How to Get a Business Grant for Your Startup
Who Should Apply for a Startup Business Grant and How to Do It
Free money to start your business. Could anything be better? Although small business owners all dream of receiving grants to fund their startup, these grants are neither plentiful nor easy to get. However, individuals or organizations that know where to find them, and how to apply for them effectively, are more likely to have success. Before you invest the time and energy in finding and applying for a small business grant for your startup, it’s important to understand what criteria exist for startup grants, and to decide whether or not your particular business or industry qualifies.
What Is a Startup Small Business Grant?
Startup grants are simply a sum of money that groups offer to small companies and nonprofits to help them with their work. Grants aren’t like loans, in that you don’t have to put up collateral or pay late fees or interest. In fact, businesses don’t have to pay back grants at all. Essentially, the money is free.
Most applicants for startup business grants seek funds for projects with specific parameters and measurable outcomes. Grant money usually comes with limitations on how it can be spent. For example, if you apply for a grant to cover the costs of seeds and equipment for an agricultural project and receive the grant, but you use those funds to pay for staff, you may have to pay the funds back. More importantly, you'd be guilty of fraud.
If you do receive a small business startup grant, it’s therefore imperative that you meet the funders’ accounting and reporting guidelines and that you spend the money only for what the grant covers.
Who Qualifies for a Startup Small Business Grant?
In general government startup small business grants aren’t available for starting a business, paying off debt, or covering operational expenses. And unless your business is a non-profit or launching a project related to areas such as science, medical research or education, government grants can be very hard to find. That being said, there are startup small business grants available for specific business types and owners, including:
- Green businesses
- Rural businesses
- Women, veteran, or minority-owned businesses
- Nonprofit organizations
Unfortunately putting “startup small business grant” into your search engine won’t necessarily provide you with an up-to-date or complete list of available grants organized by business type. Our guide to available small business grants is one place to start your search. Some other places to research include:
How to Apply for a Small Business Grant for Your Startup
Although startup small business grants are difficult to obtain, there are things that you can do to increase your chances. Bear in mind that grant-makers are looking for strong applications.
- State your objectives clearly, include a well-constructed business plan, and make sure your budget is realistic.
- State measurable objectives for the short and long term, as well as your methodology, benchmarks and timetables.
- Bring in outside experts as necessary and appropriate; an accountant or consultant can add credibility to your application process.
Some organizations—including many local colleges and universities—offer workshops for potential grant applicants where you can learn more about what specifically the funders are looking for and how to tailor your application to their needs. Keep in mind that all applicants must adhere to strict guidelines. Don’t give the funder any more or any less than what is requested. Make sure your application is both complete and accurate. An incomplete application, or one that contains inaccurate information, will not be considered.
Above all, remember to be clear about how you intend to use the funds requested, and if you get the grant, be sure to only use the funds for the stated purpose.
The Bottom Line
All business grants are highly competitive. Once you research available grants and decide to apply, you might decide the application process is not a good fit for your skills and that you need some professional help. You could attend a grant writing class, or send an employee. Another option would be to hire an experienced grant-writer research and write your startup business grant proposals. No matter how you approach the grant application process, the rewards are there for small business owners who put in the time and energy to submit a complete and compelling proposal.
Grants.gov. "Grant Fraud and the Responsibilities of Award Recipients," Accessed Sept. 30, 2019.