Starting a business and obtaining funding is very difficult. Not eligible for a bank loan without collateral. Don’t want to max out your credit cards that carry an 18% interest rate. Business is not suitable for Angel investing. How about looking into obtaining a small business grant?
Funds are available for small business development in many communities. These funds are sourced from government or non-profit organizations and there are no repayment requirements – provided your small business meets the Grantor’s requirements, you can apply and may receive ‘free’ funds.
Grants For Startups
The U.S. Small Business Administration is the U.S. government agency charged with guaranteeing loans specifically for small businesses, but the SBA also issues grants. Other federal, state, and local entities also provide small business grants. See Grants.gov for a full detailing of what’s available and how to quality. Also, look at and apply for a State Trade Expansion Program grant for doing business overseas.
Qualifications
Startup grants are awarded based upon the business’s location, size, type, and owner status. Owner status includes a preference for military veterans, green/eco businesses, woman-owned, minority-owned, and specific non-profits.
Eligibility
As stated above, you may have a better chance of receiving a grant if you have a certain status. Criteria will differ from grantor to grantor so you will need to check the eligibility requirements of each. You can check the requirements of each grantor by going to their website or calling – make sure you do this BEFORE you apply.
Payback
Less than 1% of startup businesses use federal or state grants for funding. This reality is sad because there are funds available and they do not require repayment. I am not saying that obtaining grant funds is easy but if you are in need and you do what is required the funds are available.
How to Apply
The process to apply for small business grants is not easy. Applications are long and taKe time to complete. Here are some suggestions on application…
- GET FREE HELP Go to your local SBA or Small Business Development Center. Many have training classes on how to apply for grants and assist in filling out the required forms and gathering the proper documentation.
- RESEARCH THE GRANTOR Make sure you know the entity from which you are requesting the grant. Know the criteria for applying and the deadline of data submission.
- COMPILE DOCUMENTATION Get all of the documentation required and submit it in a timely fashion. Allow time for the grantor to contact you if more or different documentation is required.
- FULLY UNDERSTAND THE GRANTOR’S REQUIREMENTS Make sure you fully understand the requirements of the grant you are applying for, and meet those requirements fully
- WRITE A STRONG PROPOSAL If necessary hire a professional to assist in the writing and compilation of the documentation required by the grantor. Make sure you fully research the qualifications for who you are hiring – consultant, accountant, lawyer, professional grant writer.
Finding Other Sources
Grants are available from many sources. There are many private and community foundations, corporations, and other groups that provide small business grants. Check out Candid.org. They do charge for their service but they have a good online Foundation Grant Directory. There are many private companies that offer grants, just to name several…
- VISA Corporation – Grants of up to $150,000 to startups and fintechs that solve business payment problems
- FedEX – for companies with less than 99 employees or startups $25,000 grants
- Patagonia Inc. – grants for non-profits that are eco-friendly in their service/products from $20-30,000
Summary
While applying for grants is not an easy process it may be worth the effort. Get to know the grantor organization and apply in a timely and accurate fashion.
