Small business grants aren't sitting around waiting to be claimed by business owners in need, Yet they do exist. However, they usually come with some strings attached and eligibility requirements to apply. Here's what you need to know about small business grants:
Grants are hard to find
If you are a current small business owner or desire to be, you have probably heard of the United States Small Business Administration or SBA. The SBA is a government agency in charge of helping entrepreneurs find success as a small business owner. However, according to the SBA; it “does not provide grants for starting and expanding a business.”
The federal government has grant programs along with some state and private organizations but most fund only non-profit businesses.
Grants are specific
If you are looking to find something related to a loan that you do not need to pay back, this is not how grants work. Grants are often created to nurture business growth or serve the public. If an organization funds a business for research that may one day cure a disease or help to clean up the environment, that’s money well spent for the grantor. There's a lot of good in giving small businesses grant money for overall growth.
Strict reporting requirements
If your business is awarded a grant, expect very specific rules on how the money can be spent. And expect a lengthy amount of time to complete the paperwork. Grantors never forget the business they give money to. Granters have a fiscal responsibility to their donors, more funding requires convincing donors that the money isn't wasted.
All grants may not be free
Before you apply for a small business grant, you may want to have some money saved of your own. Grants are often awarded based on matching funds. For every dollar you are awarded, you have to raise the same amount either through cash or financing. They want you to share the risk” as well.
Grant writing is an art
Writing a grant can be hard. It takes time and there’s an art to completing the request. Most people applying for grants hire a grant writer. If you’re not comfortable writing and/or have no experience writing grants, get help—at least for the first couple of times.
There’s a lot of competition
People in the grant business know how to find offers that relate to them. Due to the large volume of competitive applicants, you may be right for the grant but so are many others. Don’t make a business plan based on receiving a grant.
How to find grants
You can find a list of small business grants with the SBA’s Loans and Grants Search Tool. Here you can research a variety of funding options that may apply to you. You can also try here; https://www.grants.gov/ for a list of government-funded grants.
For other opportunities, visit the website or call groups and organizations related to your industry. If you’re a woman, for example, you could call your state branch of the Women’s business center and research here; https://ambergrantsforwomen.com/get-an-amber-grant/ to get started.
Sometimes the biggest stumbling block in locating funding is finding the grants that apply to you. This is where networking can help,
The Bottom Line
The idea of free grant money is certainly appealing to small business owners who are just starting out or struggling to grow. The unfortunate truth is you are not likely to find funding unless you are a non-profit business, an educational institution, or your business contributes to something that solves a problem on a large-scale. However, if you are in one of these categories that the government and private foundations and organizations want to see grow, there may be a lot of opportunities out there for you. but be prepared for the mountain of paperwork and compliance that comes with the grant.
