Small business grants have become a hot topic these days as the pandemic continues to disrupt consumers’ lives and strain the economy. The federal government has stepped up big time, providing small business stimulus grants and other forms of small business financing.
One of the most popular forms of government small business loans, Paycheck Protection Program (PPP) loans, offers 1% fixed APR and a high approval rate. As long as recipients track their finances and follow the guidelines, they can qualify for up to 100% of the loan being forgiven. Given the fact that the money could potentially come with no repayment obligation, it’s understandable why some people viewed this government financing more like a form of small business grants. But to be clear, they are definitively loans and not SBA grants.
So What Are Small Business Grants?
A small business grant is money awarded to your business by a government agency, nonprofit organization, corporation, or other entity. The biggest advantage of this money is that it never needs to be repaid.
Another amazing aspect of small business grants: the money is often earmarked for those who need it most. This means that business owners who are traditionally excluded, such as women, people of color, and military veterans, can be prime candidates.
You might be wondering why anyone would give out free money for small businesses. It sounds incredibly generous, but things like this usually come with a catch. In most cases, the entity providing the grant wants to support businesses that align with their goals.
For example, let’s say a federal agency is trying to spur agricultural innovation that helps farmers to grow their crops. To facilitate the development of better technology, that agency might offer $500,000 grants to American businesses actively working on agricultural technology projects. As long as the money from the grant went toward these related projects, it’s almost like a gift from the agency to promote the complementary work being carried out by the business.
Another example might involve a nonprofit organization that’s committed to helping more women pursue their entrepreneurial dreams. This organization could build upon this mission by offering $35,000 grants to small businesses owned by women and demonstrating that there is no gender wage gap for their employees.
“A grant is money that’s given to a business for a specific purpose,” explains The Balance Small Business. “Whereas a lender wants you to demonstrate your ability to repay the loan, an agency that offers grants wants to see that your business aligns with its mission or a specific initiative. Businesses can qualify for grants for many reasons, whether it’s because the business supports a specific government initiative or its ownership meets certain qualifications (women and minorities, for example). There are a variety of government, nonprofit, and private entities that fund grants for a wide array of projects and programs.”
Given this symbiotic relationship between the grant giver and the recipient, you could safely say that while the money doesn’t need to be repaid, it’s not really free. There will always be strict qualifications and expectations for anyone hoping to obtain a grant.
How Do I Qualify for a Small Business Grant?
Imagine you’re at a local elementary school on a particularly hot day. Hundreds of kids skitter around the playground having fun while trying to stay in the shaded areas. Suddenly, a lunch worker comes out to the playground with a cooler full of popsicles.
What would happen? Pandemonium, that’s what. If there were 100 popsicles in the cooler and 500 kids on the playground, expect fierce competition for those frozen treats. Most of the popsicles would probably go to the kids closest to the cooler and the rest to those aggressive enough to make their way through the crowd.
Getting a grant for your small business isn’t so different. There are more than 30 million small businesses in America, and it’s a safe bet that 99.99% of them could use extra money to help with their operating expenses. So if a federal agency or corporation announces that they’re giving away lucrative grants, you can expect a surge of applications.
“Grants for small business can be hot commodities,” says grant guru Kate Harrison. “Even if you do your research, find available grants, and decide to apply, you might find that the application process isn’t a good fit for you or your business. If you’re feeling intimidated by the application, consider bringing in another party to help you fill it out. Grant-writing classes, conferences, and workshops may be able to help, too. Another option might be to hire an experienced grant writer to develop your startup business grant proposals for you. No matter how you approach the process, the rewards are there for small business owners who put in the time and energy to submit a complete and compelling grant proposal.”
Successful grant applications usually come down to precision. The small business owner did their due diligence and found a grant they were uniquely qualified for. Then they carefully filled out the application and included all the details that the grant provider requested.
This means that you do not want to cast a wide net when searching for small business grants. Continuing with the fishing metaphors, what you should do is “sight fish,” which is when an angler carefully scans the water until spotting a fish to target. Then, the angler casts directly to the fish with a lure specifically chosen for that species in that body of water at that time of day.
Just as anglers keep a tackle box full of fishing lures, you should have a collection of proven assets ready for grant submissions. First and foremost, you need to have a rock-solid business plan—nearly all the other required assets will be tied in one way or another to the details and goals outlined in your plan.
How Do I Write a Good Business Plan?
One of the best ways to create a business plan is to ask yourself questions about your business, then let the answers form the foundation of your plan. For example:
- What is your mission statement?
- What’s your primary business objective?
- What are your key strategies?
- What are your financial needs?
- What are your financial projections?
- What have you learned through competitor analysis?
- What have you learned through market analysis?
- What have you learned through industry analysis?
Every detail that goes into your plan has the potential to become a guiding star as you seek to improve your business. And when you approach a grant provider, these details are written proof of your organization, purpose, and strategy.
Grant applications will often ask for other details, like how long you’ve been in business, where your revenue stands, what your Employee Identification Number (EIN) is, and how you intend to spend the grant money if you receive it. Any business that has a great business plan will already have these details worked out, as they’re interconnected.
Be sure to review carefully any application that you’re considering filling out. Look for restrictions that might exclude your business so you don’t waste time applying for grants you could never acquire. Likewise, watch for the unique instructions the grant provider has included. If you fail to include a required document, it’s likely that your application will be fast-tracked to the garbage can.
How Can I Get Free Grants for My Small Business?
When it comes to getting small business grants, the key tactic is knowing where to look—and the first place any business grant seeker should go is Grants.gov. This site is the sorting house for the hundreds of federal grant programs provided by various administrations and agencies.
Set aside ample time to search through these small business grants by industry and other factors to see if you’re eligible. If you’re in the technology industry, you’ll quickly notice that there are more potential opportunities for your business than those in other industries—but that doesn’t mean that other industries don’t have options.
Once you’ve canvassed Grants.gov for ideas, you can move into the private sector. These small business grants are often offered by programs related to entrepreneurship and social impact. While the competition can still be intense, you might be able to find lesser-known options that present a clearer road to approval.
The Best Sources for Small Business Grants
Here’s a list of some favorable grants that you might want to consider. This list is by no means comprehensive, but it’s intended to give you an idea of the range of possibilities that exist in the federal, corporate, and nonprofit worlds.
- National Association for the Self-Employed (NASE) Growth Grants Program: These business development grants are on the smaller side, but no entrepreneur has ever said no to $4,000.
- The Tony Burch Foundation’s Fellows Program: This program supports female entrepreneurs by awarding 100 grants each year. The grants are worth $5,000 apiece and are intended to empower businesses to take their operations to the next level.
- #GIRLBOSS Foundation Grants: For women working in the creative world, these $15,000 grants can provide a major boost. The foundation awards 2 such grants each year.
- Open Meadows Foundation: The social impact of your small business is crucial when applying for these grants. Each grant is valued at $2,000.
- Small Business Innovation Research (SBIR) Grants: Only a small percentage of small businesses meet the requirements for this technical grant program from the Department of Energy, but the amounts can reach up to $1 million.
- FedEx Small Business Grant Contest: Here’s a great option for small business owners hoping to make an impact in their communities. There is voting involved, requiring promotional efforts on your part. But that could be time well spent, as the grants can be worth up to $50,000.
- Small Business Technology Transfer (SBTT): Another lucrative grant program provided on the federal level for those in very specific fields.
- Rural Business Development Grants: Does your business operate from a rural area? If so, you should look at this program for possible grant funding.
- Minority Business Development Agency (MBDA): As the name implies, this program is intended to assist minority entrepreneurs. The grants can reach up to $300,000.
- Community Programs to Improve Minority Health Grant Program: These federal grants are intended for businesses aligning with key healthcare goals. If you qualify, you can receive up to $500,000.
- StreetShares Foundation Veteran Business Grant: If you (or your spouse) are active duty military or a veteran, you could qualify for this popular grant program. The dollar amount isn’t huge, but it can still provide a nice boost for your business.
- IdeaCafe Business Grant: Can you get a grant to start a business? The answer is yes, and this program is one of the many potential sources. Whether you currently own a business or are still trying to get your big idea off the ground, these $1,000 grants provide a spark plug.
- Bill and Melinda Gates Foundation Grand Global Challenges: Innovative companies that make an impact around the world should consider seeking these lucrative grants.
- Department of Justice Grants: A wide array of grants is available from the Department of Justice. If your business contributes to public safety or law enforcement, you might want to check them out.
- Eileen Fisher Grant Program: These grants are intended to help female entrepreneurs reach new heights. As many as 10 businesses are approved for funding each year.
- The Amber Grant Program: These business grants for women range in size from $500 to $5,000, opening up additional opportunities for your business. And at the end of the year, 1 of the awarded businesses will be chosen for an additional $25,000 grant.
- InnovateHER Women Business Challenge: There’s a higher-than-average number of hoops to jump through if you want to compete for these small business grants, but they can reach up to $40,000.
- The Save Small Business Fund: Provided by the US Chamber of Commerce Foundation, these entrepreneurial grants are set aside for businesses with 20 or fewer employees.
- National Institutes of Health Grants: If your business is doing innovative things in healthcare, you might qualify for some of these federal grants for small businesses.
- Environmental Protection Agency Grants: As you might guess from the sponsoring agency, these grants are set aside for businesses that provide solutions to protect the environment.
- Department of Transportation Grants: Perhaps your business is more focused on transportation solutions. If it involves planes, trains, or automobiles, you might want to check out these grants.
- National Oceanic and Atmospheric Administration (NOAA) Grants: For businesses that provide products or services aimed at helping maintain ocean and coastline health, these small business grants could be a possible option.
- Distance Learning and Telemedicine Grant: Rural America needs better connections to health and education. So if your small business provides something in these fields, perhaps this program from the Department of Agriculture has something to offer you.
- Visa Everywhere Initiative: The competition is fierce for these $50,000 small business grants, but you should definitely check out this initiative if you feel that you have a particularly innovative solution to offer America.
- The Cartier Women’s Initiative Awards: These $100,000 grants are given to several women each year to develop their businesses. On top of that, grants valued at $30,000 are awarded to 14 other deserving entrepreneurs.
This list only represents the tip of the iceberg when it comes to grants available to your small business. You’ll need to search through the options strategically to find the best matches—this will put your business in the best position for success.
What Is the Easiest Grant to Get?
That’s an excellent question! For some small businesses, it might be SBA grants or other types of government small business stimulus grants. Other businesses might find that grants from private organizations related to their industry are a better bet than state and federal options.
Truth is, the “easiest” grant to get will always vary depending on the nuances of your business. What your small business does, how it’s structured, and the unique qualifications you bring to the table all play a role. And the only way to find which grants align with your small business is to do the research.
Once you’ve identified a prime option, do everything in your power to secure it. If your business plan is impressive, your application is flawless, and your business has the potential to do great things, you will always have a fighting chance.
Your Resources for Small Business Grants
If you feel overwhelmed by the immensity of these grant possibilities or the intensity of the competition, reach out to a trusted mentor who can guide you to the best options. Seeking grants is like riding a bike: there’s a learning curve at the beginning, but after you’ve gotten a feel for it, you’ll be able to navigate new terrain with more confidence. And the payoff can be phenomenal.
If you don’t already have a business mentor, you should look to individuals in your network who have already navigated the small business grants process. You could also join industry networks and organizations as a way to meet more contacts.
Finally, you should consider connecting with the experts from your area’s Small Business Development Center or SCORE office. They often have resources to help you identify possible grants and submit a strong application.
By doing your due diligence and then enlisting the expertise of others in your industry, you’ll set the stage for a good experience as you seek small business loans. You obviously won’t be successful every time you apply—but you’ll be able to learn from