineering innovations
- Advancing research into clean and renewable energy
- Education research and technology
They’re also sometimes given to business owners who belong to marginalized groups, such as:
- People of color
In general, if you can prove that your business is serving the greater good in some way, even by providing jobs in an economically disadvantaged area, there’s a good chance you’ll be able to find a grant you qualify for.
Understand the Pros and Cons
Understanding the pros of receiving a small business grant is easy: you’ll receive free money to run and grow your business. Plus, once you receive your first grant, it tends to increase your chances of winning additional grants down the road.
It sounds like an open and shut case, right? Well, before you decide to apply for one, take a look at the potential downsides.
Applying for Grants is a Challenging Process
The process of searching for and applying for grants is a long and difficult one, so it’s essential to start early and plan to set aside a lot of time to work on it. We’ll go deeper into the application process in a bit.
Grants Come With Requirements
Although grants don’t need to be repaid, there are a few strings attached. Namely, it would help if you were very clear about what the funding is intended for, and you’ll need to make sure to use it for only that.
If you use the funds to pay for something outside of the grant’s scope, like paying employees or covering expenses, you may forfeit the grant and have to pay it back. You’ll need to keep track of how the money is being spent and regularly report your progress.
Steps to Get a Small Business Grant
If a small business grant sounds like the best option for your business, even knowing some of the drawbacks involved, it’s time to get started.
Create a Formal Business Plan
Small business grant applications require a detailed analysis of your business, so before you even begin searching, it’s a good idea to have one in hand. A few things that business plans typically include:
- Executive summary: gives an overview of your business, mission statement, and goals
- Business description: detailed description of what the business does and how
- Business Structure: lays out the company’s operating structure
The business plan will also contain a funding request if you’re applying for a grant. The Small Business Administration has a helpful business plan template to get you started.
Find Grants Your Business Qualifies For
One of the more overwhelming parts of the small business grant process is searching for grants that your business qualifies for. Some great places to start are:
Most grant searching platforms will allow you to filter grants by things like business type, location, and other qualifiers to simplify the process a bit.
Small Business Grants for Specific Goals
As we mentioned earlier, many grants are for a business that promotes a cause similar to the organization awarding the grant. Moreover, this can be as specific as designing innovative eco-friendly transportation solutions or as general as improving the economy of your local area.
If your business meets a specific need that benefits the greater good, try searching online for “[your goal]” + “grant,” and you might be surprised by how many matching grants you find.
Small Business Grants for Special Groups
There are also grants geared towards furthering specific groups of people who have historically been given fewer advantages in the business world. Such groups include:
- People of color
- Low-income residents
If you’re a business owner who belongs to a marginalized group, you’ll find grants on the Small Business Administration and Grants.gov sites. But also look for organizations specific to your community for grants that might not be listed elsewhere. A couple of examples are:
Regardless of the type of business you own, it’s worth looking into grants that apply to you if you belong to a marginalized community.
Applying for the Grant
Once you’ve narrowed down your choices to a few grants you’d like to apply for, it’s time to start the application process, also called writing a grant proposal. The grant application will look a little bit different depending on the organization, but they’ll all require at least:
- An overview of your business (that’s where the business plan you created earlier comes in handy)
- An explanation of the problem your business will solve (the mission statement that hopefully aligns with the grant writer’s purposes)
- A detailed plan of how your business will solve that problem, including how much money is needed and how it will be spent
You can think of a grant application like an extreme version of a job cover letter or college entrance essay.
Moreover, this is the part of the process where you need to sell your business goals to the grant writer and convince them why you deserve the grant more than all the other applicants. Most businesses handle writing a grant proposal in one of two ways.
Apply for the Grant Yourself
The simplest, albeit scariest, way to handle writing a grant proposal is to do it yourself. You know your business better than anyone, so it makes sense that you would be the person best
positioned to present your goals to the grant writers.
Hire a Grant Writer
If the thought of writing a grant proposal on your own is overwhelming, you’re not alone. Fortunately, there are professional grant proposal writers who can take care of it for you.
The main downside to this is paying for the service with no guarantee that it will win you the grant. Still, it’s worth considering to have a convincing grant proposal that you can use as a template for future applications.
Although the process to get a small business grant can be tedious, it’s relatively straightforward and well within the grasp of the average small business owner. A few weeks or months of hard work can pay off tenfold and win your business the help it needs, making it more than worthwhile.