Free money for your small business may sound too good to be true, but it is entirely possible with business grants. Business grants are funds awarded to qualified applicants and do not require repayment. Doesn’t that sound good? The first step is to look for the best small business grants. We are here to assist you with the top 2022 grants for small businesses.
A business grant is a sum of money given to small businesses that, unlike small business loans, do not have to be repaid. Government institutions, private businesses, and other organizations typically award business grants. However, one disadvantage of business grants is that many businesses will not qualify for them, and competition among those that do will be fierce.
However, grants aren’t always “free money” either. Even though grant money can be used any way you choose, grant givers typically have restrictions on how it can be used, and may even spend the money on materials they believe would benefit your company other than growing your business.
A monetary return isn’t the only thing issuers are looking for. Organizations that provide business grants to small businesses want to know that your venture will make a positive impact on their mission, whether that be a common good, an industry’s innovation, or a community’s economic prosperity.
Business grants are obtained through a competitive application process and are only awarded if your company meets all of the qualifications and requirements. The most appealing aspect of grants is that business owners do not have to repay the funding source. However, there are usually conditions that govern how the money is spent within your company.
For example, if your grant is intended to fund technological research, you may not use the grant funds to supplement payroll or other business expenses. Otherwise, you may be required to repay the entire grant amount to the provider.
Preparing for a business grant application is similar to preparing for an investor pitch; in fact, it may be more difficult because investors do not have a stake in your company to provide a safety net in the event of a loss.
—Get your first paying clients before submitting an application. To win, your idea needs to have some sort of traction to grow your business, and nothing illustrates that better than income.
—Build a narrative around your life. People can unite behind a compelling investment because it has a compelling narrative. The grant judges will find this story relevant, but more importantly, it will offer them confidence that you can attract new staff or raise additional capital as your business grows.
—Learn all you can about your company’s metrics. To win a grant, the committee will want to know how you plan to measure your success. An inability to explain how money coming in would affect money going out could put you at a major disadvantage if one doesn’t know one’s figures.
—You have to put yourself out there. To be considered, you must submit an application (make an “ask”). The response is already “no” if you don’t inquire.
—Requesting a business grant requires that you be clear, precise, and succinct. Formatting is as important as accurate grammar and spelling.
—Pay attention to the instructions given. Despite the fact that it seems like such a basic recommendation, many individuals ignore it. If X is requested, please deliver X. Don’t hand out Y and Z. A good example of this is the rule of thumb of “word count.” Don’t kick yourself out of the pool because you didn’t follow the instructions.
—Do some research to find out what grants are available and which ones are best suited to your needs. Government websites like grants.gov have a wealth of information.
—Hire an expert grant writer to help you with your application, and do your best to be comprehensive and patient. When we applied for our first grant, we were aided by ours.
—Be realistic in the quantity of money you ask for from your customers. If you ask for more than they are willing to provide now, they may decide to give you more in the future.
Grant applications require a significant amount of time and effort. In order to receive funding, you may need to go through multiple rounds of interviews or win a pitch competition in addition to filling out the required information. If you need cash quickly to keep your business running, you should look into small business loans or other short-term investment options first.
Consider the following when looking for Business grants to apply for:
There are thousands of grants available for you to choose from, but don’t try to do everything at once. Narrow your search as much as possible based on the grants that correspond to your business goals and the next growth milestone.
While many small business grants are reserved for existing businesses, aspiring entrepreneurs can apply for startup grants. If you haven’t started your business yet and need funding to get it off the ground, startup grants are a great way to get the money you need to reach your goals.
Once you’ve determined which grants your company may be eligible for, it’s time to start applying. The applications, like the qualifications for business grants, vary by case. Fortunately, there are a few things you can do to get ready to apply for your preferred business grants:
If you don’t already have a business plan, create one right away because it is critical to the success of your small business. This roadmap to your business’s first years and milestones will be critical when applying for business grants because it gives the grant issuer an idea of the trajectory your business will take and when its goals will be attainable.
The more you understand about the application process, the better your chances of receiving the grant funds you require. Thorough research of the application process, grantor, previous winners, and grant requirements will give you an advantage during the application process. You will also have a better idea of whether this grant is a good fit for you.
Small business grants frequently come with conditions and rules that you must follow if you receive the funds. As a result, it’s critical to ensure that the grant you’re applying for is the best fit for your company and its financial needs.
Check to see if you are eligible for the grant you are applying for. The reason for this is that if your company closely matches the qualifications, your chances of receiving the grant increase significantly. Applying for small business grants is a time-consuming and taxing process, and as a busy business owner, you should spend that time applying for grants that you have a good chance of winning.
Organizing your grant application materials is critical not only to ensure that you do not overlook any important parts of your application, but also to ensure that your application is easily processed.
Take your time and carefully read the application instructions to ensure you’ve completed each section and requirement. If a small business grant application is incomplete or incorrectly completed, it will frequently not be processed, and will either be rejected or will cost you more valuable time in obtaining the funding you require to support your business.
Search engines like Grants.gov or GrantWatch can help you find small business grants, or you can look for options on a state-by-state basis through the State Business Incentives Database and your local chamber of commerce.
There are numerous nonprofit and corporate organizations that provide grants and other forms of assistance to small businesses. Here are a few examples of such programs that are available to qualified small businesses in any industry:
These two funds, sponsored by the US Small Business Administration, are the largest federal funds available for domestic startups working on innovative technology and R&D. Both programs are competitive and involve public-private partnerships with governmental institutions in areas of critical research. STTR is for more technology-driven companies, while SBIR is more for research-based work.
In addition to the SBIR/STTR programs, the Small Business Administration funds this grant, which provides funds to states and local governments to help them export and expand into international markets. Your local or state government manages and distributes these, but you can learn more on the SBA’s website.
The EDA sponsors several grants divided by industry on a state-by-state basis; it also supports certain funds designed to assist businesses post-covid. Depending on your business type, you have several grant options through the EDA.
The EDA grants, for example, include funds for tourism and outdoor recreation, assistance with statewide planning, and economic relief for struggling businesses — as well as other pitching and entrepreneurship competitions in which you can compete. You can directly apply on their website.
Part of the US Department of Commerce, the MBDA offers pitch competitions and grants throughout the year for domestic minority-owned businesses. They also have dedicated resources and events for minority entrepreneurs looking to get started, so it’s worth checking out their website for more information.
The US Department of Agriculture sponsors a variety of grants designed for small rural-based businesses (under $1m in revenue, with fewer than 50 workers). There are multiple grants to apply for based on your business plan (such as whether you plan to use the money for training or technical assistance, acquisition of land or machinery, or community economic development). However, you need to demonstrate the benefit to rural cities or towns in some way. Grants range from $10k to $500k.
Throughout the year, the National Institute of Health sponsors several grants for pharmaceutical, scientific, or biotech startups. On their website, you can look for research grants, fellowships, and other resources such as career development.
To find grant opportunities from other federal and state agencies, such as the Department of Energy, the Department of State, or the Environmental Protection Agency, the SBA compiles a list of open grant applications on their website, which you can browse.
The stakes are high for FedEx’s small business contest, with three grand prize winners receiving $50,000 each and seven first-place winners receiving $20,000. Winners receive free software subscriptions, website audits, and other resources such as financial or packaging consultations in addition to the money.
Fintech startups can apply to Visa’s competitive grant program, which has a total prize pool of over $500,000. Startups working with blockchain, cryptocurrency, digital wallets, alternative lending, merchant services and retail technology, and other technologies are eligible. Visa chooses five regional finalists to compete in the global finals event.
Female founders of early-stage startups with at least $75k in revenue are eligible for the year-long fellowship program. Fellows receive mentorship, virtual education, peer-to-peer networking opportunities, and a $5,000 grant.
Capital One’s Business Grant is available to black-owned businesses. The prizes range from $10,000 to $10,000, and winners have access to Capital One’s business hub and peer network for small business owners.
This grant, sponsored by Mastercard, is for Black, female-owned businesses. Each grantee receives $10,000, as well as digital business tools, mentorship, and other benefits. This grant is available both nationally and locally in select US cities.
Entrepreneurship workshops and funding are provided by Operation Hope to founders from underserved and impoverished communities, as well as those who are unable to obtain traditional loans or capital. This intensive 8-week program combines business training, financial counselling, and networking to assist startups in getting started.
The Veteran Small Business Award, sponsored by StreetShares, provides financial assistance to veterans looking to start their own businesses. Their grant includes coaching, educational content, mentorship, and networking events to help military members advance their careers after they leave the military.
In collaboration with major corporations, IFundWomen provides a variety of grants. You can apply for individual grants or to their universal database, which matches qualified entrepreneurs with relevant grant opportunities.
SoGal is an online community for diverse entrepreneurs and investors that focuses on female and nonbinary founders in order to close the entrepreneurship diversity gap. Their startup grant is aimed at Black, female-owned businesses, with awards ranging from $5,000 to $10,000.
If you can find a business grant for which you are eligible, there is no reason not to apply—it is free money, after all. However, because grants are highly competitive, don’t put all your eggs in one basket. Choose one of the above solutions to quickly obtain the capital you require, and then apply for the grant as a backup. When it comes to financing business expansion, wise entrepreneurs keep their options open.
Business grants are essentially free money for your business. Grants are typically awarded by government institutions, corporations, or other organizations. If you meet the qualifications to be awarded one, you do not have to repay the business grant funding.
The first step to get a grant to start a business is to find startup grants and verify your eligibility. It’s important that you look for startup grants with qualifications that you can easily meet. Next, complete the application process.
The qualifications for small business grants vary based on the type of grant and the grantor. However, a few factors that can affect your eligibility are the number of employees you have, your monthly and yearly revenue, and how long your business has been in operation.
It is far easier to get a small business grant that is specialized. Grants with broad requirements attract more applicants and are therefore more competitive. Finding a small business grant that aligns closely with your business will increase the odds of you receiving the grant.
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