Автор: Financial grants that can help your small business grow and succeed are available from a variety of sources—the federal government, state and city governments, and a wide range of philanthropic organizations and corporations. Applying for these grants can be time-consuming, but they have several significant advantages over small business loans if you can get one. Most importantly, grants don’t need to be repaid.
Key Takeaways
- Many financial grants for small businesses are available from the federal government, state and local governments, and other sources.
- Most grant programs accept applications online.
- Before you apply, make sure your business meets the eligibility requirements, some of which can be very specific.
- Bear in mind that small business grants can be highly competitive—especially those funded by the federal government—and you may not be successful on your first try.
How to Find a Small Business Grant
The first step in applying for a government grant or other small business grant is to find one or more for which your business might qualify. In fact, this can be the most time-consuming part of the whole application process. Here are some resources that can help.
For Federal Grants
You might want to start at Grants.gov, which provides a guide to federal grants and a search tool for finding suitable ones.
One of the most common places to obtain a business grant is the U.S. Small Business Administration (SBA). The SBA provides grants to small businesses based on a variety of qualifications, such as the industry of the business and the background of the owners, such as gender or minority qualifications.
Other federal agencies that a business owner can look to for possible grants include the Department of Agriculture (USDA), the Department of Energy (DOE), the Environmental Protection Agency (EPA), the U.S. Economic Development Administration (EDA), and the National Institutes of Health (NIH).
For State, Local, and Other Grants
Your state or local government may also offer small business grants and loans. You can search for these on the Council for Community and Economic Research’s State Business Incentives Database.
Finally, Small Business Development Centers (SBDCs) may also be helpful in finding grants. Approximately 1,000 of these centers are across the country, making it possible to find one near you.
Steps to Applying for a Small Business Grant
The wide range of sponsors and available grants makes it difficult to describe the «typical» process for applying, but in general, it can be broken into three main steps.
1. Check Your Eligibility
Before you spend the time applying, check to see if you are eligible for the grant. This will save you and the reviewer a significant amount of time. All grants have a goal and to achieve that goal they have to comply with a set of requirements laid out by the organization on who they can accept for the grant.
Eligibility requirements may include the size of the business, a minimum amount of revenue a business brings in, the gender of the owners of the business, what type of activities the business is involved in, and more.
2. Collect Any Backup You Need
All grant applications will require certain documents, so make sure you have organized all relevant information before applying to streamline the application process.
Information that might be required as part of a grant application includes:
3. Invest Some Time in the Application
The complexity of your grant application—and the amount of time you’ll need to spend on it—can vary depending on the sponsoring organization and the type and size of the grant. Grants from the federal government, for example, can involve many steps.
33.2 Million
The number of small businesses in the U.S. as of 2019, from the SBA’s latest data provided in March 2023.
Tips for Qualifying for a Small Business Grant
Since business grants are such an attractive source of funding for small businesses, they tend to be very competitive. This is especially true for federal grants. State and local grants can be less competitive, but to maximize your chances of success, you should still take the application seriously.
Here are some tips to make your application as competitive as possible:
- Read the grant objectives. Make sure you refer to the grant’s objectives in your application. From the sponsor’s point of view, the best applications are those that show a clear understanding of those objectives.
- Spend time on your business plan. A well-developed and well-written business plan is arguably the most important part of your application. Take the time to ensure yours is of the highest quality, detailed, polished, and able to answer any foreseeable questions.
- Explain how you’ll use the grant. Because most small business grants are meant to be used for a specific purpose, be sure your business plan indicates how you’re going to do that. The more detail you can give here, the better.
- Check any funding match requirements. For some grants, you’ll be required to match the sponsor’s funds with your own. Determine that you could actually come up with the money before you apply.
- Apply early. Most grant programs have a finite pool of money and will stop considering applications once it has run out for the year. Keep an eye out for any deadlines and apply as early as you can.
While all these considerations can seem like a lot when you first start applying for grants, most businesses find that it gets easier with time. Once you have all your documents and are accustomed to writing in a way that grant officers understand and like, you’ll find that applying for grants becomes significantly easier and ultimately more successful.
What Is Considered a Small Business?
Definitions vary, but in accordance with SBA regulations, the majority of manufacturing firms employing 500 individuals or fewer, as well as non-manufacturing enterprises with average yearly earnings below $7.5 million, meet the criteria for classification as a small business.
Why Would a Grant Be Denied?
There are many reasons a grant application can be unsuccessful. You may not be eligible for the grant, or you might not have made it clear enough how the grant will support and develop your business. Alternatively, it could be that your application was great, but the donor received so many applications that it was unable to fund you this time.
Are Small Business Grants Taxable?
Yes, with very few exceptions, grants to businesses are taxable. Business loan proceeds, on the other hand, are not considered income and are not taxable.
The Bottom Line
A grant can be a better option than a loan as it is like free money that doesn’t need to be paid back and comes with no interest charges like a loan does. Though applying for a grant can be competitive and challenging, it may be worth it for your business.
You can maximize your odds of success by devoting some serious time to researching appropriate grant opportunities, making sure your application addresses the grant sponsor’s objectives, and applying early before the money runs out.
