When it comes to starting or expanding a small business, one of the essential elements is capital. Financial assistance is necessary for the growth and success of a business, and one way to acquire this assistance is by applying for grants.
The landscape for grant opportunities is diverse, providing a multitude of options for entrepreneurs and small business owners. This variety ensures that there is likely a grant perfectly suited to your business needs.
How Can You Get Free Money From the Government?
A vast number of government agencies offer grants, thereby making them one of the most substantial and preferred sources of such financial backing.
Among these, business owners can apply for three types of grants based on their specific needs and circumstances: state, local, and federal grants.
Federal grants are notorious for offering the largest sums of money. This generous funding makes federal grants a highly attractive option for many businesses.
However, their high value also means they’re the most competitive, making it challenging for some businesses to secure this type of funding.
State grants, while offering less money than federal grants, present a less competitive landscape. While the funding might not be as substantial, the increased likelihood of securing a state grant can make it a more attractive option for some small businesses.
At the local level, grants are often easier to secure. Though they typically offer the smallest sums of money, local grants are a viable option for many businesses.
This is particularly true for small businesses just starting and needing a financial boost without facing stiff competition.
One of the key benefits of grants, compared to loans, is that they do not require repayment. This feature can significantly reduce the financial burden on a small business.
Moreover, obtaining a grant does not require the business owner to give up any equity in their business, allowing them to retain full control while receiving financial support.
What Is a Good Reason to Get Government Grants?
The world of grants is varied, with many types available for different business needs. However, state and local government grants hold particular appeal for many small business owners.
Securing a government grant doesn’t only provide a much-needed financial boost, but it also adds to the credibility of a business.
This improved reputation and validation from a governmental body can pave the way for further funding opportunities in the future, bolstering the overall financial health and growth prospects of the business.
What Is a Small Business Grant?
A grant is a form of financial aid provided to a variety of entities, including individuals, businesses, corporations, and nonprofit organizations.
These grants are often issued by a range of providers such as corporations, governments, and foundations.
What Are the Types of Small Business Grant Programs?
The landscape of small business grant programs is wide and varied, containing five primary categories. Each of these categories has its own distinct advantages and disadvantages.
- Federal small business grants: For businesses looking for a lot of capital, federal grants are the best option. These federal grants tend to be tied to government agencies that have clear requirements when it comes to qualifying for the capital.
- State and regional small business grants: State grants hand out less money than federal ones, and it’s comparatively easier to qualify. For these local grants, it’s important to have a strong network to connect with the right people working at the state agencies.
- Corporate small business grants: A number of large companies and corporations have philanthropic initiatives that include grants.
- Startup business grants: Designed for entrepreneurs starting their business and looking to fund projects, these grants are issued by both government agencies and private companies.
- Specialty business grants: Another option is to explore specialty grants targeting minorities. Some of these include business grants for women, women of color, and military veterans.
Federal Government Agency Grants for Small Businesses
Let’s look at some of the more popular federal small business grants.
Small Business Innovation Research and Small Business Technology Transfer Programs
The SBIR and STTR grants focus on supporting small businesses that are deeply engaged in groundbreaking research and development within the realm of scientific technology.
By establishing connections between small businesses and 11 government agencies, these programs foster innovation and facilitate growth within the small business sector. To qualify for these grants, small businesses must meet specific criteria, including employing no more than 500 individuals.
USDA Rural Business Development Grants
Sponsored by the Department of Agriculture, these grants are intended to stimulate job creation and economic development in rural areas by offering financial assistance to local businesses.
Eligibility criteria for these grants include having fewer than 50 employees and less than $1 million in gross annual revenue, as well as being located in a rural area.
National Institute of Food and Agriculture (NIFA) Grants
Aimed at bolstering small businesses in the agriculture and food industry, the NIFA grants offer financial support throughout the year.
Eligibility for these grants requires businesses to have a maximum of 500 employees.
Program for Investors in Microentrepreneurs (PRIME)
The PRIME program serves to provide financial aid to organizations dedicated to the development of microenterprises. These organizations, in turn, provide support to disadvantaged microentrepreneurs, helping to foster entrepreneurship at the grassroots level.
Eligible organizations for this program include both private nonprofit and state-run enterprises.
Here’s a handy summary of this info:
|Small Business Innovation Research and Small Business Technology Transfer Programs||Supports small businesses engaged in groundbreaking R&D in scientific technology.||Small businesses with no more than 500 employees.|
|USDA Rural Business Development Grants||Stimulates job creation and economic development in rural areas.||Businesses with fewer than 50 employees, less than $1 million in gross annual revenue, and located in a rural area.|
|National Institute of Food and Agriculture (NIFA) Grants||Bolsters small businesses in the agriculture and food industry.||Businesses with a maximum of 500 employees.|
|Program for Investors in Microentrepreneurs (PRIME)||Provides financial aid to organizations supporting the development of microenterprises.||Private nonprofit and state-run organizations.|
State and Regional Grant Programs for Business
Considering the rigorous nature and complexity of qualifying for federal grants, many businesses gravitate towards state and regional programs. These programs are generally easier to obtain and offer distinct benefits of their own.
State Trade Expansion Program (STEP)
The STEP program targets small businesses with aspirations to break into or expand their presence in foreign markets.
It offers funding that can be utilized for various activities, including participation in international market trade shows and other international expansion opportunities.
Small Business Development Centers
Small Business Development Centers (SBDCs), often affiliated with a state’s economic development agency or local universities, provide comprehensive support for startups and small businesses.
They function as a bridge connecting local businesses with grants, local resources, and other financing opportunities.
Economic Development Administration
As an integral part of the Department of Commerce, the Economic Development Administration serves as a robust resource and database for small businesses seeking funding opportunities.
By collaborating closely with local and state communities, the EDA manages funds and promotes regional economic growth and grant opportunities.
Minority Business Development Agency Centers
The MBDA plays a crucial role in supporting minority-owned businesses. They simplify the process of raising capital, securing contracts, and competing in various markets for these businesses.
Corporate Small Business Grants
Securing financial support for business growth and expansion is often a priority for entrepreneurs.
While government agencies provide an array of grants, an increasing number of private corporations and large businesses have begun to offer small business grants as part of their community giving efforts.
These corporate small business grants present a popular alternative for businesses keen to secure funding without navigating the often lengthy wait times associated with government grants. Here are some of the prominent corporate small business grants available today.
FedEx Small Business Grant Contest
FedEx has demonstrated its commitment to nourishing the growth of small businesses through its annual FedEx Small Business Grant Contest. Each year, FedEx generously awards $250,000 across ten deserving small businesses, actively encouraging entrepreneurship and innovation.
The top three winners receive not only a substantial grant of $50,000 but also $4,000 in FedEx print and business services. To qualify for this life-changing opportunity, a small business must be based in the U.S., operational for at least six months, and employ less than 99 individuals.
Walmart Foundation Grants
Walmart, the multinational retail corporation, is not just about selling goods; it’s also about giving back to the community. Through its Walmart Foundation Grants, the corporation aims to uplift nonprofit organizations.
They have set up two distinct categories: The Community Grant Program and the National Giving Program, which are designed for local and national nonprofits, respectively.
Idea Cafe’s Small Business Grants
Distinct from many grants that require an established business to qualify, Idea Cafe’s Small Business Grants extends support even to those who are just starting their journey.
The company dispenses $1,000 grants to winners selected through community votes, thus encouraging local involvement and fostering entrepreneurial spirit.
Visa Everywhere Initiative
Visa, the world-renowned financial services corporation, has set its sights on fostering tech startups globally through its Visa Everywhere Initiative.
The winning startup, which needs to demonstrate how Visa products have been incorporated into its solutions, receives a whopping $100,000 at a global event.
Fast Break for Small Business
In a unique collaboration, the NBA, LegalZoom, WNBA, NBA G League, and Accion Opportunity Fund have created the Fast Break for Small Business initiative. It provides a significant grant of $10,000 and up to $500 in LegalZoom services to support the dreams of small business owners.
Grant Programs for Startups
Starting a new business can be a daunting task, especially when it comes to securing funding. While existing businesses have numerous avenues to access funds, startups often face more hurdles.
However, there are grant programs specifically designed to help startups overcome these financial challenges and launch their businesses successfully. Here are a few worth considering.
U.S. Chamber of Commerce Dream Big Awards
The U.S. Chamber of Commerce, recognizing the significant economic impact of small businesses, has established the Dream Big Awards. These awards offer a $25,000 grant to small businesses for their valuable contribution to the economy.
The awards are available in various categories, such as emerging business and green business, acknowledging diverse fields of entrepreneurship.
Comcast RISE is an initiative that provides free marketing services and technical support to small businesses. These awards, given quarterly, are meant for businesses that have been operational for at least a year.
To be eligible, your business must be a legally registered entity within the Comcast or Effectv service area. This program offers businesses an opportunity to leverage resources and gain an edge in a competitive market.
Caleb Brown Urban Entrepreneur’s Community Grant
The Caleb Brown Venture Capital and Consulting Project offers the Urban Entrepreneur’s Community Grant, a $1,000 grant aimed at promoting entrepreneurship among urban youth.
This grant, which runs a contest every month, is open to startups, providing them a financial leg-up in the early stages of their business venture.
Halstead Jewelry Grant Award
The Halstead Jewelry Grant Award specifically targets jewelry startups, offering them a specialized platform to kickstart their venture.
The award comprises a grant of $7,500. In addition to the financial assistance, Halstead provides startups with mentorship and guidance to help them structure their business and achieve their financial objectives.
This level of support is invaluable for startups navigating the often complex landscape of the jewelry industry.
Specialty Small Business Grants
The business world is as diverse as it is vast. Keeping this in mind, several grants cater specifically to niche sectors and demographics, helping businesses across different backgrounds and industries achieve success. Let’s explore some specialized grant options.
Small Business Grant for Women (Amber Grant)
The Amber Grant Foundation plays a significant role in the entrepreneurial journeys of countless women-owned businesses. Every month, it awards $10,000 to a deserving business, creating a total of 12 winners over a year.
But the financial windfall doesn’t stop there. At the year’s end, one of the monthly winners gets an opportunity to add a substantial $25,000 to their grant winnings.
To further uplift women entrepreneurs, the foundation provides several other grants at various points throughout the year.
What makes these grants particularly appealing is the simplicity of the application process. Applicants need to clearly explain their business concept, outline their business plan, and pay a nominal $15 application fee.
Small Business Grant for Black Women (Black Girl Ventures)
Black Girl Ventures is a unique platform dedicated to empowering black women entrepreneurs. It provides them with coaching, resources, and funding opportunities to help them scale their business.
One of their key offerings is a crowdfunded pitch competition program. Here, applicants are given a platform to pitch their business idea to an audience and engage in an interactive Q&A session with a panel of industry experts and potential investors.
The innovative part? The audience “votes” with their dollars, directly funding the businesses they believe in.
Small Business Grant for Veteran-Owned Businesses (Warrior Rising)
Founded by individuals who have served their country on the battlefield, Warrior Rising is a nonprofit organization that provides assistance to veteran-owned businesses.
It offers financial support in the form of grants, provides valuable coaching from industry veterans, and makes available a variety of resources to aid business growth.
More than that, it creates a closely-knit community of veteran entrepreneurs who can support each other through their entrepreneurial journey.
Where Can You Find Small Business Grants?
While searching for small business grants, one can look at a variety of sources. These grants can be found in abundance at government agencies, state-run organizations, and even private companies.
With a little bit of research and a lot of determination, finding the right grant can become a straightforward task.
How Do I Choose a Grant?
The process of choosing a grant goes beyond the financial aspect. While the funds are obviously an important factor, the decision must also take into account other benefits that come along with the grant.
Many grants provide additional benefits such as coaching from industry leaders, access to an expansive network of businesses, and much more. These perks can prove to be just as valuable in propelling your business forward as the grant funds.
How Do I Get an SBA Grant Approved?
While it is a common misconception that the Small Business Administration (SBA) offers grants to start or expand businesses, this is not the case.
The SBA instead provides grants to organizations such as nonprofits and educational institutions, as well as resource partners that support the cause of entrepreneurship. This nuanced distinction is crucial to remember when seeking out SBA grant opportunities.
Understand How to Qualify for a Small Business Grant
Qualifying for a small business grant involves understanding and fulfilling the awarding organization’s criteria. Often, businesses situated in low-income areas or those helmed by minority owners are given priority in the grant awarding process.