Find out how you can take advantage of these government grants to start or grow your business. Government grants are free federal, state, and locally funded programs to help small businesses start or grow. Apply only for grants that you are eligible to apply for and make sure you meet all of the grant provider’s requirements.
You can increase your chances of applying for grants by perfecting your resume, working with prominent local organizations, and consulting with your city or county economic development council. This article is intended for entrepreneurs and small business owners who are interested in obtaining government grants to help start or grow their organizations.
Starting or expanding a small business can be a costly endeavor, and several financial avenues can be taken to secure funding. For many small business owners, government grants are desirable. Federal, state, and local governments offer a variety of grants to help small businesses start up, grow, and develop. Here we explore the best government grants, explain how to apply, and share tips to help your business secure grant funding.
What are Small Business Grants?
Small business grants are essentially free funds provided to entrepreneurs and small business owners when they start a business or expand their organization. Unlike loans, grants do not have to be repaid. However, grants often have restrictions regarding the use of the money.
Grants may be free funds, but they are not easy to secure. Applying for grants takes time and preparation. Applying for grants takes time and preparation and is highly competitive, so small businesses should only apply for grants for which they are eligible.
Editor’s Note: Looking for the best loan for your business? Complete the survey below and one of our vendor partners will contact you to discuss your needs. Small businesses can seek a variety of grants, including private grants from corporations and grants from federal, state, and local governments. There are also grants available for specific industries and demographics. For example, minority business owners can seek grants for minority-owned businesses.
Business Grants and Business Loans
Grants and loans are both ways to finance a business. Here is a comparison of the two: Grants: Grants: Grants are desirable because they do not have to be repaid. However, not everyone is eligible for grants. For example, if you are just starting out in business (less than two years old), it is unlikely that you will receive a grant. Additionally, the grant application and proposal process often has stringent requirements. If you do not meet certain requirements, the agency will deny your request.
Loans: If a grant is not an option, you may choose a small business loan. Loans are also an easier funding option if you must finance your business while carrying personal debt. The best business loans will help you secure enough capital to meet your needs. In contrast, grant amounts are fixed and may not be sufficient. Additionally, some lenders may have more modest requirements, such as a minimum monthly income or a shorter minimum operating period.
Where can I find government grants for small businesses?
Government grants are a desirable source of funding for many small businesses. Government grants can be found at the following resources
SBA.gov: SBA.gov: SBA.gov is one of the best places to search for grants. This government site is full of a variety of grant and loan opportunities. The Small Business Administration (SBA) also offers SBA loans that differ in important ways from traditional loans.
Grants.gov: Grants.gov is the ultimate database of federal grants. You can search by grant type, eligibility, category (arts, commercial, health), and agency. Be warned, though: it takes some effort to organize the database. However, this may help you find the best grant opportunities for your company.
U.S. Economic Development Administration (EDA): EDA administers grants to economically depressed communities to stimulate new jobs and commercial growth. Small Business Development Centers: SBA’s Small Business Development Centers provide local resources to assist your business. Challenge.gov: Challenge.gov hosts challenge and award competitions to fund organizations with innovative solutions to pressing issues.
This is not the only resource for government grants. Companies should research all levels of federal, state, and local government to find the best grants.
What type of government grants should you look for?
Here are some well-known government grants that your business may be eligible for
- the Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs
The SBIR and STTR programs are two of the best government grants available to for-profit small businesses that specialize in scientific and technological innovation. These programs are highly competitive and are designed to help SMEs conduct research and development and ultimately commercialize their products. In addition to funding, these programs also provide opportunities for small businesses to work with non-profit organizations.
To be eligible for the SBIR and STTR programs, a small business must be U.S.-based, at least 50% owned by U.S. citizens, and operate with fewer than 500 employees.
These programs are divided into three phases
Phase I: Awards range from $50,000 to $250,000 and are for six months (SBIR) or one year (STTR). The objective is to determine technical merit, commercial potential, and feasibility.
Phase II: Awards are typically $750,000 and are for two years (SBIR and STTR). The objective is to continue the research and development efforts of Phase I.
Phase III: No funding under the SBIR or STTR programs. The objective is to pursue commercialization.
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State Trade Expansion Program (STEP) Grants
Small businesses seeking grant funding at the state level may want to consider the SBA’s small business grant, the STEP grant STEP awards are given to state entities to increase exporters and sales in their state.
Small businesses can find STEP awardees in their state and use STEP resources to expand their global customer outreach; STEP funding helps small businesses learn how to export, join foreign trade corps, and design and develop products that attract international buyers.
You can learn more about this program for global customer outreach on the STEP information page of the SBA website.
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Environmental Protection Agency (EPA) Grants
The EPA assists many companies, from small nonprofits to large state governments, by providing billions of dollars in grants and other assistance agreements. Primarily focused on helping human health and environmental development, EPA’s website provides helpful guidance on available training and grant opportunities, application procedures, rules and policies, and more.
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U.S. Department of Agriculture (USDA) Rural Business Development Grants
If you are a small business (less than 50 employees and less than $1 million in gross receipts) operating in a rural area (population less than 50,000), you may be a good candidate for a USDA Rural Business Development Grant.
The grants are awarded to towns, communities, state agencies, nonprofit organizations, and other public entities to benefit small businesses and startups in rural areas based on industries such as land acquisition and development, pollution prevention and abatement, rural transportation improvements, and economic development.
USDA also offers other rural grants, loans, and loan guarantees. You can refine your search based on specific states. For more information, visit the Rural Business Development Grants website.
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u.s. department of education grants
Small businesses operating in the education industry can take advantage of grants offered by the U.S. Department of Education. Dozens of grants are available for specific applications, including scientific research, state education, and special education. Each grant includes program information such as who is eligible to apply, total program funding, award limits, and number of awards.
You can view and apply for education grants on the U.S. Department of Education website.
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Service-Disabled Veteran-Owned Small Business (SDVO SBC) Program
The SBA provides federal grants to service-disabled veteran-owned small business owners through the Service-Disabled Veteran-Owned Small Business Program.
To qualify for this program, you must meet certain ownership and operational requirements. For example, your small business must be at least 51 percent owned and controlled by a service disabled veteran, and there must be one or more service disabled veterans who make day-to-day and long-term decisions.As a member of the SDVO SBC Program, you will be eligible to compete for set-aside contracts You will be able to participate in the competition for set-aside contracts.
How do I know if my business is eligible for a government grant?
Applying for business grants is a long and complicated process, so it is crucial to only apply for those that are eligible. To narrow down the list of grants, carefully review the details and deadlines for each grant you are considering. If you meet the general business criteria, take it a step further and make sure that your company’s goals are aligned with those of the government granting agency.
Will Ward, CEO of Assistive Listening HQ, advises, “Companies need to be aware of the problem they are trying to solve with the grant. They need to reassure themselves that solving this problem is part of the goal of the government agency providing the grant.”
Ward also recommends researching similar problems and investments that other companies are solving. This knowledge will help you prove your eligibility for grant funding. Once you have found a grant that matches your company’s goals, the next step in qualifying is to make sure you can meet the requirements of the grant provider.
How do I apply for a government grant?
Obtaining a government grant is not easy. Grants are technically free funds, but you must put in the time and effort to ensure that your application is as good as possible. You want to give your business the best opportunity to win the grant and receive the funds.
Ryan Pitylak, founder and chief marketing officer of ZenBusiness, notes, “It takes a lot of time to put all the paperwork together and apply for grants. We encourage you to do a cost-benefit analysis to determine if it’s worth it to get the grant.”
Obtaining a government grant is like obtaining any other grant:
Gathering grant application materials: A significant amount of time should be spent gathering application materials: business plans, business records, administrative details, and funding objectives.
Apply for the appropriate grant. Next, you need to identify what types of grants you can apply for, read the grant guidelines carefully, and pick out a few that apply directly to your business. Consider meeting with the funding source before you apply. Submit the grant. After you have prepared and submitted your grant application or hired a grant writer to submit it, the last thing you should do is wait. Wait at least three to six months, unless you are tracking your application or have next steps listed.
