For most founders, securing startup funding is often one of the most difficult hurdles to overcome.
It can often be difficult to obtain the documentation required for a business loan, and in many cases, owing someone money or handing over company shares isn’t particularly tempting!
This is where small business grants come into play!
In this article, I’ll walk you through the funding programs you should benefit from this year and help you get the funding you need, no strings attached.
Do you have little time? Here are the key takeaways
- Small business grants can be a great way to put more money into your business without giving away any of your property.
- Grants are available and can be industry-specific or targeted at specific demographic groups, such as women-owned or underrepresented businesses.
- There are a variety of grants available to certain small businesses, but you need a solid and compelling business plan to access them.
What is a Small Business Grant?
First, let me briefly explain when I’m talking about 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 usually come with specific eligibility criteria and specific purposes, which I will discuss in more detail later in this article.
For a comprehensive guide to bootstrapping versus external funding, click here: Check out our current article!
The Benefits of Small Business Grants
A successful funding application offers small businesses numerous advantages. Grants, in particular, provide financing that does not have to be repaid, reducing the financial burden in early growth phases.
In addition, you retain full control over your company as no equity participation is taken. However, providing a grant also comes with some less obvious benefits, such as the credibility and visibility it can provide your brand.
Providing a grant often signals that an outside party believes in your company, which can increase credibility with investors and customers.
Small Business Grants
With that in mind, let’s take a look at some of the most common grants that small businesses can take advantage of.
Federal grants
Federal agencies could be a good place to start your search! Federal funding programs like Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) are excellent options for any startup that has created a technology-focused business.
The added benefit of these grants is that they not only provide funding but also help you validate your technology or service.
Government grants
While federal grants can be of great benefit to certain companies, they are difficult for most companies to obtain, especially those that do not focus on technology.
Government grants could be a solution to this problem, as many local governments offer unique grant programs to encourage entrepreneurship and economic development in their region.
These grants are also usually aimed at specific industries, depending on their specific needs. However, it is always worth contacting the small business administration to find out what offers are available.
Company Sponsored Grants
As a small business owner, it can sometimes be difficult to compete with the larger companies in your industry. However, large companies tend to occasionally give you a leg up by running funding competitions to encourage innovation in sectors they care about.
These can be technology-based, but can also apply to a variety of industries, such as companies that support community services.
Grants from foundations and non-profit organizations
For nonprofits, there are specific grants you can take advantage of, such as the Ewing Marion Kauffman Foundation or local economic development nonprofits. Nonprofits often rely on these grants to stay afloat, and so there are likely many options for you to explore in your area.
Grants for women-owned businesses
There are also numerous financing options available for anyone starting a women-owned small business. Numerous programs focus specifically on promoting women’s participation in business.
Eligible companies must demonstrate that they are run by women. However, with more and more loans and grants available for small businesses, it’s worth considering this route.
Underrepresented startup grants
Minority- and veteran-owned grants are also available for eligible small businesses. Often these scholarships not only provide financial resources, but also mentoring and networking opportunities.
Promoting innovation
If you’re disrupting an industry with a potentially game-changing technology, you may be eligible for grants to cover research and development costs, which can be game-changing.
These opportunities help reduce the financial risk of innovation without incurring debt or equity dilution and allow you to truly test your thesis, prototype products, and bring them to market.
How to get a grant for your business ventures
Finally, let’s talk about how to go about inquiring about potential grants, as the paths are slightly different for nonprofits and for-profits.
The best place to start your search is good old Google! Search for “government grants for small businesses” and you can see specifically what’s available in your area. As I mentioned before, unless you’re interested in federal contracts, local areas tend to award grants based on different criteria.
However, since local or state government is not your only option, you should also try to identify private companies and foundations that support entrepreneurial ventures.
For women entrepreneurs, minority businesses or industry-specific initiatives, these grants are not always clearly advertised. So don’t be afraid to reach out to someone you think can help you.
Once you have discovered a potential funding opportunity, it is important to take the time to familiarize yourself with the requirements.
Each grant has specific requirements. Therefore, make sure your company meets the requirements before investing time in the application.
Determine whether the grant is for research and development, expansion, marketing, project costs, or another specific area. Tailor your proposal to show how the funds will achieve these goals.
If you think you meet the criteria in question, it’s time to write your pitch! After all, you can’t expect a company to give you money just because you asked for it.
Include clear goals, detailed financial projections, and measurable results in your plan. Proof of a well-thought-out strategy gives funding agencies certainty about the profitability of your business and significantly increases your chances of a successful application.
Final thoughts
Small grants can provide decisive impetus, but are only one part of the entrepreneurial puzzle. To build a thriving business, you need comprehensive advice covering everything from branding and design to e-commerce and marketing.
This is where Foundr+ comes into play. For just $1, get instant access to 30+ expert-led courses and 1,000+ lessons to guide you through every aspect of starting and growing your business.
Whether you’re learning how to get grants, perfecting your brand identity, or mastering digital marketing strategies, Foundr+ equips you with the tools, insights, and community support you need to succeed.
