The Complete Guide to Small Business Grants

Did someone say, “free money?” That’s essentially what small business grants are – funds (that don’t need to be repaid) given to a business by an organization for a specific purpose.

Any small business in need of funding should eventually consider the idea of applying for a grant before a traditional loan. Why not, right? Grants are windfalls — they provide you with money to improve your business, and you don’t have to pay for them.

Does it sound too good to be true? Well, grants for small business owners are real, but succeeding at the application process can be extremely time-consuming and competitive. You can’t just order up some free funding — grants are a bit more complicated than that. These resources are scarce and difficult to get your hands on, but if you’re up trying to get one, learn the lay of the land first. Keep reading for everything you need to know about small business grants.

This guide serves as a resource to help you learn what business grant issuers are looking for, where to search for grant opportunities, as well as tips for success when applying for grants for your small business.

What is a small business grant?

Although the most common source of funding a business is financing with a loan or line of credit, a small subset of businesses can secure grant funding. To understand what makes one highly sought after and difficult to get, think of a grant as a gift.

Most business grants are designed for specific types of companies or for those that meet certain requirements. For example, grants sometimes go to companies that conduct certain types of medical research, work to advance a particular innovation or support underserved groups.

Grants for small businesses — both private and public — are available from a variety of sources. Various companies and financial institutions — as well as foundations and federal and state government agencies — sponsor grant programs for businesses.

If grants provide “free money” for businesses, why doesn’t every business prioritize this type of funding?

Can I get a small business grant?

Many businesses are disqualified based on specific eligibility requirements. For those that do qualify, it’s an intense process to track grant options and deadlines, fill out the application paperwork and wait for a response. Considering that most grants are extremely competitive  — meaning the majority of applicants will be refused — the time and energy it takes to track and apply for them might be wasted.

Businesses that obtain grants might find they face restrictions on how they can use the money and requirements regarding strict and possibly extensive reporting. Grant programs from the federal and state governments are usually very specific and meant to advance certain priorities or stimulate the economy is particular ways. Grants from private foundations and companies might be more straightforward, but are also likely to have a particular focus, such as supporting a certain type of company or endeavor.

Some grants are open only to specific targeted populations, such as women, minority business owners or military veterans. Check eligibility requirements carefully before investing time and energy to apply for any grant.

Where to find small business grants

The first step in the small business grant application process is to find one to apply for. This can be done quite simply using the Internet. There are many resources online that can point you to organizations offering grants for small business owners. However, many have stringent and very specific requirements, so be sure to thoroughly read through these before investing any time in an application.

Requirements can surround the type of business, the location of the business, the personal qualities of the owner, and the intended use of the funds. For example, a certain grant might target minority-owned businesses with less than 50 employees that are revitalizing a business district in Pottawattamie County, Iowa.

 

How to apply for small business grants

Once you’ve found a relevant small business grant, it’s time to start the application process. This is not something to rush through. Give yourself enough time to complete each step thoroughly or your work will be for naught.

First, you’ll need to complete any required registrations. This piece alone can take up to two months. Certain organizations require different registrations, which can include obtaining an Employer Identification Number or a DUNS number, registering on certain online platforms such as Grants.gov or the U.S. Government System for Awards Management, and obtaining accreditations like becoming a certified small business or certified woman-owned business through the SBA.

Next, it’s time to start writing your small business grant application. While there will be some simple form-type questions, the majority of the applications for small business grants involves essay-style writing. Outline what you plan to write, making sure it maps to the points the application requests that you address. Consider your audience and write with them in mind. This might require providing in-depth summaries of your local area or market situation. Also, focus specifically on how the money awarded will be applied to better your business and your community as a whole.

Once your grant proposal is submitted, you’ll need to wait to learn if you’ve been awarded the funds. It does not hurt to follow up with grant officers in the meantime to ensure all of their questions are answered and they know everything they need to know about your company.

What types of applicants are organizations looking for?

While criteria for determining small business grant winners can vary widely by the organization issuing the grant, below you will find three crucial points that many organizations look for when considering applicants.

Grant winners commonly have:

1

A Business Plan

Probably the most important piece of your small business grant application is your business plan. If it is not directly requested as part of the process, you should include it as supporting material. Grant reviewers want to ensure that your business has a clear mission and purpose that you can articulate in your business plan and in the grant application. Outline the specific actions you will take to make your goals a reality. Spend time bringing any vague elements of your plan into focus now before you begin the grant process so you’ll be prepared when the right opportunity presents itself.

2

A Clear Vision

The organizations that are awarded small business grants usually have a clear and specific vision – whether it’s to encourage entrepreneurship in underrepresented demographics or to spur business district revitalization in a changing community. The individuals reviewing your application will want to be sure that your proposal aligns with the grant’s specific purpose. Leave no stone unturned in your explanation of how your company will use funds from the grant to help the organization achieve its objectives.

3

Credibility

Finally, grant reviewers are looking for credibility. They want to see an application that’s written and presented in a professional manner. They want all facts backed up with data and documentation. It can help your case to contact and quote local political figures, accountants, or other relevant experts to endorse your ideas and your company. Help the organization feel confident that yours is the type of company that will responsibly use its grant funds and represent its mission.

Tips for tackling the grant application

The application process for small business grants can be lengthy and intensive. Many small businesses choose to hire a grant writer to take on the process for them. In some cases, it can be worth the expense to have a professional working on your side to help navigate this challenging process. Applying for small business grants can become a full-time job, one that most small business owners don’t have adequate time to devote towards. If you really want to do it right, consider hiring someone who knows the small business grants landscape. At least that person can help guide you through the process the first time around. You can learn from their expertise and take on writing your own small business grants in the future if you so choose.

If you simply don’t have the budget to hire a grant writer, here are some pro tips:

  • Be thorough. Provide all the information requested, but respect length guidelines. If necessary, include supplemental documents.
  • Use citations and include supporting documentation. Back up every claim with facts and data.
  • Ask questions if you are unclear about anything. Don’t make assumptions.
  • Don’t simply copy and paste from existing documents or previous grant proposals. Make sure that everything you submit is custom tailored for each grant opportunity.
  • Follow the specifications listed to a T. This includes things that might seem trivial but can get all of your hard work disqualified, including font size, margin allotment, page limits, binder specifications, deadlines, and preferred formatting.
  • Be realistic with budgeting. Talk with similar businesses and thoroughly research costs.
  • Try not to submit your proposal at the very last minute. Reviewers might get the impression that your company is disorganized and fails to plan ahead.
  • Check the organization’s website to find archives of previous grant winners. These will give you a good sense of what the organization is looking for and the types of proposals that are successful.
  • Don’t be afraid to admit what you don’t know. If you can’t afford a grant writer, check out a book on grant writing from the library or invest in an online course that can teach you the basics.

Ultimate list of small business grants

Despite what you might have heard about the availability of funding for businesses from the federal government, small businesses are rarely eligible for federal grant funding. The limited funding that is available is severely restricted and difficult to get. Certain businesses, especially those in high-tech fields and research and development, might be able to find federal government small business grants easily.

Head over to Grants.gov to find the searchable database of grants currently available from various agencies. The search functionality lets you search specifically for “small business” to find grants that are open to small businesses. The Grants Learning Center includes a Grants 101 page and a listing of all the grant-making agencies.

In addition to federal grants, federal agencies and other organizations host a variety of contests — called challenges — that offer prize money for innovative solutions and ideas. You can search for these at Challenge.gov.

America’s Seed Fund. The SBA administers two grant funding programs for high-tech innovation: the Small Business Innovation Research Program and the Small Business Technology Transfer Program. These programs provide seed grants to small business engaged in scientific research and development. To apply for the STTR Program, recipients must be collaborating with a research institution.

Program for Investment in Microentrepreneurs (PRIME). This SBA program offers loans and grants to low-income entrepreneurs who struggle to gain access to capital due to lack of training and education. There are grants available for technical assistance and capacity building ($50,000 minimum), research and development (no minimum) and discretionary purposes. Recipients might be awarded a maximum of $250,000 in a given fiscal year.

InnovateHer: Innovating for Women Business Challenge. The SBA’s Office of Women’s Business Ownership runs this business competition focused on innovative products and services that improve women’s lives, disbursing $70,000 total for the top three prizewinners.

State-level grants for small business are often designed to address particular social and economic concerns for that state. They are easier to get than federal grants, partly due to the fact that some of the federal funding is funneled to recipients through state agencies. Some might offer “matching grants,” which means applicants must match the funding level to receive the grant.

To find available business grants in each state, visit the state business resources database at USA.gov and choose your state from the drop-down menu. Each state page has an “access financing” section, where any government-sponsored grants are listed. These links will lead you to each state’s official websites aimed at local businesses, where you can find more information about state resources.

Cities, towns and local nonprofits might have grant funding available for small businesses, especially those that assist the community or improve local quality of life and livelihoods. The only way to track down these opportunities is to do your own research in your local area, both online and in person. Visit your municipal website and talk to local officials who might know where to find grant opportunities.

Check out these private business grants and determine if you are a good candidate for any:

  • A Grant for Greatness. Applicants submit a two-minute video to enter this contest hosted by AT&T experts, which gives small grants to those with a unique business idea and particular business need. The grant amount is $1,000.
  • ActivityHero Business Grant. This grant program is for businesses that provide children’s camps and classes, Winners are chosen based on how many votes and reviews each receives in the grant window. The grant amounts are $10,000 (one grant), $3,000 (one grant) and $500 in services (seven grants).
  • Amber Foundation Grants. These monthly micro-grants for women help female entrepreneurs start or grow a business in any field. The grant amounts are $1,000 and $10,000.
  • Cartier Women’s Initiative Awards. This international competition recognizes projects led by women entrepreneurs. The grant amounts are $100,000 (first prize) and $30,000 (second prize).
  • Fast Pitch Awards. These high-profile awards are restricted to women founders/CEOs and businesses that are majority-owned by women. The grant amounts are $45,000 in cash awards and more than $200,000 in professional services.
  • FedEx Small Business Grant Contest. Each year, FedEx awards grants to 10 small businesses that impress the company with their elevator pitches, the way they operate their businesses and their plans for the funding. The grant amounts are $25,000 (one winner), $15,000 (one winner) and $7,500 (eight winners).
  • Girlboss Foundation Grant. These grants support women business owners working in design, fashion, music and the arts. The grant amount is $15,00.
  • Halstead Grant. U.S. jewelry makers who make their livings from the craft and started their j businesses within the last three years can compete to win a cash grant and a trip to Arizona. The grant amount is $7,500 in cash plus a $1,000 gift certificate to Halstead.
  • Idea Café Small Business Grant. These small grants with low-barrier application processes are for businesses with forward-thinking ideas. The grant amount is $1,000.
  • Marriott International’s Canvas. This “food and drink concept lab”  — run by Marriott international hotel chain — awards restaurateurs in the concept stage with a large investment and valuable advice. The grant amount is up a $50,000 investment in a restaurant space.
  • National Association Self-Employed Growth Grant. This grant is available to members of NASE who can demonstrate their businesses will be able to grow by using the funds, and who have a strong plan of action for the funds. The grant amount is $4,000.
  • StreetShares Veterans Small Business Award. These awards are open only to businesses that are more than 50 percent owned by military veterans and that are working to have a social impact on their community. The grant amounts are $15,000, $6,000, and $4,000.
  • Tory Burch Foundation Fellows Program. Winning women entrepreneurs receive a one-year fellowship, grant funding and the chance to pitch their concept to industry leaders for greater funding. The grant amount is $10,000.
  • Visa Everywhere Initiative. This is a contest in which startups must innovate to solve payment and commerce challenges. It awards three large grants to three winners, who will receive extensive exposure and access to a large network of entrepreneurs. The grant amount is $50,000 per winner.

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