Starting and running a small business can be nerve-racking, especially without a source of funding.Most entrepreneurs come up with perfect business ideas that could blow up
or solve a current crisis. However, they may be unable to actualize them due to a lack of
funds. It’s critical entrepreneurs know how to apply for a business grant.
There are various funding opportunities for small businesses, but unfortunately, some
tend to charge high interests or demand collateral to secure the loan. This ends up
straining small entrepreneurs or even causing them losses and forcing them to opt out
of the business world altogether.
If you are an entrepreneur looking to start a business or a small business owner seeking to grow your business, read on to know all about business grants and how you can
apply for one.
Small Business Grants and What they are Used for
A grant is money given to entrepreneurs or small business owners by the federal government, states, non-profit organizations, or corporations for either startup, growth, or expansion. Unlike loans, grants are free and do not require any form of repayment.
Government or non-profit organizations sometimes decide to set up grant money to steer innovation in a particular region, encourage minority entrepreneurs in a community, or promote businesses owned by women.
When this happens, the grants are available for all qualified people to apply.
Good Reasons to Apply for a Grant
Though they take time and effort to win, grants are a great way for your organization to gain new funding that does not need to be paid back. You can use grant money to start or grow your business. Applying for a grant also provides a great reason to reach out to other organizations and initiatives in your area with similar goals or that are serving similar populations.
Top 5 Reasons Why It’s Worth the Effort to Apply for Grants:
- You do not have to pay grants back
- Grants are intended to help entrepreneurs fund ideas and projects to provide public services and stimulate the economy. They are provided by the government and other organizations that are interested in funding great businesses.
- While some grants have qualifications around what you can use them on, the majority are meant to help businesses start and grow. There are even specific start-up grants that can be used for businesses that are just getting started.
- There is no limit to the number of grants you can apply to other than time and effort. If limited funding is holding your company back from growth, then putting in the effort to win grants is a great way to grow your business.
- While you may have a fantastic business idea, with limited time and resources it can be hard to grow your business as fast as you may want. By applying for grants you can expand both your capital and your network to help bring more awareness to your business. By partnering with organizations through winning a grant you also gain an expanded team of resources who are interested in helping your business grow.
- Once you have won a grant, you may find that other organizations are more likely to also see the value in your business goals and want to partner with you. The more far-reaching your partnerships the better positioned your business is to grow and receive additional funding.
Who Qualifies for a Small Business Grant?
Usually, the government gives small business grants to non-profit businesses or entrepreneurs seeking to launch a project in medicine, technology, or education, especially those people seeking to solve an existing problem.
The following demographics and organizations stand higher chances to qualify for a small business grant.
- Women or minority-owned businesses
- Green businesses
- Rural businesses
Documents Needed to Apply for A Business Grant
Qualifying for a grant usually requires specific documents. Though different organizations require different documents, the most common include:
- A detailed business plan
- A detailed budget for the grant request
- A written history, mission, and vision of the business
- A project description
- Audited financials
- A cover statement
- Tax-exempt letters for non-profit organizations
Steps for Applying for a Business Grant
After gathering the necessary materials, the next step is to identify specific grants. You can start with grants that are unique to your locality, then look at those offered nationally. After determining the type of grant you want, read through the requirements to make sure you are a suitable candidate. If you qualify for candidacy, then you write a business grant proposal.
It is advisable, if possible, to meet up with the funding source or get guidance over the telephone to explore your idea before writing the proposal.
How To Get Started
Before you begin applying for a business grant, do the following to ensure you increase your chances of being qualified.1. Get an expert opinion
Talking to someone who qualified for a grant before, a mentor, or an expert in the field will help you get acquainted with the “do’s” and “don'ts.” You can also ask them to review your business plan and give advice.2. Hire a grant writer
Grant writers are experienced in this field, and hiring one to write your proposal will give you an upper hand.3. Get applicable tax-exempt status paperwork
This will help you increase the odds of receiving the grant. This will help you increase the odds of receiving the grant.
Where to Find Small Business Grants
You can choose to apply for plenty of grants, including; government grants, general small business grants like the Barstool Fund, or industry-specific funds like the Amber Grant for women. There is a pool of opportunities; you just have to look in the right places.
We Can Help
Are you a small business owner looking to get funding for your business but not knowing where to look? Search for grants in our grant marketplace for free.
Fundid is on a mission to get women-owned businesses the capital they need to grow so that we can all close the business wealth gap. While 42% of businesses in the US are owned by women they only account for 4% of revenue generated by private businesses. We spend our time at Fundid thinking about what the world would look like if women also generated 42% of revenue and how to get them the capital they need to make that happen. Fundid is a challenger business bank, business lender, and grant marketplace built on the feedback of women entrepreneurs.