Grants for starting a small business are available for many types of business start-ups. Grants are viable options when looking for small business funding. Finding procurable grants, applying for them properly, and smart money management are keys for finding the financial backing you need and laying a solid business foundation.
A grant is an endowment or monetary gift awarded to businesses to start up or expand. Grants differ from loans in that they do not have to be repaid. Grants are not as readily available as loans and grant applicants must meet strict requirements. Grants do not have to be paid back, but matching funds are often required. Most grants are designed for a specific business type or to assist a specified category of business owners.
Finding Grants For Starting A Small Business
Contrary to popular belief, the federal government does not offer grants for starting or expanding your small business. The only entities eligible for federal grants are non-profit and educational organizations. These include grants for cancer research, the humanities, scientific research, and law enforcement. Federal grants are sometimes available to state and local governments for business and economic development. This does not mean, however, that there are no grants available.
A variety of local governmental, organizational, and non-profit groups may offer grants within the local community. Grants for renewable energy, daycare service expansion, and tourism development are a few of the business categories that are typically offered by local agencies. Foundations are another possible grant source. Foundations generally offer grants to those meeting specific criteria. A foundation may, for example, offer a grant to a minority-owned business or a business in a specific field.
Another potential source of grants for starting a small business is Corporate America. Many corporations offer grants for starting or expanding small businesses and encouraging community economic development.
Below is a checklist of potential small business grant sources or sources of further information:
- Local Government: Check with your city, county, and state offices. Contact the Chamber of Commerce and ask about local grants for starting a small business. Federal Grants: If your business is non-profit or educational and fits the requirements for federal grants, use the Federal Grant search resource at http://www. grants. gov to search for available grants. Local Library: Your local library has a variety of resources and information available to help you locate and apply for grants. Corporations: Check with those corporations located in your area first, then expand to those outside. Foundations: Local foundations and organizations may offer grants to related or specific businesses.
How to Apply for a Small Business Grant
Each grant opportunity will require that a business meet certain grant conditions and demands. Meeting and exceeding these demands will give you the best chance of obtaining a small business grant. There are documents that each grantor will require. Prepare the following before applying for a small business grant:
- Business Plan: A grantor will place more weight on an application that comes from someone who has done his homework and has prepared a plan for business success. Financial Statements: Bank statements, income tax statements, and other financial documents will be required for most grant applications. Official Application: Each grant will have its own application forms or guidelines. Typically, applications and guidelines are available on the grantor web site or through the mail. Meticulously follow the instructions and meet deadlines or your application will be rejected.
Conduct research into each grantor before you apply. Grants for starting a small business are often narrow in scope. Grantors are looking for businesses that fit with their unique mission.
If you qualify, grants for starting a small business are excellent financial options for getting your business off of the ground.