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Growing your own business can be difficult. After all, it takes a great deal of perseverance, time, effort—and money.
But how can you find funding opportunities? One way to take your company to the next level is through small business grants. These grant opportunities provide free money for startups and existing businesses, including businesses that have been negatively impacted by the COVID pandemic.
A business grant is defined as financial assistance given to a person, business, nonprofit, or corporation from federal, state, county, or local governments, or private businesses or corporations. In fact, numerous companies, nonprofits, and government agencies provide money to small business owners in the form of a small business grant. And the best part is that grants do not require repayment of any kind.
Below we provide the answers to some commonly asked questions:
What’s the best way to find small business grants?
Government agencies, state organizations, and private corporations offer these types of grants. Begin your search with grants.gov, a government database. Also check out your local Small Business Development Center and nonprofits, such as the Local Initiatives Support Corp.
What’s the qualification process for these grants?
Grant qualifications tend to vary depend on the organization. For example, some grants give priority to businesses in rural or low-income locations, and some prefer businesses owned by minorities, veterans, or women entrepreneurs.
What are the common types of small business grants?
There are several types of available grants. For example, the government offers federal grants, such as those provided by the U.S. Small Business Administration (SBA) and the National Institute of Health. In addition, private companies offer grants that are more general and open to wider types of businesses.
What types of federal small business grants are available?
One ofthe biggest distributors of business grants tends to be government agencies. These government grants provide great opportunities for small business owners who are looking to expand. For example:
Grants.gov is a comprehensive database of grants administered by various government agencies, such as the U.S. Department of Education and the Department of Veterans Affairs.
Small Business Innovation Research and Small Business Technology Transfer programs: The SBIR and STTR programs fund a diverse portfolio of startups and small businesses across technology areas and markets. The goal of the program is to stimulate technological innovation and meet federal research and development needs. SBIR and STTR fosters and encourages participation in innovation and entrepreneurship by all people, including women, people of color, people with disabilities, and entrepreneurs located in all 50 states and U.S. territories.
Only U.S. small businesses are eligible to participate in the SBIR/STTR programs. A small business must meet the eligibility requirements, which include the following:
–Organized for profit, with a place of business located in the United States
–More than 50 percent owned and controlled by one or more individuals, who are citizens or permanent resident aliens of the United States. Or by other small business concerns that are each more than 50 percent owned and controlled by one or more individuals who are citizens or permanent resident aliens of the United States
–No more than 500 employees, including affiliates
What types of state and regional small business grants are available? There is no question that these grants provide great opportunities for small business owners who are looking to expand. For example:
Economic Development Administration: As the only federal government agency focused exclusively on economic development, the U.S. Department of Commerce’s Economic Development Administration (EDA) plays a vital role in facilitating regional economic development efforts in communities across the nation. The EDA’s investment policy is designed to establish a foundation for sustainable job growth and the building of durable regional economies throughout the United States. This foundation builds upon two key economic drivers – innovation and regional collaboration.
Small Business Development Centers: SBDC programs deliver professional, high-quality, individualized business advising and technical assistance to existing small businesses and pre-venture entrepreneurs. SBDCs provide assistance programs to help small businesses access capital, as well as develop new technologies and improve business planning, strategy, operations, financial management, personnel administration, and marketing.
What types of corporate small business grants are available?
It is common for corporations and large companies to support businesses via small business grants. Some provide grants to nonprofit organizations servicing particular industries, and some offer grants to for-profit companies. For example:
FedEx Small Business Grant Contest: The FedEx Small Business Grant Contest is a grant program by FedEx to award 12 U.S.-based small businesses with grants up to $50,000 and up to $7,500 in FedEx Office print and business services. The prizes include:
–Grand Prize: One winner of $50,000 and $7,500 in FedEx Office print and business services
–2nd Place: One $30,000 winner and $5,000 in FedEx Office print and business services
–3rd Place: Ten $15,000 winners and $1,000 in FedEx Office print and business services
A selection committee within FedEx uses the following elements to choose winners:
–Clear, compelling and engaging essay answers/video in original contest entry
–Social presence to develop your brand voice, including use of visuals, cohesiveness, humor, engagement, uniqueness
–Website ease of navigation, ease of product ordering (if applicable)
–Uniqueness or innovative product or service offering
–Sustainability or environmentally friendly component
–Positive impact on community or community connections
–How well the entrant’s brand aligns with the FedEx brand
–Whether the small-business owner is prepared to be a small-business ambassador or mentor to other small businesses
–Review of social media sites including all posts and/or images
What’s the difference between a business grant and a loan?
Grants and small business loans differ in whether or not they require repayment. While loans require you to repay the money you borrow, a grant does not. Keep in mind that grants are taxable income, and the IRS considers business grants as income for tax purposes. Some business owners plan ahead and factor awarded grant money into their quarterly estimated payments, or they set aside extra funds in case a larger-than-expected bill arrives during the tax season.
While the business grant application process can take a lot of time to complete, small business grant programs are definitely worth the time and energy required in researching and applying. After all, receiving money you don’t have to pay back is a clear win-win for any growing new business.
Getting your business incorporated is one of the many steps you need to tackle before submitting your small business grant application. Inc Authority aims to provide assistance to business owners to set up their businesses for success. Form your FREE LLC today!