The Ultimate Guide to Securing Small Business Grants
For example, when you apply for a loan, you’ll be charged interest. When seeking investors, many will require that you give up a portion of your company ownership.
However, there’s a funding opportunity in which no interest is charged, and you’ll maintain complete business ownership. This source is small business grants. By learning more about this popular financing option, you can determine if it’s right for your business.
What Are Small Business Grants?
Money is available from various organizations, including federal agencies, state and local governments, and private resources. These funds are in the form of loans and grants and provide funding for specific purposes.
With federal grants, the money is given to organizations or individuals that need capital to accomplish specific goals. Unlike a business loan, this type of funding doesn’t have to be paid back.
While the thought of receiving free money appeals to many, it’s quite challenging to obtain these grants. It isn’t money that can be used for whatever purpose the funding recipient wants. Instead, it must satisfy the objectives of the grant providers.
If you find a grant for your small business, you’ll need to explain how you’ll use the money. In addition, you may be required to follow a rigorous reporting schedule.
Before pursuing a grant, you should compare available grant options. The grant organizations will publish their guidelines, which every applicant should read carefully. The application process can be extensive, so you should avoid applying for grant programs that you don’t qualify for.
Federal Small Business Grants
When potential grant recipients explore government grant programs, they often turn to Grants.gov and SBA.gov.
Unfortunately, government grants for small businesses aren’t easy to come by, as there aren’t many available. Plus, there will be significantly more applicants than there are grants available.
While the Small Business Administration (SBA) has a section on its website for obtaining grants, it redirects users to Grants.gov. That is the central information source for current grants available.
Instead, you may have better luck with the Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs. The SBIR is geared towards women and groups deemed to be economically disadvantaged. The STTR is open to most business owners.
For both organizations, the focus is on research and development initiatives between public and private sectors or other research institutions. If your business concept coincides with these organizations’ missions, they may be worth considering.
Many of these grants are for large sums of money. They can start at $150,000 and increase depending on the project and goals of the initiatives.
Small Business Grants at the State and Regional Level
State and regional governments can provide grant money to help spur business development. However, this money can be difficult to obtain. Plus, when funds are available, it requires businesses to meet the objectives or mission of the government initiatives. These initiatives are often for specific tasks that a government agency wishes to achieve.
The SBA provides some grant money, but usually to other funding organizations that are responsible for finding projects to fund. One recent example is when the SBA provided money to the Entrepreneur Fund. This organization is an approved SBA lender but has been tasked with providing capital to disadvantaged entrepreneurs in distressed areas.
The government also has initiatives to help promote exporters, called the State Trade Expansion Program (STEP). It has limited availability and is specific to certain states. However, there’s a division within the program, called the Office of International Trade. This program helps with exporting on a national level.
Small business owners can research programs available at the state level by referencing the United States Economic Development Administration.
Corporate Small Business Grant Options
Many organizations provide funding to small businesses in the form of grants. For example, the National Association for the Self-Employed (NASE) awards one $4,000 grant every month to active members. Only members are eligible to receive these grants based on a needs assessment by the organization.
The credit card company, Visa, also offers grant money for small businesses, called the Visa Everywhere Initiative. The initiative provides funding to small business owners presenting innovative ways to solve payment issues. If you run a technology company that deals with payments, this could be a good funding challenge to explore.
Grants for Business Owners Affected by the COVID-19 Pandemic
Due to the COVID-19 pandemic, many business owners required financial assistance to keep their doors open. Currently, many of these federal government grant programs are no longer accepting applicants. However, some programs may reopen, depending on future conditions.
For example, the Shuttered Venue Operator Grant provided over $16 billion in grant money to shuttered venues. As of August 20th, the SBA is no longer accepting applications.
Small Business Grants for Specific Demographics
Small business grants aren’t readily available to people wishing to start businesses. However, there are demographics that the government may want to promote and offer helpful resources for their businesses. Three of the largest groups are veterans, women, and minorities. Learn more about each of these subsets in the following sections:
Small Business Grants for Veterans
While grant money is available to disabled veterans, there aren’t as many resources offered for all veterans. Funding is available in the form of low-interest business loans. Below are a few common funding programs for veterans:
- Vocational Rehabilitation and Employment (VR&E)
Provided by The United States Department of Veterans Affairs (VA), this program provides funds to disabled veterans. To be eligible, veterans must have experienced a service-connected disability that causes employment barriers. The VA requires applicants to receive a disability rating.
- Vets First Verification Program
The VA also offers this program for existing veteran business owners. It isn’t a grant, but it does provide services to veteran business owners. They receive priority on contracts at the federal and state government levels, access to capital, and tax benefits. The program offers training and other resources to help these business owners learn how to manage their operations.
- The Street Shares Foundation
This foundation offers programs for veterans, including occasional grants. The company suggests veterans sign up to receive updates, or they can view the foundation website for listings. When funding is available, there are three awards given as follows:
- 1st Place – $15,000
- 2nd Place – $6,000
- 3rd Place – $4,000
Check the website for eligibility and availability of these awards.
If you can’t find grants or have been turned down, you can pursue a small business loan. To learn more, check out our educational article on how to apply for a veteran loan.
Small Business Grants for Minorities
Minority business owners have resources available to them from various organizations. For instance, the SBA offers the 8a Business Development Program.
The goal of this program is to help level the playing field for groups considered socially or economically disadvantaged. It helps by giving preference to business owners registered with the 8a program.
The Minority Business Development Agency offers minority business owners expertise on how to run their businesses. This organization can provide tips and resources, including where to find funding sources and possible grant opportunities. The organization can also help connect small business owners for joint venture opportunities.
Other sources for grants for minority business owners are small business grant contests and local chambers of commerce. You can read more about these options from an article we published for minority business owners.
Small Business Grants for Women
Grants for women business owners are more prevalent than ever. They exist at both the government level and the corporate or foundation levels. Usually, the money won’t be granted for the purpose of starting a business, although exceptions exist.
Some popular grant programs for women in business include:
- Amber Grant: The Amber Grant Foundation awards $2000 every month to women-owned businesses.
- Eileen Fisher: This program has a yearly award of $100,000 that’s given to up to ten women business owners.
- SBA programs: Women business owners can also apply for government-based grants. For instance, the SBA has several programs that can provide women with funding for their business initiatives. These may be slightly easier to obtain due to being categorized into the women subset. However, there’s still plenty of competition for these grants.
How to Apply for a Small Business Grant
Applying for a business grant can be daunting, so we suggest following the steps below:
- Research Your Options
Grants.gov has a step-by-step guide on how to find federal grant programs. Even if you decide to use corporate and private grant sources, the procedures are worth researching.
After conducting research, search for grants that may be a match for your small business. This website feature can help you filter the results. In addition, there’s an option to filter for small business grants.
- Identify Opportunities
When you identify grant opportunities, read the grantor’s mission statement to learn more about the funding requirements. This can help you determine if you are eligible for funding. As the process is time-consuming, you’ll want to focus your efforts on grants that give you the highest chance of acceptance.
- Determine If You Qualify
Before you apply, confirm that you meet the grantor’s requirements, so that you don’t waste your time. In addition, ensure that your application is entirely truthful.
Corporate grants tend to be less stringent than government grants, which will attract even more seekers to these funding sources. However, these funders may match your business objectives more closely, which could work in your favor.
Conclusion: Consider Your Grant Options
Getting a grant for your small business may seem like a dream come true, but it still presents some challenges. You may be tempted to apply for as many grants as possible in hopes that you’ll get approved for one. However, the lengthy grant application and interview process should discourage this practice. Instead, focus on the funding initiatives that match your business’s goals.
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Editor’s Note: This post was updated for accuracy and comprehensiveness in October 2021
Editorial Note: Any opinions, analyses, reviews or recommendations expressed in this article are those of the author's alone, and have not been reviewed, approved, or otherwise endorsed by any of these entities.