How To Get A Government Grant For Your Small Business
Did you know that you may be able to get free or heavily subsidized money from a state or the federal government to help fund your dream business? Government grants and subsidized loans are two important tools that entrepreneurs can take advantage of when trying to start a business.
However, you should know from the outset that finding grants or loans for your start-up business is not easy. In addition to the intense competition from other entrepreneurs, there is a lot of homework to do and a significant amount of red tape to maneuver around. Read on to find out where to look to secure a government grant or subsidized loan for your small business.
If you are looking for some funding to help get your small business off the ground, your first stop should be the U.S. Small Business Administration (SBA). Here you'll find online tools that can help you to find potential loans and grants for your small business.
Grants are among the most favored sources of small business funding. This is primary because grants do not typically have to be paid back. However, you should note that many grants come with specific requirements and conditions that must be met in order to receive the full funding.
Small Business Innovation Grants
According to the SBA, federal grants are typically only available to non-profit organizations, governmental groups and large businesses that are doing research in partnership with the government.
However, if you own a small business focused on scientific research and development, you should look into the federal government's Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs.
According to SBA's website: "SBIR/STTR programs encourage small firms to undertake scientific research that helps meet federal R&D objectives, and have high potential for commercialization if successful."
The SBIR/STTR website includes a search tool for open and future solicitations for various research projects. If you think that you might qualify for either program, go to the SBIR/STTR website for more information.
Catalog of Federal Domestic Assistance
Another stop on your research tour of funding opportunities should be the Catalog of Federal Domestic Assistance, which has an easy-to-search database of more than 2,000 federal assistance programs. Most of these programs grant money to state or local governments or large organizations. However, you should periodically check the catalogue for small business grant opportunities.
Grants.gov is another online grant research tool created by the federal government to match up organizations with funding sources. You can search the database based on eligibility or keyword.
State Grant Funding
Unlike the grant pool for federal funding, the state funding pools are a little friendlier to small businesses. The downside is that there is no central state grant database so it is harder to search for funding opportunities. A good place to start is your state government’s website. Browse around for information on state grants for business owners.
You should note that state and local governments often earmark grants for specific types of businesses. For example, if you are interested in the following business activities, you might be able to secure a state or local grant:
- Expanding A Child Care Center: This website includes links to a variety of grant resources related to child care.
- Creating Energy Efficient Technology: Visit this website for a round-up of state and local programs related to energy efficiency. The U.S. Department of Energy has additional opportunities for small businesses involved in creating energy efficient technology.
- Developing Marketing Campaigns For Tourism: Check your state's website to see if funding is available for this type of activity.
The SBA notes that "these state grants are not necessarily free money, and usually require the grant recipient to match funds or combine the grant with other forms of financing such as a loan. The amount of the grant money available varies with each business and each grantor."
Subsidized loans are another helpful tool to fund your small business. According to the SBA, the federal government as well as state and local governments provide "loan guaranty programs that make it easier for small businesses to obtain start-up and expansion loans from commercial lenders."
Advantage Loan Initiatives
The Small Loan Advantage and Community Advantage Initiatives are loan programs that lend up to $250,000 to entrepreneurs and small businesses in underserved communities. The application process has been streamlined to make it easier to apply for loans under these two programs.
The government's Microloan Program "provides small, short-term loans to small businesses and certain types of not-for-profit child-care centers," according to the SBA. The maximum loan amount available for these loans is $50,000.
In addition to providing information about grant and loan opportunities, the SBA website also provides links to venture capital organizations that can provide start-up businesses with capital. Entrepreneurs who are unsuccessful securing a government grant or loan should consider looking into venture capital funding.
The bottom line is that government funding for your small business is available. However, you will need to put in the work in order to secure a grant or subsidized loan. Make sure to exhaust all of your options when searching for funding for your business. This will help to get your business started on the best possible track to success.