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Small Business Grants
When it comes to starting your own company, one of the most important factors for achieving success is financing; if your business is going to get off the ground and thrive, it is going to need steady cash flow.
While most people think of debt, equity, or self-financing when it comes to funding a company, there is another route for funding: grants. There are federal, state, municipal, and private sector grants for startups and small businesses that may be just what you need to make your company successful.
Let’s take a closer look at business grants and loans, so you can learn how they can help fund your company.
What are Business Grants?
A grant is simply funding that is provided to a company, entrepreneur, or individual, from either a government, private sector, or nonprofit entity. In most cases, grants are given for a specific purpose, and companies or individuals must apply for them.
The Small Business Administration oversees many grant programs for the Federal government. However, most federal departments and agencies, including the Department of Agriculture, NASA, the Department of Defense, the U.S. Agency for International Development (USAID), and others have business grants available as well.
Each grant in itself is unique; there are different eligibility requirements and purposes for each. For example, there are many different types of business grants for startups; however, there are also grants for established companies seeking to expand their businesses in certain states or municipalities as well.
The organization providing the grant may require a business to provide matching funds, meaning that the grant’s award will be tied to the ability to provide some level of funds from a source other than the grant. Many other grants do not have any sort of matching funds, and the entities receiving them have little to no further obligation to the organization that provides the grant.
RELATED: Business Grants For Women.
Where to Get Small Business Grants
There are several different ways to get small business grants. One of the best places to get grants is through the Federal government. Each year, the Federal government issues billions of dollars in Federal grants for all types of businesses. These grants are administered across dozens of federal departments and agencies. Similarly, states and municipalities also issue grants to businesses and entrepreneurs as well, albeit on a smaller scale than the Federal government. However, if a grant is available in a location where your business is located or plans to operate, you could have a leg up on the competition.
Private sector and non-profit organizations also provide grants to businesses as well. For example, the Cartier Women’s Initiative provides $100,000 grants to women-owned businesses each year. Similarly, nonprofits like the Bill and Melinda Gates Foundation provide millions of dollars in grants each year as well.
While there are billions of dollars in grants out there, one of the challenges for small businesses is finding them. When you’re searching for government grants and loans, there are some free sources worth checking out, such as grants.gov or Guidestar.
If you expect to routinely pursue grant funding for your small business, you should also consider a subscription service to help you locate grants you may be eligible for. Services like Govtribe, for a paid subscription, are powerful search engines that allow you to establish parameters and seek out the types of grants you need. Their relatively modest fees are worth it if you’re looking for grant money.
RELATED: Business Grants For Veterans.
Grant Preparation and Submission
One of the most challenging parts of working with grants is preparing the grant proposal. Like the grants themselves, each grant proposal is unique, as are the committees that evaluate them and ultimately reward the funding.
If your company does not have experience preparing grant proposals, you may want to see if you can obtain examples of past winning grant submissions from the grant program in question; reviewing a successful grant proposal may help with your own proposal writing.
Alternatively, you could hire a grant proposal expert to spearhead your submission effort; an experienced grant writer might be just what your company needs to prepare a winning submission.
Once you submit your grant proposal ensure that the receiving organization actually verifies receipt; don’t let all of your hard work preparing the grant get lost in someone’s email inbox. The grant organization may ask for additional information from you or have specific questions about your proposal they want you to clarify; provide whatever information they need as promptly as possible and verify receipt of this correspondence as well.
If for some reason you are notified that you did not receive the grant, ask if you can get a readout or summary of why your proposal was rejected; learning where you fell short can help you be more successful the next time you prepare a grant proposal.
A Small Business Grants Overview: Parting Thoughts
Grants may be challenging and time-consuming to prepare. However, if you successfully compete for and win a grant, you’ll be able to tap into a source of funding with minimal restrictions and no repayment requirement. So, if you’re thinking about how to finance your business, make sure you take some time to research how grants could work for you.
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Thanks for reading our small business grants article.
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Check out How To Start A Business.