What is Business Grant?
A business grant is a form of funding that doesn’t need to be repaid. In other words, grants are essentially free money for your business. Grants, as you can see from the above list, can come from various places, including the federal or state government, large corporations, smaller nonprofits, private individuals, and more.
However, as you likely also gathered from our list of small business grants, there are typically several criteria that must be met to be eligible for a specific business grant. Grants are also incredibly competitive—after all, who wouldn’t want free money? The uses of a business grant will vary depending on the specific grant, but may include helping you grow your business, retain or create jobs, or develop a new product or idea.
How to Apply for a Business Grant
Each grant you apply for will have its own requirements and application process. However, keep these things in mind when applying for business grants.
Do your research. As this list demonstrates, there are many business grants available and more are added all the time. Since grants are so competitive, you may find the most success by finding smaller, more localized options. Looking into your state resources, as well as any professional and industry groups you belong to, can help you uncover more options that your business is eligible for. However, make sure these are legitimate grants and be wary of scams.
Make sure you meet the requirements. Most business grants have a laundry list of requirements that must be met in order for a business to be eligible. Make sure your business meets all of these requirements before applying—otherwise, you’ll be wasting your own time and resources.
Update your business plan. Most business grants will want to see a business plan to ensure you have a well-thought-out strategy for your business. If you haven’t updated your own plan since you first launched your business, it’s worth taking another pass to make sure everything is up to date and your financial data is current. This also gives you an opportunity to detail how your business meets the grant requirements.
Submit your application on time. This is a simple, but important one. Note the grant deadlines ahead of time to ensure your application is complete and submitted through the appropriate channel by the deadline. With so many businesses vying for limited funds, you don’t want to take yourself out of the running over such an easily avoidable slip.
Follow up. Just as you might when you apply for a job, it’s a good idea to follow up about your grant application to ensure it was received and to let the reviewers know you’re able to provide more information if needed. Most grants will provide information around when a winner will be announced, but if this information is missing, it’s also worth reaching out to get a better idea of when you should hear.
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Business Grants vs. Business Loans
Small business grants have one major advantage over business loans: You don’t have to pay back a grant. A loan, on the other hand, has to be paid back with interest, which can be tough on new businesses and businesses with cash flow struggles. However, qualifying for a small business grant is also tough, so you may need to explore more traditional small business financing options that can work for you.
Two business loan options to consider if you can’t qualify for a grant funding for your small business are microloans and SBA loans.
Microloans are loans under $50,000, and usually have low eligibility requirements and reasonable interest rates. Many of the same organizations that provide grants, such as nonprofits and government organizations, also provide microloans. So, if you don’t qualify for a small business grant, we suggest asking the organization if they provide loans.
SBA loans are another alternative if you’re unable to qualify for a grant. The federal government guarantees SBA loans and works with banks to get these loans in the hands of small business owners. Because of this, SBA loans have low interest rates, long repayment terms, and larger capital amounts. You can approach your local bank and see if they provide SBA loans, or you can apply for an SBA loan through NAV.
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