Grants essentially are free money, providing businesses of all types, sizes, ages, and industries with the resources to grow without requiring anything in return.Learn what grant opportunities are perfect for your business, including what types are available, how to find them, and how to apply for them.
How Small Business Grants Work
Small business grants can be divided into two categories: those from the government (local, state, or federal) and those from private organizations. Many different types of small business grants are available, but not all grants are the same. Most grants are first come, first serve and based on need, so as long as you fulfill the requirements, you have a shot at receiving funding. Unlike traditional loans, which are available for any kind of business, your business must be eligible and match requirements for the specific grant you are applying for to receive funding.
How Much Funding Can You Expect to Receive?
Federal agencies, including the Small Business Administration (SBA), award billions of dollars every year in small business loans and grants to help fund startups, keep existing businesses thriving, and create jobs. Small business grants can range from a few thousand dollars to a few million. Government programs from federal down to state and local can provide small business owners with grant funding, tax credits, free training, no-interest loans, and other financial perks. Private organizations such as nonprofits function similarly but on a smaller scale, and can provide grants, equity investments, no-interest loans, and patent protections to business owners.
Do You Have To Pay It Back?
As a small business owner, knowing the rules and regulations surrounding your grant funding, including what you need to do after receiving a small business grant, is essential. The short answer is no. Grants do not need to be repaid once you receive them from a government or nonprofit organization. Grants are free sums of money awarded to businesses in need.
How Difficult Is It To Get Small Business Grants?
Many factors can complicate the process of applying for grants, including the grant itself, the level of competition, the longevity of the business, and how well you detailed your purpose for the grant. However, the SBA and most nonprofit grant organizations have resources to help guide you through the process. If you still run into difficulties, you can always turn to an attorney, business mentorship network SCORE, or nonprofit guide for help.
How To Find Small Business Grants
There are many ways to find small business grants. One way is to research online for funding opportunities. Government sites such as Grants.gov are excellent places to start your search because they offer the most variety of programs. However, there are also non-governmental sources where you can find grant programs. One option is to ask your local chamber of commerce or other small business associations in your area about grant opportunities and where you can apply. Depending on your location, you can check out local and regional grant programs that focus on specific industries, such as manufacturing or tourism.
Types of Small Business Grants
There are various ways to find small business grants, depending on the type of grant you are looking for. Local, state, and federal government agencies receive funding and offer resources to small business owners expressly for this purpose. If you’re looking to get support for your small business, keep in mind that there are many avenues to explore. Some funds are issued directly by the federal government, while others are distributed through state and local governments or private organizations such as nonprofits. After the funds are distributed, organizations then can use their funding to provide technical or educational assistance on a regional level. Below are some examples of resources across government levels.
Local Grants
Since local grant programs generally have less competition than state and federal ones, they are excellent places to start. Search online for your local small business development center (SBDC) or economic development center. SBDC websites and SBA local chapter websites should have information on grants available for your business. Additionally, you can contact your district’s elected officials’ offices about grant funding in your area.
State or Regional Grants
You can find out if your business qualifies for any state or regional grants by checking out the SBA’s website and exploring its information on available grants and funding programs. Another place to check is your state’s economic development websites. You can also contact your elected state officials’ offices for more information on grant funding available. State grants generally have more competition than local grants, so apply early and make sure you meet eligibility requirements. For example, there is:
U.S. Small Business Administration State Trade Expansion Program (STEP): STEP offers financial assistance to small businesses seeking to export products. This grant program distributes federal funds through state agencies. Small businesses that meet the criteria set by each state can use the funds to participate in foreign trade shows, facilitate entry to foreign markets, develop websites, create products, and design international marketing campaigns. Minority Business Development Agency (MBDA) grants: The MBDA is an agency subsidiary of the Department of Commerce and provides grants to promote the growth and competitiveness of minority-owned businesses.
Federal Grants
These grants can be the most competitive to apply for, but are available for a wide variety of recipients. Grants.gov is a great place to start while looking for federal grant programs for your industry or demographic. Federal grant programs include:
Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR): SBIR and STTR are federal grant programs from the SBA that encourage small businesses to engage in research and development with the potential for commercialization and socioeconomic benefit. Boots to Business (B2B): The B2B program provides entrepreneurship training, curriculum updates and program management support services for active military members, veterans, and their spouses.
Private Grants
The government is not the only provider of small business grants. Nonprofit organizations often provide funding for entrepreneurs starting or growing their business ventures. Private organizations, demographic-specific grants, and emergency economic development grants are also options. The type of small business grants available to help entrepreneurs grow their businesses vary greatly and include grants for women-owned businesses, minority-owned businesses, and veteran-owned businesses. Examples include:
Fast Break for Small Business: LegalZoom has partnered with the NBA, WNBA, G League, and Accion Opportunity Fund to help out small business owners by offering $10,000 grants and up to $500 in LegalZoom services for small business owners. Applications are open twice a year. National Association for the Self-Employed (NASE): The NASE offers up to $4,000 for business development through its Growth Grants program. Amber Grants: Grants are awarded monthly in the Amber Grants program to women who want to fulfill their entrepreneurial dreams. Previous grant recipients have ranged from bakers to inventors.
How To Apply for Grants for Your Business
What’s involved in the typical small business grant application process? The process for obtaining a small business grant has three main phases.
The pre-award phase: Grant applicants look for and apply for funding opportunities, then wait as their applications are reviewed.Award phase: Grant organizations make award decisions and notify the recipients.Post-award phase: Grant funds are utilized, any required reporting is submitted, and the grant organization closes the application.
Applying for a small business grant as a sole proprietor can be daunting and varies in time and effort depending on the type of grant and the funding organization’s requirements. However, in general, the following steps are taken:c
Is a Grant Right for You?
With the vast number of options available for this kind of funding, many applicants can find a grant that suits their business needs. However, there are potential downsides to seeking grant funding, including the competition and the time it takes to acquire it. If you own a small business, need funding, meet grant eligibility requirements, and have time to be patient, then grant funding is right for you. For businesses unable to meet eligibility requirements for government or private grants, or who can’t wait for funding, there are better options, such as small business loans or lines of credit, worth looking into for financing.
