Unlocking Opportunities: Guide To Small Business Grants

Small business grants can help you get the funding you need to start or grow your business. Grants are gifts — you never have to repay the money — so naturally many businesses apply for one, making the process highly competitive.

Although some websites and influencers will lead you to believe that abundant grant money is available to small business owners, the truth is most entrepreneurs never receive any grants and the majority of applications get rejected.

Ultimately, it’s best to base your business plan on the assumption that you won’t receive any grant money. But there is no penalty for applying, so it might be worth your time to try anyway. If your business is a good match for a particular grant and you carefully plan your application, you’ll have a higher chance of receiving free funding. Here’s a look at how to maximize your chances of obtaining a small business grant.

How small business grants work

Small business grants are offered by nonprofit organizations, foundations and state and local governments. Each organization has its own criteria for awarding grants and typically aims to give their money under the guise of a public good.

Although the funds don’t need to be paid, they do need to be used exactly as promised. Businesses that receive grants have to account for and report on how the money was spent, and if it differs from the approved budget, the funds may be due back with interest. It is important to study the terms of the loan before applying.

Who gives grants?

Each small business grantor has their own reasons for giving grants. Local and state governments professional associations and parties interested in creating more equal opportunities may offer grants. Reasons for offering small business grants can include:

• To help businesses grow
• Create more jobs.
• Help others get started in the industry
• Provide equal opportunity for underserved populations

Considering what makes you or your business unique can help streamline your search for grant opportunities.

Where to look for small business grants

As a small business owner, you may receive messages or emails about grant opportunities that seem “easy to get.” Unfortunately, most of these are scams or at least a poor investment.

Grants are not as common as they might lead you to believe, and you don’t need to buy a list to find grantors. People who are giving out grants want to give away the money, so they don’t make it hard to find them. A cursory knowledge in online research is the only tool you need to find these grants.

To find government and regional grants, try an internet search for the words “small business grant” plus the name of your state, city, county or region. You can also check Grants.gov for a list of government grants. This official government resource can walk you through the entire process of searching for and applying to grants.

If you are a member of any professional organizations, check their website or ask your membership coordinator if small business grants are available. Corporations often offer grants in particular industries as well.

Nonprofit and foundation grants are often specific to a particular industry or group of people. To find them, search for “small business grant” plus your industry. If your business owners are part of a marginalized or special interest group, try pairing those words with “small business grant.”For example:

Popular business grant programs

Here are some well-known examples of small business grants. This list is only the beginning, but it will give you an idea of what’s available.

How to successfully apply for a small business grant

For every grant, there might be hundreds, if not thousands of applicants. That’s why so few businesses receive grant funds even though there are many grants available. The best way to improve your odds is to apply for grants that are a good fit for your business and show the grantor how you can help them achieve their mission.

Research the organization

Before you write a grant request, imagine yourself as the grantor. If you decided to give money away to entrepreneurs, how would you choose a recipient? What would you be looking for?

Most grantors will tell you what their criteria are, but it’s worth your time to research the organization or the history of the grant to learn more about who it’s intended to help. Small business grantors don’t want to help only the business owner. They’re looking for a larger impact on the community, the world or within an underserved population. Look for ways to highlight how your mission aligns with theirs.

Review the criteria

The best place to begin is by reviewing the grant qualifications to make sure you meet them. This might include details like how long you’ve been in business, an annual sales minimum or maximum or a certain number of employees. There’s no point spending time on a grant request that won’t get funded.

Follow instructions

Go through each section of the instructions and make sure you’re providing exactly what is requested.

You might be asked to provide market research and define your mission statement. Be prepared to answer questions about why your work is important to your community and how you plan to ensure equity for your customers and staff.

Budget carefully

Pay particular attention to the budget you submit and be truthful in your reporting. The ideal candidate for a grant is walking a line between showing need and looking stable. If it doesn’t look like you need the money or it seems like your business is on the verge of bankruptcy, you will likely be denied.

Remember, if you receive the grant, you’ll be required to demonstrate that you spent the funds according to this budget.

Apply for more than one grant

Hold on to the budget report and any other materials you create for your application in case you want to use them again. The more grants you apply for, the more likely you are to receive funding.

The bottom line

Grants for small businesses are not as common as some resources might lead you to believe, but there are grants available. If your business is minority-owned or creates jobs in the community, there are organizations and government agencies that would like to help you.

However, these grants are quite competitive. Creating a compelling grant request and applying for more than one grant in your niche will increase your odds of getting funds.

Frequently asked questions

• Are there free grants to start a business?
  

  There are grants available, although grant funds aren’t as abundant as some sources might lead you to believe. If your business will be minority-owned, fill a need in your community or create jobs, you might qualify for funding.

• Are there small business grants for women?
  

  Yes, there are many grants available for women-owned businesses. Well-known grants for women entrepreneurs include the Amber Grant, Tory Burch Foundation Grant and Cartier Women’s Initiative Award.

• Are small business grants available for startups?
  

  Many grants are available for startups, particularly if the business will create jobs or is minority-owned. You’ll need a solid business plan and detailed budget to persuade a funder to help you create a business.