Every business owner knows how expensive it can be to start and maintain a business. If you’ve dreamed of owning a business for years and are finally ready to leap, you’ll want all the financial assistance you can get. However, with all the finances that accompany borrowing money, you’ll want to take out as little in loans as possible.
This is where grants for small businesses come in. Grants for small businesses are not loans. Instead, they are sums of money offered by the government or groups that do not require repayment. That means no collateral, no interest, and no late fees. The money is yours.
There are countless grant opportunities for small business owners; you just need to know where to look and how to apply.
Identify Your Needs
Before beginning your search for loan and grant opportunities, it’s imperative to create a detailed financial plan. This will detail the viability of your business idea and create a focus for investors. You should create a brief explanation and analysis of your income statement, cash flow projection, and balance sheet. With this snapshot of your business’s financials, you’ll have a clearer picture indicating the loans and grant opportunities you will need to pursue.
Next, you’ll need to do some research to figure out what loans you qualify for, how much is a reasonable amount to take out, and what to look for in a grant.
- Recognize Your Qualifications
There are factors that better qualify businesses for specific private or government grants. Criteria that could set you apart and qualify you for specialized grants/programs include:
- Industry— The status of your business is an important component in qualifying for a loan. The sectors that qualify most frequently are nonprofit organizations, green businesses, rural businesses, and women-, veteran-, immigrant, or minority-owned businesses.
- Location— Some grants may only be available in certain cities or underserved communities.
- Financial Circumstances— Some grants offer relief/recovery assistance to help businesses facing significant losses.
- Start Your Search for Government Grants
Finding the right grant for your small business will take some time and research. A preliminary online search may get you started, but you’ll find yourself wading through masses of information unrelated to your specific needs. Instead, begin by visiting sites related to your industry, location, and financial needs when searching for government grants.
Where to look for government grants:
- Start with the resources provided by the U.S. Small Business Administration (SBA).
- Search grants on USA.gov.
- Search grants on grants.gov.
- Research U.S. Department of Commerce and U.S. Economic Development Administration grants.
- Search your state’s department of commerce’s website.
- Search your local government’s websites.
- Start Your Search for Private Grants
Government-based grants aren’t the only option for small businesses. Small business grants are also available through private organizations such as large corporations, non-profits, research, and technology companies. Private companies offer grants based on the nature of the business and may also cover costs government grants won’t, such as operating expenses, debt payoff, or business expansion.
Where to look for private grants:
- Use sites like Grantwatch.com.
- Search related industry-specific businesses such as FedEx, The Coca-Cola Foundation, or Idea Cafe.
- Search grants by your location or demographic.
- Find a small business counselor through SBA for guidance.
- Submit Your Applications
Once you’ve found the grant options right for you and your business, it’s time to start the lengthy approval process. Small business grants are highly competitive. Planning and completing your application properly is paramount to approval.
As the specific steps vary widely for each grant, be sure to conduct your research on the necessary documentation, information, and timelines before you apply.
Tips for submitting your application include:
- Provide accurate and complete information— Incomplete applications can delay or eliminate your request from the review process.
- Develop your business plan— Clearly identify how your business goals align with the purposes of the grant.
- Use your team— Experts such as accountants or consultants can add influence and credibility to an application.
- Stay in contact— Making professional contact with the grant office can help you stay informed of the process while also allowing you to gain answers to questions or concerns you may have.
Is a Small Business Grant Right for You?
Finding and applying for a small business grant is a lengthy process requiring time and determination. Before diving into the search, take the time to evaluate your current situation:
- Can you dedicate the time and resources to finding and applying for a grant?
- Do you have the knowledge and resources to complete the process on your own, or should you hire a consultant?
- When do you need the money? The grant process can sometimes take up to or more than a year.
- Are there other, closer resources available to you now, such as personal credit lines or friends/family investment opportunities?
The idea of free money to start or expand your business seems like a dream, but it’s not an easy venture. Take the time to decide based on your needs and the criteria your business meets.