Could your small business use more capital to launch a new product or add services?
It may be time to explore your options for grants.
Some federal, state and local government agencies—and some non-profits—offer grant money to businesses. Your business may qualify if it’s woman- or minority-owned, veteran-owned, or meets other criteria.
Here’s a rundown of where to find grant listings, how to apply, and what to expect if your business wins a grant.
Where to Find Small Business Grants
Grants are one of those things that can seem invisible until you start looking, and then you see them everywhere. Here are several online portals you can use to kickstart your grant search.
1. US Small Business Administration
The Grants section of the US Small Business Administration (SBA) website has information about SBA funding programs for small business and what’s required to apply. The SBA runs or partners on more than a dozen small business grant and support programs, including several training and financial support grants for veteran-owned small businesses.
The SBA Grants section also find information on state-run STEP awards for small businesses that want to begin exporting goods to other countries or expand their existing export business. If your business does R&D in science and technology, you can find details about two federal grant programs—Small Business Technology Transfer and Small Business Innovation Research.
Ready to take on a challenge for a chance to win a financial reward?
Challenge.gov offers federal agency-sponsored prizes to businesses and entrepreneurs who help the government solve all kinds of problems. Lithium-ion battery recycling, film production, septic sensor technology, and management consulting are current prize topics. Awards range from a few thousand dollars to more than $1 million.
Another federal site, Grants.gov, has a searchable database. As of this writing, there are more than 1,000 grants for small businesses listed on the site.
The vast majority are for small businesses engaged in health and other scientific research. There are also programs to help small farmers set up renewable energy systems, leadership training for small businesses that serve the law enforcement and criminal justice sectors, and more. Be prepared to spend some time drilling into the fine print and links on this site.
GrantWatch.com is a subscription service that collects information on grant programs in each US state and territory plus Canada, Israel, and other countries. You’ll need a subscription to search by keyword, but the site’s free search tools let you scan by location and category.
For example, grant options in Texas right now include funding for small businesses that run after-school programs, install broadband, offer telemedicine in rural areas, recycle plastics, and build assistive technology for people with disabilities, to name a few.
And of course, Google is your friend when it comes to finding grants that fit your business profile and niche—especially for grants offered by corporations and non-profit groups. Here are a few of the best-known:
5. National Association for the Self-Employed
National Association for the Self-Employed members can apply for grants of up to $4,000 to invest in equipment, upgrade their web presence and marketing, or another use that helps the business grow.
These grants are aimed at “microbusinesses.” Past recipients include an art glass studio, a t-shirt printing company, and a vegan pastry shop.
6. FedEx Small Business Grant
The annual FedEx Small Business Grant Contest contest draws thousands of applicants and awards ten prizes, ranging from a $50,000 grand prize to $15,000 bronze prizes, plus FedEx services for winners. If your business has a great story to tell and enthusiastic fans, go for it, because customer and fan votes help decide the winners.
What types of businesses win? This year, a toy manufacturer, a maker of heatstroke prevention devices, a wedding flower rental business, and an artisanal cheese businesses made the list.
7. The Amber Grant
The Amber Grant from WomensNet is a two-stage program for women-owned small businesses. Each month, the program judges award one business a $2,000 grant. At the end of each year, one of those grant winners receives another $25,000. The application process is easy and less complex than government grants. There is a small fee to apply for an Amber Grant.
What Happens When Your Small Business Gets a Grant?
You celebrate! Then, you make your grant award part of your marketing, because it’s impressive social proof—judges who hand out money think your business idea is great.
Next, you set up a system to comply with your grant’s rules. Some grants will simply give you a cash award.
Others—especially government-funded programs that must show proof that their money is used properly—have rules about how you can spend the funds, recordkeeping for grant-funded purchases, progress reports, and results. There may also be deadlines for using the money or achieving certain results. And there may be penalties for grant recipients who don’t stick to those rules. So make sure you’re prepared to comply with the program’s rules before you apply.
Finally, talk to your CPA. Grants are usually taxable income, so you want to make sure you set aside some of the money for tax time.
How to Apply for a Small Business Grant
After you find a grant program that fits your type of business, find the application deadline and make sure you can meet it. (If you find a great program but the deadline is past, see if the grant will be offered again later, so you can start planning for next time.)
The application process itself varies by grant. Applying for an Amber Grant is as simple as filling out an online form, while government-sponsored grants can have complex application processes. For example, the USDA’s grant for rural expansion of broadband requires documented proof of the area to be served, costs, licenses and access to service areas, and more.
If you’re looking at a complex application, don’t guess. Most grants include phone numbers and email addresses for staffers who can answer your questions and help you get through the process.
Before you send in your application, make sure your company website and social media accounts are up to date. Judges and voters will want to see what your business does and what your goals are, so make it easy for them to verify that information. And finally, proofread your application and double-check that you have all the required information before you submit it.
Has your small business ever won a grant? Tell us about it in the comments.