For any business, a grant is a solid method for funding because you don’t have to give it back. The types of small business grants available are growing in number, which adds to the chances that you will be awarded.
Here’s everything you need to know about small business grants, including who is eligible, the options available and how you can apply.
A small business grant is money awarded to help fund small businesses and nonprofits on their path to success. Governments and private organizations offer small business grants. You can consider a grant to be a gift, because it doesn’t have to be paid back. Unlike a loan, a grant requires no collateral, fees or interest.
Although the money is free, a grant may come with terms attached. The grant-giver may speculate how you can use the funds. For example, a grant may be provided to hire more employees, so if you use the money to buy equipment instead, you’ll have to pay it back. You may also face legal ramifications.
Eligibility for grants depends on who’s giving them. For example, a government small business grant won’t be provided to cover operational expenses or pay back debt. Government grants are most attainable for nonprofits related to medical research, technology and education.
However, organizations provide small business grants for:
As alluded to, grants come from two main sources, namely the government or private organizations. Private organizations like charitable foundations may also offer grants.
Although it would be helpful to have, there isn’t a centralized database for all grants. Instead, you have to search for specific types of grants based on your needs. But, we’ve compiled a quick list of places to start.
•Small Business Innovation Research Program
1.FedEx Small Business Grant
2.Patagonia Corporate Grant Program
3.Eileen-Fisher Women Owned Business Grant
1.First Nations Development Institute Grants
2.Veteran Small Business Award
Free money is the best funding method, but it doesn’t make it the easiest. Since you don’t have to pay back the grant, organizations do have to be highly selective in who they award the money to.
For starters, the application process tends to be lengthy (but, let’s face it – it has to be that way). To begin, it’s best to find a grant that specifically meets your needs. Then, you can follow these best practices to boost your chances of winning the money:
•Before you start the application process, double check the requirements. You have to be honest here. For example, the grant may be designed for women-owned businesses that offer a technological solution to protect the environment. If you’re a women-owned business but that’s not your market, then there’s really no point in going down that path. Instead, spend the energy and time to find the type of grant that is meant for your business.
•Diligently read instructions and fill out the application in its entirety. Also, don’t go above and beyond word counts.
•If you have any questions or doubts, be sure to get in touch with a grant officer. People are available to help answer your questions. It’s better to be informed than potentially ruin your chances.
•You can count on having to provide a business plan. This should include your company’s purpose, how the grant will help achieve success and the ways by which you will adhere to the grants stipulations.
•Like with a job interview, it’s best to follow up after submitting your application. By creating a relationship with the grant officer, you can keep an open flow of communication without being overwhelming.
Small business grants are highly competitive. Whether they come from the government or organization, it requires that your business fits the requirements perfectly like a puzzle piece. When applying for small business grants, it’s also a good idea to have other funding methods in mind in case you aren’t awarded with the free money or need more.
For some, a merchant cash advance may be the right fit! A merchant cash advance offers you money upfront in exchange for a portion of future credit card sales. If you experience a slow month of business, then the money you pay back becomes a function of your sales, so it can be less stressful than having a fixed rate on a loan.
No one would refuse getting free money to help set their business up for success. For this reason, small business grants are highly competitive and not always the right fit for every small business. But, if you can find a small business grant that aligns with your needs, then it’s worthwhile to take the time to apply meticulously.