For most founders, securing funding to get started is often one of the most difficult hurdles to overcome.
Often, it can be hard to get the credentials required for a business loan, and in many cases, owing someone money or handing over business equity is not very appealing!
That’s where grants for small businesses come into play!
In this article, I’ll take you through the grant programs you should be capitalizing on this year, helping you get the funding you need without the strings attached.
Short on time? Here are the key takeaways
- Small business grants can be an excellent way to get more cash into your business without giving away any of your ownership.
- Grants are available and can be industry-specific or targeted toward particular demographics, such as women-owned or underrepresented businesses.
- There are a wide variety of grants available to certain small businesses, but you will need a robust and enticing business plan to access them.
What is a Small Business Grant?
First off, let me quickly explain when I refer to a small business grant, as there is often a little confusion between the difference between a loan and a grant.
A small business grant is a form of funding provided by government agencies, private foundations, or corporations to support the growth and development of small businesses.
Unlike loans, grants do not require repayment and typically come with specific eligibility criteria and designated purposes, both of which I will discuss in greater detail later in this article.
For a comprehensive guide to bootstrapping vs. external funding, check out our recent article!
The benefits of small business grants
There are a ton of benefits that small businesses can get from a successful grant application. Most notably, grants provide funding that doesn’t have to be repaid, reducing financial stress during early growth phases.
Not only that but you can also maintain the full control of your business, as no equity stake is taken. However, there are also some less obvious benefits to securing a grant, such as the credibility and visibility it can offer your brand.
Securing a grant often signals that an external party believes in your business, which can boost credibility with investors and customers.
Grants for Small Businesses
With that in mind, let’s take a look at some of the most common grants that small businesses can attempt to take advantage of.
Federal grants
Federal agencies could be handy places to start your search! Federal grant programs like the Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) are excellent options for any startup that has launched a tech-focused company.
The added benefit of these grants is that they don’t just offer funding, but they also help you validate your technology or service.
State grants
However, while federal grants can be very beneficial for certain businesses, they are tricky to acquire for most businesses, especially for those not focused on technology.
State grants could be a solution to that issue, as many local governments offer unique grant programs to promote entrepreneurship and economic development in their area.
These grants also tend to target specific industries based on their needs at that time, but it’s always worth reaching out to their small business administration to see what may be on offer.
Corporate-sponsored grants
As a small business owner, it can sometimes feel hard to compete with the larger companies in your industry. However, large companies tend to help give you a leg up occasionally, running grant competitions to foster innovation in sectors they care about.
These may be technology-based, but they can also be for a wide range of industries, such as businesses that support community services.
Foundation and nonprofit grants
For nonprofit organizations, there are specific grants you can go after, such as the Ewing Marion Kauffman Foundation or local economic development nonprofits. These grants are often relied on by nonprofits to stay afloat, and as such, there are likely plenty of options to look into in your area.
Women-owned business grants
There are also plenty of funding opportunities in place for anyone who starts a women-owned small business, with numerous programs focusing specifically on promoting women’s business ownership.
Eligible businesses will need to prove their ownership is women-led, but with more small business loans and grants becoming available, it’s an avenue worth looking down.
Underrepresented founder grants
For eligible small businesses, there are also minority and veteran-owned grants to consider. Often, these grants don’t just offer funding, but also mentorship and networking opportunities.
Innovation funding
If you’re shaking up an industry with a potentially ground-breaking technology, you may be eligible for grants that cover research and development expenses, which can be a game changer.
These opportunities help reduce the financial risk of innovation without taking on debt or equity dilution, allowing you to truly test your thesis, create product prototypes, and get them to market.
How to Get a Grant For Your Business Ventures
Lastly, let’s talk about how you go about enquiring about potential grants, as the routes for nonprofit organizations and for-profit businesses differ slightly.
The best place to start your search is with good ol’ Google! Search for ‘government grants for small businesses,’ and you’ll be able to see specifically what is on offer in your area. As I mentioned earlier, local areas tend to provide grants with different criteria unless you’re interested in federal contracts.
However, as the local or federal government isn’t your only option, you should also attempt to identify private companies and foundations that support entrepreneurial ventures.
For women entrepreneurs, minority-owned ventures, or industry-specific initiatives, these grants aren’t always clearly advertised, so don’t be afraid to reach out to someone you think may be able to help.
When you have uncovered a potential grant opportunity, it’s important to spend time learning the requirements.
Each grant comes with specific requirements, so make sure your business qualifies before investing time in the application.
Determine if the grant is intended for research and development, expansion, marketing, project costs, or another specific area. Tailor your application to show how the funds will meet these goals.
If you think you meet the criteria in question, then it’s time to craft your pitch! After all, you can’t expect an entity to just give you money because you asked for it.
Within your plan, include clear objectives, detailed financial projections, and measurable outcomes. Demonstrating a well-thought-out strategy reassures grantors of your business’s viability and dramatically improves your chances of a successful application.
Final Thoughts
Small grants can provide a vital boost, but they’re only one piece of the entrepreneurial puzzle. To build a thriving business, you need comprehensive guidance that covers everything from branding and design to eCommerce and marketing.
That’s where Foundr+ comes in. For just $1, you’ll get instant access to 30+ expert-led courses and over 1,000 lessons designed to guide you through every aspect of setting up and growing your business.
Whether you’re learning how to secure grants, perfect your brand identity or master digital marketing strategies, Foundr+ equips you with the tools, insights, and community support you need to succeed.
