A grant is any financial assistance given by an entity such as a government, organization, or a person for a specific purpose dictated by the grant giver. It might be for a start-up, small business, and research purposes.
A business grant is an attractive funding option for setting up a small business or growing a start-up. Unlike a loan, the receiver of the grant does not have to pay back the money.
However, there are eligibility requirements that you have to meet for you to qualify for a grant. The grant giver will also most probably set conditions on how and on what you can use the grant for.
This blog explains what a small business owner can use a grant for. It also touches on some of the common conditions set by grant financiers on what and how you can use the grant.
What Can You Use Your Small Business Grant For?
There are several ways you can use a business grant. It will depend on the type of grant and the conditions that your financier might set on the grant. Here are some applications for grants:
- Using it as capital to set up a business
- Adding new product lines
- Opening a new location
- Hiring more staff
As a small business owner, you can use a grant to do these and many more things that are within the conditions set on the grant.
What Are the Conditions Set on Business Grants?
The conditions set on business grants will vary from grant to grant. The requirements will depend on the form of the grant. Is it a small business grant, federal grant, or a grant from private businesses?
Here are the general conditions that you might expect to meet on the expenditure of grant funds:
Funds must strictly be used on what they were meant for – grants for hiring new employees should do just that and not be used in any other business operation.
Receiving a small business grant entails regular updates – expect regular visits from the grant issuer to check on the progress of your business. You will need to provide proof of being on the right track to meet the goals set in your application.
Are There Additional Requirements to Using a Grant?
If you receive a federal grant, then you will have to meet some additional legal obligations. These requirements are there to ensure that the grant money is used properly.
Financial Reporting Requirements
After qualifying for a grant, you must file financial status reports regularly. You are required to fill out a basic financial report form known as Standard Form 269. This is a one-page document used by many agencies that offer grants.
This is an important requirement as it ensures that the grant is used only for legitimate business expenses. Therefore, it is important for you to keep accurate and update records of all financial transactions involving your grant funds.
The Federal government has the right to audit any entity that receives public funds at any time. Nevertheless, small businesses that spend less than $300,000 a year in Federal grants generally perform a self-audit.
Filling these forms is a quick and easy process. These are important as they help monitor the grant funds and ensure that the money is used properly.
Finding a grant that suits your needs is not an easy task. Competition is also fierce as many businesses apply for the limited number of available grants. But with the right preparation and application, you can qualify and reap the rewards that a grant brings to your business.
Use a Grant to Fund Your Small Business
Are you wondering whether your small business qualifies for a grant? You can search for grants in our Grant Marketplace to find many government and nonprofit organizations offering funds as grants.
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 creating new ways to get small businesses the capital they need to grow and is built from the feedback of women entrepreneurs.