Small Business Grants
Small business owners will need to apply for grants, prepare a business plan, define their purpose, and consider taxes for their future or existing businesses. Whether you gain financial assistance through business loans or a grant program it's good to be prepared.
Applying for Small Business Grants
Now that you've browsed and found the right grant, it's time to start the application process. Most grant programs will require certain basics. As you complete the grant requirements, keep these considerations in mind.
An organization giving you money for your business wants to know that you've thought it all out. You'll prove that with your business plan. Ideally, you did this when you started your business. If not, draw it up before you start the application process.
If you do have an existing business plan, take some time to review and update it. Your business plan should project at least five years into the future. It should present a mission statement that outlines your vision, goals, and differentiation.
It should also include your company summary that lays out your business' background, resources, management, ownership structure, a SWOT analysis, and a defined marketing plan.
What will you use the money for? While some grants are general and can be used for whatever you need, some are very specific in how the money should be spent. Understand the grant specs to determine if the money will be earmarked for things like equipment or marketing only, and craft your proposal accordingly.
Read the grant regulations carefully, as there may be other specifics that you may need to adhere to in order to keep the awarded funds.
For example, the grant may require that you maintain your business in a specific area, serve a specific population, or stay operating for a defined period of time. Or, you may see the perfect grant for your tutoring service, but it's only open to people in a certain state or only for certain tutoring topics.
Take the time to read all of the application requirements and ask questions where you're confused. Not following these rules could result in being required to repay the funds you were awarded.
Follow the Rules
Some grant applications can be complex and confusing. However, missing one document or piece of supporting material can knock you out of the running. Also, be aware of limitations to grant offers so that you're wasting time applying for money that you don't qualify for.
Close adherence to grant guidelines will ensure you're in the running. Many grant applications are tossed out of the running before getting a good look because of administrative mistakes.
Write for Comprehension
The grant reviewers sometimes have thousands of applications to review. They may just look past your submission if they have to fight through overly verbose paragraphs and complicated language.
Demonstrate the mastery of your business but avoid the overuse of jargon and acronyms in your proposal. Build your proposal using clear, concise language that makes it easy for a reviewer to get through.
Leverage editable templates offered by grant providers to ensure proper formatting and organization. And if you opt to do it all yourself, at least enlist an editor or proofreader to read it over before submission.
Hire a Professional?
You could write up and compile your application on your own. However, you can increase your chances for success with professional grant writers who focus on nothing but grant writing. These professionals have an extensive history with what grantmakers are looking for and know ways to help your application stand out.
A professional grant writer will make sure that your application is error-free, well-researched, professionally presented, and adheres to all application submission guidelines. Of course, their services will cost you some money, but it's money well spent to ensure that your application is properly submitted.
Grant money is free, but it is free of tax liability. As you consider applying for or accepting a large public or private grant, consult your tax professional to see how or if the award will negatively impact your taxes and how you need to claim it to avoid tax issues.
Additionally, when you're claiming money from crowdfunding, angel investors, or venture capitalists, there may be specific rules to adhere to for tax reporting purposes.
Because aspiring small business owners can be so eager to get the money they need to get up and running, scammers are waiting to take advantage. When evaluating a grant opportunity, beware of grants that require a large application fee.
Many grant programs charge a nominal fee, but fees that range into hundreds of dollars are probably not legitimate. Also, be on the lookout for other scam indicators, like being asked for identifying information like tax identification numbers or bank account information.
Don't let the first "no" stop your search. There are a multitude of opportunities available, and it may take a few tries to get the money you need to get your business up and running.
Most grant programs are cyclical and roll around monthly or annually. Try to get feedback from the granting organization on why you were denied and bake that into your next application.
Also, don't stop searching. Every day new grant opportunities pop up. Set search alerts with Google for keywords like "small business grant" or "free money for small business" so that you'll be notified as soon as new opportunities arise.
To get the most targeted opportunities, alter your search to include terms specific to your business. For example, "small business grants for graphic designers" will yield results that are more focused on your business and more likely to get the grant.
Being awarded a grant can wipe out the financial barrier associated with becoming a small business owner.
While grants are a big help to starting your business, it's imperative that you have a long-term strategy for profitability to keep your business running and thriving. Most grants are one-time only help and not something that you can keep going back to for more funding.
Whether you pursue federal grants, contests, or niche programs, with the tools presented here, you can find the right grant or grants for your business and get started applying. Grants.gov offers a site full of resources on navigating the application process.
Unlike a loan, small business grants are essentially free money that you can use to build out your business plan. Awarded by the private sector and government, a flurry of grants is available, but not all of them will match your business.
With the resources below, you can look at all of the grants available and determine which one makes sense for your business goals.
Top 19 Small Business Grants Opportunities
Thankfully, many small business grant programs are available through different organizations, small business grant contests, federal agencies, and local governments.
Below we've rounded up 19 places you can find free grant money to start up a small business. Read through our suggestions, and then follow up on any that may apply to you or your business.
The following are our top 19 places to find a business grant:
1. Small Business Innovation Research Grants
The Small Business Innovation Research (SBIR) provides grants to fund specific projects to support small businesses focused on technological and scientific goals.
Browse across projects for agencies from NASA to the Department of Health and Human Services grants that tie in with your business and your expertise. Small business owners need to complete the three-part application process.
2. FedEx Small Business Grant Contest
FedEx fans the flame of entrepreneurial spirit with their Small Business Grant Contest each year. Small businesses compete for ten $25,000 awards and credits toward FedEx Office print and business services. The competition includes an application and a video.
3. Coca-Cola Foundation Grants
If you're a woman looking to start your own business, the Coca-Cola Foundation offers several grants to support environmental and cultural causes. The Coca-Cola Foundation has a grant program specifically designed to support economic empowerment and entrepreneurship for women-owned businesses.
4. Grants from IdeaCafe
For small business ideas that don't need a lot of upfront financing, apply for the IdeaCafe $1,000 grant geared toward "all forward-thinking businesses." The grant is open to small business owners or people contemplating starting a business. In addition to the grant money, you'll get some free promotion for your business on the IdeaCafe website.
GrantWatch touts a comprehensive database of grants for small business funding and other purposes. In exchange for your information, you'll get access to 1000s of grant opportunities from educational institutions, government agencies, community- and faith-based organizations, research institutions, and private sector businesses.
To access their listings, you'll have to register and adjust the search filters for small businesses and any different pertinent keywords.
6. National Association for the Self-Employed (NASE) Grant
If you're currently a member of the NASE, you can apply for a small business grant worth $4,000. There's no earmark on how to spend the grant, so you're free to use it for whatever your business needs.
Winners have used these grants to purchase computers and farm equipment, hire help, and develop marketing materials and website content.
7. The Zach Grant
The website, Fundera, sponsors a small business grant named in honor of Zach, the restaurant entrepreneur who inspired the site.
Their grant competition awards $2500 to the winner judged on quality, originality, and creativity. Their straightforward application process requires a three-minute video response to a given question.
8. Grants from Angel Investors
Unlike a grant, angel investors provide loan-free financing to help get your business off the ground. These funds are usually string-free and are less than $50,000, but some investors will require a small slice of your business in exchange for funds.
Dealing with an angel investor can be similar to working with a bank, as they'll expect a complete business plan, a formal pitch, and financials before cutting a check.
9. Money from Venture Capitalists
If your financing goals exceed $50,000, explore the venture capital market. Because of the number of venture capitalists with different focus areas, this option will take some significant legwork.
Once you find the right venture capitalist, you'll need to figure out what they need to see to grant you the funding you'll need. Because of the dollar amounts involved, you'll likely be asked to present more information about your business, financials, and other detailed data.
10. State Trade Expansion Program (STEP) Grant
STEP provides grants to help you get started for those interested in exporting goods. As part of a federal/state partnership, the federal government grants program works to grow the number of small businesses that export and help existing exporters grow the value of their overseas goods and services sales.
11. Amber Grant
In memory of Amber, a young lady murdered at 19, this grant is only open to women. The grant consists of multiple $1000 grants entered into an annual competition for a $10,000 prize.
12. State and Local Grants
One of your best sources for grant money is through state and local governments. Government grants on this list are national, but there are many state and local grants that go unclaimed every year. USA.gov and State Incentives can be direct to local grant sources.
Also, follow up with local small business incubators, entrepreneur programs offered through local agencies, and organizations like the SCORE Association, a non-profit national organization focused on providing guidance and counseling to new businesses.
13. Global Innovation Exchange Grants
Browse from a list of funds from entities all around the world. Each award relates to projects that spur or support innovation. Find one that closely matches your business plan and submit the required documentation.
Keep in mind these offers are global and may require doing business overseas. Read up on and understand what that means and if you'll need to acquire any specialized licenses or permits to operate in another country.
14. Grants for Agricultural Businesses and Farms
The USDA has established the Value Added Producer Grants for the enterprising farmer. The grants can finance business activities related to producing and marketing value-added agricultural products.
Planning activities may consist of feasibility studies or business plans for processing and marketing. Working capital expenditures can cover equipment, processing costs, or marketing and advertising expenses,
15. The Veterans Small Business Award
Making the transition from military life to civilian can be difficult. To help ease the transition, the Street Shares competition gives veterans a chance to win the funds they need to get a small business started. The grant program offers amounts from $4000 up to $15000 for the best submissions based on social impact, quality of the idea, planned use for the award money, and market fit.
16. Grants for Underserved Populations
Specific segments of the population are more likely to face barriers to bank financing for their small business. As such, many grant programs specifically target these communities. You can find grants specifically targeted at African Americans, Native Americans, Hispanic Americans, women, and veterans.
17. LendEdu Grant Search
Visit LendEdu for a free, comprehensive search engine of available grants. You'll find small business grant opportunities in the U.S. offered by the government and private sector. The engine searches factors like source, amount, and location across various categories.
18. Distance Learning and Telemedicine Grant
If your business ideas revolve around providing educational services in a rural community, the USDA awards $39.6 million in grants via the Distance Learning and Telemedicine (DLT) Grant Program.
The grant is designed to help rural communities leverage telecommunications to connect to one another and to the globe while turning the tables on the effects of rural living and low population density.
19. Crowd Funding
Not exactly a traditional grant, crowdfunding provides a source of free financing for your business. Make your pitch on sites like GoFundMe, Fundly, or Kickstarter. Each site has a slightly different set of requirements for raising funds.
Read and follow closely before going public with your funding campaign. Also, consider creating extra content like videos, collateral, and data sheets to give potential contributors a full picture of your business and your vision.
Small Business Grants FAQ
Do you pay grants back?
Like loans, most grants are financial aid sources that do not need to be repaid . Grants may be from the federal government, your local government, your college, career school, or any private or non-profit organization.
How do you find grants for a small business?
Small-business grants can be found at state agencies, private companies and government agencies. You can start your search by looking at Grants.gov and your local Small Business Development Center.
About the Author
Austin Andrukaitis is the CEO of ChamberofCommerce.com. He's an experienced digital marketing strategist with more than 15 years of experience in creating successful online campaigns. Austin's approach to developing, optimizing, and delivering web-based technologies has help businesses achieve higher profit, enhance productivity, and position organizations for accelerated sustained growth.Full Biography