What are small business grants?

A small business grant is funding given by government organizations or other entities, including private companies. It’s essentially money that you don’t have to repay and won’t incur interest or high fees. Some rules dictate how the money can be used, but if you stick to the guidelines, noncompliance issues are limited.

As a business owner who chooses to follow this path, it’s important to understand a few things:

• While you can receive generous amounts of free money, the process is time-consuming. Not only do businesses need to do a lot of research on the granting agency before writing the proposal, but they also need someone with ample grant-writing experience. Grant writing is a specific discipline that requires knowledge of your organization and the application process.
• Close to 3,000 grant proposals are submitted daily, and fewer than 200 receive funding.
• Once you receive one grant, it puts you in good standing to receive others, which can only help your business be more visible and perceived as credible. This is important because once the grant runs out, the process starts all over again.

Who is eligible and where to find grants?

Eligibility for small business grants varies and depends on the requirements of the funding organization. There are five main small business grant types:

1. Nonprofit grants are abundant as these organizations don’t have other profit sources. One of the best ways to find grants that match specific nonprofit objectives is through GrantWatch.com.
2. Government grants are available at the federal, state and local levels and often have clear, specific requirements for qualification. While state and local governments have smaller grants, these are less competitive than those at the federal level.
3. Grants for immigrants and minorities are few, but they help minorities and refugees, in particular, get the necessary assistance for their businesses.
4. Grants for veterans are mostly government-funded and tend to be tougher to access because they’re very time-sensitive. However, there is help available for veterans who are building a startup or small business.
5. Grants for women help some of the 42% of businesses owned by women in the United States. Women are starting businesses at record rates, and with limited access to venture funding, these grants are handy.

Grants are often scattered across several different websites, so they can be hard to find unless you know where to look.Business owners can start with a selection of resources below:

• The Small Business Association provides grants to nonprofits, educational organizations and partners who support entrepreneurship. They don’t offer startup business grants or grants for business expansion.
• Minority Business Development Agency (MBDA) is a grant competition that provides small business assistance for companies that fulfill a specific need or show innovation.
• FedEx Small Business Grant Contest gives away 12 grants of up to $50,000 to small business owners who submit an essay and show that their brand aligns with the FedEx brand.
• National Association for the Self-Employed (NASE) provides members with up to $4,000 to develop their small businesses. The Growth Grant can be used for several purposes, including facility expansion, hiring and advertising.
• USDA Rural Business Development Grants provide project planning, land acquisition and all sorts of assistance and training to small rural businesses with less than $1 million gross revenue and fewer than 50 employees.
• Asian Women Giving Circle (AWGC) is a female-led volunteer organization in New York that supports Asian American female artists and community groups.
• Small Business Innovation Research (SBIR) is one of the options for startups and small businesses that are focused on turning high-tech research and development into commercial ventures.

These grants are available for different criteria at the federal, state, local and private levels, but small businesses have to do their own research to find what works besst for them.

Timeline for federal small business grants

Small businesses that decide to pursue federal grants via Grants.gov need to be aware of the three phases:

1. Pre-Award: During this phase, applicants who have identified an opportunity for their business need to complete the grant application. This process takes weeks. Not only could the award require putting together financial information, but there’s an auditing phase that involves the Inspector General and other departments. At the end of this phase, the business submits its application.
2. Award Phase: This includes deliberation before the final Notice of Award is issued. This means the small business that gets the grant is legally obligated to fulfill the award’s terms and conditions.
3. Post-Award: This is where small businesses need to be most diligent. The government requires regular reports of progress and compliance. The parameters include site visits and audits from several government agencies. Once they’ve submitted their final report, the grant is over, but businesses are required to keep their records for three years from the date of the final report.

Federal funding is more abundant, but there are far more requirements at all stages of the grant process that you have to be prepared for going in.

Howto get a small business grant

Getting a small business grant is an achievement that may take a few tries. Consider the following tips to learn how to improve:

• Bring in some expert help: While you can get assistance from qualified grant writers, consider enlisting the help of a good accountant. This shows the grantors that you’re serious about the process and your business’s success.
• Clearly demonstrate how the grant helps: Grantors don’t want to guess or wade through a lot of extraneous information to find out why you need the grant. Make sure your reason for the request is detailed.
• Ensure your application is complete and accurate: Treat this like you did a final exam when you were in school. Make sure your grammar is excellent and your calculations and logic are solid. Anything less than that may delay, or deny, the review process.

Get to know your grant officer: Building a relationship with the grant officer means understanding their time and other constraints. Also, if you have questions or concerns, having a professional, respectful relationship helps. If your application is denied, building that bridge means you have a conduit for valuable feedback.