If you are a small business owner, you may wonder how you can get some extra cash.
Luckily, many types of small business grants are available to help entrepreneurs like you get started.
This article will discuss small business grants, how to apply for them, and the benefits they offer. So what are you waiting for? Read on to learn more!
What is a Small Business Grant?
A small business grant is a sum of money that is given to small business owners in order to help them get started or expand their businesses.
Grants differ from small business loans because the money doesn’t need to be paid back. However, grants are often a one-time thing and yearly renewal is generally needed if you wish to receive the grant again.
There are many different types of grants available, and each one has its own eligibility requirements. There are also grants available on both the state and local levels. Even though the grant is through the state or local government, funding still comes from the federal government.
In addition to grants given from the government, there are also private grants. Private grants are often received by small businesses from larger corporations such as Walmart, FedEx, or the Coca-Cola Foundation.
Grants for small businesses from the government are generally only available if your business furthers the economic plan for either your state or local government.
The most obvious benefit of receiving a grant is that they provide you with free money that you can use to grow your business. This can be used for things like buying inventory, hiring employees, or marketing your business.
Unlike loans, grants don’t need to be paid back. Compared to money from investors, a small business owner doesn’t need to provide equity or ownership in their business to receive a grant.
Another benefit of small business grants is that they can help you get started if you don’t have the capital to do so on your own. This is especially helpful if you have a great business idea but don’t have the money.
How Do Small Business Grants Work?
Before applying for a small business grant, it’s important to understand how they work.
The application process for small business grants can be lengthy and complicated. It is important that you read the guidelines carefully and make sure that you meet all of the eligibility requirements before you apply.
You will also need to provide a detailed business plan and financial information. The government will use this information to determine whether or not your business is a good investment.
If your application is approved, you will receive the grant money. You will then be required to provide progress reports in order to show how you are using the money to grow your business.
What Are the Types of Small Business Grants?
There are many different types of small business grants available. Grants can also come from a number of sources.
A very common source for grants is the government. These grants are given out by either the state or local government. Government grants are often given to small businesses that help promote specific economic or social initiatives the government has.
Another common source for grants is the private sector. These grants are given out by large corporations to small businesses that further their economic goals.
Some of the most common types of small business grants include:
- Minority business grants: These are given to businesses that are owned by minorities, such as women, African Americans, Hispanics, and Asians.
- Green business grants: These are given to businesses that help the environment in some way, such as by using renewable energy or recycling materials.
- Rural business grants: These are given to businesses that are located in rural areas.
- Technology business grants: These are given to businesses that use technology in some way, such as by developing new software or applications.
Even if your business doesn’t qualify for one of the previous grant types, there are countless others you may be eligible to receive. Reach out to your local and state government, private companies, larger non-profits, and other resources to see which grants they may offer small businesses.
Other popular types of small business grants include:
- Federal Small Business Grants
- State Small Business Grants
- Local Small Business Grants
- Private Small Business Grants
- Fellowship Grants
- Disaster Relief Grants
- Technical Assistance and Training Grants
- Social Innovation Research Grants
- Veteran-Owned Small Business Grants
Regardless of your business type or location, there is most likely a grant available for you. It’s just a matter of finding one that you’re both qualified for and can benefit from.
How Do You Apply for a Small Business Grant?
The process of applying for a small business grant can vary depending on the type of grant you are applying for. However, there are some general steps that you will need to follow in order to apply for any type of grant.
The general steps to follow are:
- Get a business plan
- Find the right grant
- Write the grant
- Get the money
Get a Business Plan
The first step in applying for a small business grant is to have a business plan.
Your business plan should include information about what your business does, what your goals are, and how you plan on using the grant money. It is important that your business plan is clear and concise.
Questions to answer in your business plan include:
- What are you selling? Whether it’s a product or a service, it’s important to fully understand what you’re offering your customers.
- Who is your target market? Know exactly who you’re selling to. And no, it can’t be everyone.
- Who is your competition? By knowing who you’re competing against, you can develop a plan to succeed against them.
- How are you different? Understand how you stand out from the competition.
You should also use resources like consumeropinion.org, to find out what customers are saying about you, and your competition. This can help you figure out how you’re different, or how you stack up against your competition when developing your business plan.
If you need help writing a business plan, there are many resources available online or you can hire a professional to help you.
Find the Right Grant
There are many different types of small business grants available. You will need to research the various grants in order to find the grant that best suits your needs.
When you are researching grants, be sure to pay attention to the eligibility requirements and deadlines. You will also want to make sure that you can meet the requirements for the grant.
A few examples of grant requirements include:
- Minority ownership
- Woman ownership
- Geographical location
- Non-Proft organization
Once you have found a grant that you are eligible for, it is time to start writing the grant.
Write the Grant
The next step in applying for a small business grant is to write the grant.
This is one of the most important steps in the process because it will be what determines whether or not you get the money.
It is important to follow the guidelines carefully and to answer all of the questions thoroughly. You will also want to make sure that your proposal is clear and concise.
Some tips to help you craft the perfect grant proposal are:
- Follow directions: Read the directions carefully and make sure you understand what is required of you.
- Be clear and concise: Get to the point and don’t use flowery language.
- Sell yourself: The grant committee wants to know why you deserve the grant money. Remember, not only are you selling yourself, you’re also selling your business.
- Proofread: Make sure to proofread your grant for any errors or typos.
- Include all necessary papers: These may include, tax returns, financial plans, business plans, etc.
If you need help writing a grant, there are many resources available online or you can hire a professional to help you.
Get the Money
The final step in applying for a small business grant is to get the money.
Once you have submitted your grant, you will be notified if you have been approved or not. If you have been approved, the money will be deposited into your account and you can start using it to grow your business.
Sometimes, grant money is stipulated for a specific use. Be sure to understand the specifics before applying for and receiving your grant.
Grant money is often used to invest in your business. This can be through investing in employees, facilities, equipment, or even inventory, just to name a few.
Some grants may require that you provide progress reports in order to show how you are using the money to grow your business.
Have You Applied Yet?
Applying for a small business grant can seem like a daunting task, but it doesn’t have to be.
Remember, grants are sometimes necessary to help grow the business you’ve put all of your hard work into. They don’t need to seem scary, but rather something that can benefit your business and your community.
By following these steps, you can increase your chances of getting the money you need for your business to take that much-anticipated next step. Don’t wait any longer, get started on your grant today!
Small Business Grants FAQ
What are the 4 types of grants?
The four main types of grants are Federal, State, Local, and Private.
What is a business grant definition?
A small business grant is a sum of money that is given to small business owners in order to help them get started or expand their businesses.
What are the advantages and disadvantages of grants?
The advantages of grants are:
1. Don’t have to be repaid
2. Can help with business start-up costs
3. Can help develop different areas of your business
4. Gain credibility for other grants
The Disadvantages of grants are:
1. Time-consuming
2. Difficult to receive
3. Stipulations attached to grant
4. Uncertainty about grant renewal
Do grants have to be paid back?
No, grants have no requirement to be paid back. They’re not a loan, but rather an investment in your business by the government. However, there are sometimes stipulations involved in receiving grant money. Business owners also don’t have to sacrifice equity in their business to receive the grant.
What makes you qualified for a grant?
The specific criteria of whether you are qualified for a grant or not depends on the grant. However, the most common items that factor into grant qualification are:
1. Location
2. Business Size
3. Business Type
4. Military Status
In addition, businesses that are green, minority-owned, women-owned, or small non-profits may find grants they are qualified for as well.
How can I spend my grant money?
Each grant type may be different, but the most common ways to spend grant money include:
1. Hiring new employees
2. Covering day-to-day costs
3. Upgrading business facilities or equipment
4. Buying new equipment
5. Expanding retail partnerships
6. Investing in marketing