Small business grants are often a hot topic among entrepreneurs and small business owners. It sounds easy. Locate a government small business grant, apply, and before you know it, you get free money for your business.
However, those government grants generally do not exist unless you are in high tech and/or scientific research. If you are in one or both of these areas, you can find out what grants are available and if you may qualify by checking the Small Business Innovation Research (SBIR) Program.
Where to Look for Business Grants
Business grants are available through specific state and local programs, some nonprofit organizations, and other groups. For example, states may provide grants for expanding child care centers, creating energy-efficient technology, and developing marketing campaigns for tourism. These grants usually require matching funds or combine the grant with a loan. The amount of the grant money available varies by business and by the grantor.
Federal, state and local governments do offer a wide range of financing programs to help small businesses start and grow their operations. Consider checking out the Small Business Association's online resources like ASBA Loans Explained.
How to Find Small Business Grants
The process of finding a small business grant program and reviewing the requirements is time-consuming. Eligibility can be based on location, sales revenue to date, years in business, sex, race, and purpose of funding. Should your business embark on a small business grant-seeking mission? Here are four questions that will help you find an answer:
- Do you have the time and resources to search for a small business grant program and apply for it?
- Can you hire a consultant or learn the grant application process by yourself?
- Does your business need the money now for expansion or can you wait up to a year?
- If you do undertake the grant process, will it hurt your business by occupying too much of your time?
The best place to start looking for small business grants is the Catalog of Federal Domestic Assistance (CFDA). The CFDA lists thousands of grants from all government agencies that are made available through state and local government, and the publication is free.
5 Tips to Win Small Business Grants
If you do find a small business grant program available for your business, be ready to go through a lengthy, approval process. With funding cutbacks and high competition be prepared with the following 5 grant tips:
- Provide complete and accurate information in the application. An incomplete application may not make the review process or will delay the review and approval process.
- Get to know your grant officer and their constraints, their information needs and timing.
- Stand out from the crowd with a well-prepared business plan, as required. Demonstrate how the grant will benefit your business and satisfy the goals of the grant.
- Bring in outside experts as necessary and appropriate. An accountant or consultant can add credibility to your application process.
- Keep in touch. Make regular contact with the grant office in a professional, non-intrusive manner. It's OK to ask if they have questions or concerns that you may address.
The task of locating and applying for a small business grant is not for the faint of heart. Take an honest look at alternative sources first, such as loans, personal credit lines, friends, and family. Many successful companies today were grown the old fashioned way...bootstrapping.