Small Business Grants
Small business grants offer a debt- and equity-free financing option for new businesses. With so much information out there, here’s where you should start.
Types of Small Business Grants Available
Hundreds of thousands of Americans launch their own businesses every year. According to the U.S. Small Business Administration, there were 27.9 million small businesses in the U.S.in 2010.
However, only about half of new businesses survive in their first five years.
Financing your small business is usually the number one concern. As a small business owner, you may have considered taking out a business loan. Unlike business loans however, you don’t have to repay small business grants, so there’s no worry over term length, interest rates, APR, or refinancing. It is important to note that most small business grant programs are fairly competitive and come with some key considerations.
First, small business grants are generally pretty specific about what you can spend the money on. Second, and maybe most importantly, small business grants are hard to qualify for—and even harder to find. The internet contains a lot of misinformation about grant opportunities, making it difficult to identify funding that is a good fit for your business.
If you are wanting to learn more about small business grants and where to look, here is a brief summary about the types of small business grants available to you:
Federal small business grants: Government agencies are probably the biggest distributors of grants, supporting a range of businesses and nonprofits. The application process for government grants can be intimidating, but federal grants are great opportunities for small-business owners looking to grow. Grants.gov is a comprehensive database of grants administered by various government agencies. If your small business is engaged in scientific research and development, you may qualify for federal grants under the Small Business Innovation Research (SBIR) and the Small Business Technology Transfer (STTR) programs. Lastly, USA.gov is the official government website that provides resources for starting or growing a small business, including a link to GovLoans, which provides information on all of the types of federal loans available for businesses.
State and regional small business grants: State or local grants are specific to a particular state’s social or economic concerns and are designed to work in tandem with Federal or other State grants, which means less funding. That said, they’re much more accessible due to lower competition than federal grants. You can search for grants your own state and industry by looking at your state’s department of commerce website or grants portal. Tip: some opportunities run across multiple states, so don’t give up if the grant looks right but your states don’t match!
Corporate small business grants: corporations often provide small business grants in the form of a contest. For winners, they offer money to grow your business. For big companies, it’s a public relations win to support local businesses. The difference though is that these types of contests involve pitch competitions or something similar and could involve more work (but also publicity!). Many corporations have a philanthropic component that includes small-business grants. While many provide grants only to nonprofits, some do give to for-profit companies. Because there’s no single central database for corporate grants, you will have to do a little more research to find opportunities that fit your business.