There’s no such thing as free money.
Or is there?
If you’re looking to start your business, arguably the most desirable form of financing
is a small business grant.
Small business grants are funding from the government or some other organization that
you do not have to pay back.
Let me repeat that.
You do not have to pay back money from a small business grant.
Interested?
Let’s learn more about small business grants, and see if there’s a way for you to get
one for your business.
Take a small business loan and subtract repayment, interest, fees, and collateral, and you have
a small business grant.
It’s just cold, hard cash that you get to keep.
These grants are awarded to help certain businesses or nonprofits succeed in building or growing
their business.
Grant awards can be anywhere from a few hundred to several hundred thousand, depending on
where you apply.
However, small business grants are generally pretty specific about what you can spend the
money on, whereas loans are a bit more flexible.
So if you scored a grant for developing a new kind of environmentally friendly building,
then you’ll likely have to spend the money on equipment and research, rather than say,
covering payroll.
If you misuse your grant, you may have to pay it back.
Even worse, you could be guilty of fraud.
In addition, not just anyone can get a small business grant.
Generally, small business grants are awarded to specific types of businesses for specific
purposes, such as developing technology, performing medical research, providing educational services,
or taking part in some kind environmental initiative.
The types of businesses that typically receive financial support from small business grants
include innovative technology companies, green businesses, rural businesses, women, veteran,
or minority-owned businesses, and nonprofit organizations.
The type of business you operate will dictate where you can seek grant money from.
There are a variety of government organizations that currently offer business grants, including
the Small Business Administration, Small Business Innovation Research Program, Small Business
Technology Transfer program, the United States Department of Agriculture, the Department
of Defense, the Environmental Protection Agency, the National Institute of Health—even NASA
offers grants to small businesses.
To search for grants across the federal government that your business might be able to qualify
for, we recommend visiting grants.gov.
Here, small business owners and entrepreneurs can fill out and submit grant applications
online.
There are also tips and tutorials for writing grants.
Remember: small businesses make up the backbone of the American economy, so the government
WANTS to be able to give money to worthwhile applicants to help their businesses grow.
But the federal government isn’t the only place you can seek out a government grant
for your small business.
Most states also offer grant programs for specific types of businesses.
To find grants offered by your state, we suggest visiting your Department of State website.
For example, the New Jersey Department of State has a business portal page where it
provides links to different organizations offering grants for different business types,
including those that deal with renewable energy, culture and the arts, urban development, job
creation, manufacturing, and more.
Of course, there are also hundreds of private organizations offering business grants.
These organizations are pretty specific about the types of businesses they will offer grants
to.
To find places where you can seek out a business grant, check out our comprehensive list of
business grants.
Our list includes government and state organizations, as well as private organizations that offer
grants specifically for women, minorities, and veterans.
As you can probably tell, it’s not easy to qualify for a small business grant.
Most grants are highly competitive, and filling out a grant application is a fairly involved
process.
For example, a grant application might require an outline of your proposed work and financial
data on your organization.
Here are the steps you need to take when filling out your business grant:
Examine and prioritize your objectives.
Most funding sources will demand that you pinpoint the exact objectives a grant would
fund and what steps you would take to meet those objectives.
This may include expansion of a business to create jobs, research and development of green
technologies, and projects to stimulate the local economy.
The key is to both be specific and realistic.
Get your business plan in order.
Your business plan will be the most important part of your grant application.
It is the roadmap that will help the grantor understand and trust your business.
So make sure your business plan includes the following:
An executive summary, which lays out your mission statement, a few facts about your
company, its history, and a short statement of your goals.
A company description highlighting the nature of your business and proposed marketplace,
as well as your strengths as a business owner.
A detailed explanation of your service or product line.
And your marketing, sales, and financial projections.
You should show your current sales, balance sheets, and what marketing efforts you will
use to increase these sales.
For this step, don’t be afraid to consult other experts such as your accountant or any
team members who may be able to help.
For more, check out our video on how to write a business plan.
Do research on the grant you’re applying for.
Research past recipients of the grant.
If you can, reach out to them directly and ask how they filled out their application,
and any tips and advice they may have.
Also be sure to read the terms and conditions of the grant closely, so you can understand
what you can—and cannot—use the grant for.
Look closely at your grant’s deadline.
Most grantors are sticklers about getting in your grant within the deadline.
So draw up a calendar of all the interim deadlines for the grant program and stick to it.
Is your business plan due by the end of February?
Then make sure it is in by the end of February.
Even better, get it in before the last day.
Fill Out the Application.
Most applications begin with a Request for Proposal, or RFP.
The RFP tells you exactly what the application package must include.
Do not deviate from the RFP in any way, as this could disqualify your application.
If a question doesn’t apply to your business, leave it blank, or fill it in with “not
applicable.”
As you go through the RFP, remember to convert your goals to objectives.
For instance, your goal may want to start an eco-friendly landscaping company—but
that doesn’t help the grantor understand exactly what you need the money for.
Your objective is to purchase materials and equipment that help nurture wildlife and reduce
air, soil, and water pollution.
Break your goals down into specific objectives that can be met and measured if you receive
funding.
That will help the grantor understand how their money would be spent.
Then you need to create a budget based around your objectives.
In other words, research the cost of the equipment and materials you need to purchase.
A grantor may not be able to finance the entire cost, but they may offer a grant for a portion
of it.
Most importantly, follow the parameters of the grant application and don’t leave anything
out.
After you complete the application, consider consulting with a professional grant writer
to review it before you submit.
The organization may also have a grant officer who you can reach out to with questions about
your application.
If everything looks good, submit the application along with the required documents via mail
or online if it’s allowed.
Also be sure to keep copies of all your documentation in the event of a mailing error or computer
glitch.
You wouldn’t want missing paperwork to derail your chance of qualifying for a small business
grant.
Once you submit your application, you wait.
And you might have to wait awhile, depending on the organization and how many applicants
submitted.
Generally, the wait time on a grant application is three to six months.
So if your funding needs are more immediate, we recommend you seek financing from another
source.
And that’s everything you need to know about how to get a small business grant.
We’re not going to tell you it’s easy to get a grant for your small business, but
it’s certainly worthwhile to try.
The money could be a no-strings-attached shot in the arm for your business.
For more advice on how to help your business succeed, visit fundera.com/blog.
You can also browse our YouTube channel, and subscribe to be notified when we publish new
videos.
Thanks for watching!