How to Get a Small Business Grant?

What Are Small Business Grants?

It can be hard to find the best funding option for one’s small business, and many lenders will want something in return, making the choice even more stressful. For instance, a lender may decide to charge a business owner interest when he or she takes out a loan. When an entrepreneur is looking for investors, it may be necessary for them to give up a certain amount of their company ownership.

That said, there is a financing option where the business owner does not have to submit interest payments and can maintain full ownership of their business. They may, in fact, apply for business grants. Various organizations, including state and local governments, as well as federal agencies, offer small businesses money in the form of grants. Federal grant programs give money to individuals or groups that require capital to achieve defined goals. This type of financing does not have to be paid back by the borrower, unlike business loans.

Who doesn’t like the idea of free money? Unfortunately, it can be very difficult to receive one of these sought-after grants. Also, the money cannot be used for just any reason. Rather, it must be used to fulfill the goals identified by the providers of the grant.

If a business owner chooses to apply for a small business grant, he or she will have to explain how they plan to use the money. Also, they will need to follow a demanding reporting schedule.

Prior to applying for a grant, a business owner should explore the available options. Grant organizations will post their guidelines publicly so that applicants can review them beforehand. The application process is rigorous, so an entrepreneur should avoid applying to grants which they are not eligible for.

What Are Federal Small Business Grants?

Typically, small business owners interested in government grant programs will first go to sites like Grants.gov and SBA.gov.

The unfortunate truth is that government grants for small businesses are hard to find, simply because there are not many available. Also, there is a lot of competition for the few that exist.

Though the Small Business Administration (SBA) has a page on its website for finding and receiving grants, it sends the viewer to Grants.gov. This is the central information hub for available grants.

A small business owner may have better luck looking at the Small Business Innovation Research (SBIR) and Small Business technology Transfer (STTR) programs. The SBIR offers grant money to women and groups who are considered to be in need of economic assistance. The STTR, meanwhile, is an option for most business owners. Both organizations are interested in businesses that focus on their mission: research and development initiatives between the public and private sectors.

Often, these kinds of grants are offered as large amounts of money. They typically begin at $150,000 and can be even higher depending on the project and its goals.

Small Business Grants at the State and Regional Level

State and regional governments offer grant money to help encourage business growth. In California, entrepreneurs can get business grants from the government. That said, this money is often hard to get. Also, when funds are available, the chosen businesses must meet the goals or mission of the government program. Their goals are often related to specific tasks that the government agency is trying to achieve.

The Small Business Administration offers some grant money, but it usually targets other funding organizations that are responsible for finding promising projects. As an example, the SBA provided financing for the Entrepreneur Fund. This group is a lender approved by the SBA that gives capital to entrepreneurs in disadvantaged communities.

The government also offers funding to help support exporters. This program is called the State Trade Expansion Program (STEP). Unfortunately, its availability is limited and is restricted to certain states. That said, there is a part of the program called the Office of International Trade. This program promotes exporting on a national level.

Small business owners can explore available government grant programs on the state level by looking at the United States Economic Development Administration.

Corporate Small Business Grant Options

There are many organizations that offer grants to small businesses. As an example, the National Association for the Self-Employed (NASE) gives a $4,000 grant to active members once a month. However, only members can receive this award, and they are selected based on an assessment conducted by the organization.

Visa also provides grant money to small businesses via a program called the Visa Everywhere Initiative. This project offers funding to small business owners who come up with unique ideas to solve payment problems. If a business owner runs a technology company that handles payments, this could be a good opportunity.

FedEx also has a popular grant program known as the FedEx Small Business Grant. This grant offers a grand prize of $50,000, which is given to three winners. It also gives $20,000 to seven other winners.

Small Business Grants for Certain Demographics

In general, small business grants are not accessible to individuals hoping to create small ventures. That said, there are certain groups of people the government would like to support. The largest of these groups are veterans, women, and minorities.

Small Business Grants for Veterans

Grant money is available for disabled veterans, but in general there are not many resources provided for the average veteran. There is financing available as low-interest business loans, however. Below are some of the funding programs accessible to veterans:

• Vocational Rehabilitation and Employment (VR&E): This program is offered by the United States Department of Veterans Affairs (VA), and it offers money to disable veterans. In order to qualify, a veteran must have suffered a service-related disability that affects their ability to be employed. The VA requires that applicants present a disability rating.

• Vets First Verification Program: The VA also supports this program for existing veteran business owners. While it is not a grant, it offers services to business owners with veteran status. These individuals will get priority on contracts at the state and federal levels of government, as well as access to funding and tax benefits. The program also provides training and other resources aimed at helping veteran business owners learn how to operate their business.

• The Street Shares Foundation: This organization provides programs for veterans which includes the occasional grant. The group suggests that veterans sign up to get updates or view the website for listings. When financing is available, there are three awards. First place is worth $15,000, second place is worth $6,000, and third place is worth $4,000.

If a veteran cannot find grants that they qualify for, he or she can apply for a small business loan.

Small Business Grants for Minorities

There are various organizations that offer grants to minority business owners. For example, the Small Business Administration provides the 8a Business Development Program. The program aims to boost socially and economically disadvantaged groups by giving them preference.

The Minority Business Development Agency provides minority entrepreneurs with advice on how to manage their small businesses. The organization offers resources and tips, including where business owners can find financing and grant opportunities. The organization can also connect small business owners for joint ventures.

There are also small business grant contests and local chambers of commerce that aim to help minority entrepreneurs.

Small Business Grants for Female Entrepreneurs

There are more grant opportunities for women entrepreneurs than ever before. There are grants at both the government level and the corporate and foundation levels. While there are not many grants available to women who are just starting out, there are a few exceptions.

Some of the popular grants designed for businesswomen include the following:

• Amber Grant: this grant awards $2,000 to women-owned ventures every month.

• Eileen Fisher: this grant offers a yearly prize of $100,000, which is given to ten women business owners.

• SBA programs: The Small Business Administration offers a number of programs that offer money to women in business. However, there is a lot of competition for these grants.

• Cartier Women’s Initiative: This grant is meant for women-led businesses that focus on social or environmental causes.

How to Apply for a Small Business Grant

Research All Options

Grants.gov offers a guide on how to identify federal grant programs. Even if a business owner prefers to use corporate or private funding sources, the procedures are worth studying.

After doing research, a business owner should look for grants that could be a good fit for their small business.

Look for Opportunities

A business owner should be sure to read the grant provider’s mission statement to see if they are a good candidate for funding. This process of applying can take time, so it is important that an entrepreneur focus on grants for which they have the highest chance of approval.

See If Qualified

Prior to applying for a grant, a business owner should make sure that he or she meets the provider’s requirements. It is important that one’s application is completely honest.

While corporate grants are less strict than government grants, and there are a lot of applicants, they tend to focus more on finding businesses with similar objectives.

Conclusion

Grants are great funding options for small businesses, but it can be hard to secure one. While it may be tempting to apply to every opportunity one comes across, it is better practice to focus on the grants that fit with the business’ goals.