Looking to start or grow your business but feeling tight on cash flow? Small business grants may just be the extra stability you need.
When it comes to grants, there’s good news and less good news. The good news: there are billions of dollars set aside for qualifying businesses—and you don’t have to pay it back.
The less good news: many of these grants have strict requirements to determine who qualifies. And you may need to continue to meet more requirements after you receive the money.
In this article, we’ll look at several types of small business grants and how you may be able to secure them.
Key considerations to make when applying for small business grants
Because small business grants are not loans, they don’t usually require an assessment of creditworthiness. Issuers of grants also don’t expect to own assets in your business, since this type of funding is not classified as investment capital. That being said, they still expect a return on investment, albeit not in monetary form.
When looking for grants for your small business:
→ Click Here to Launch Your Online Business with Shopify
Search for grants within your industry
Most small business grants are industry specific, so it helps to focus on organizations and institutions connected to your sector. Focusing on one industry can also help you build connections with key figures who may be able to provide guidance and investment opportunities.
Read the eligibility criteria
As a small business owner, the last thing you want is to put a lot of effort into applying for a grant you’re ineligible for. Read the eligibility criteria carefully and evaluate whether you qualify. If you’re unsure about your eligibility, contact someone at the issuing organization and ask.
Know what you’ll spend the money on
Some organizations will stipulate what the grant money will be spent on, but even if they don’t, it’s still crucial to have an idea of how you will be using the funds. It’s also a good idea to create a business plan, so the grant issuer can understand more clearly how the money will be used to develop the startup.
Demonstrate a vision of growth in your pitch
When pitching your business as a potential grant recipient, highlight your envisioned path to growth. Focus on how you plan to scale, which technologies you might be interested in developing, and how you will help the organization achieve its mission.
Ensure your business aligns with the organization’s objectives
Most organizations offering small business grants will give you funding with the hope you’ll help them achieve a goal they care deeply about. Ask yourself how your business will contribute to achieving that objective. For instance, if you’re applying for a grant offered by a non-profit working to combat climate change, evaluate whether your business model can help to mitigate the effects of global warming.
Small business grants for 2022
SBA grants
The US Small Business Administration (SBA) is a government agency that offers support to small businesses. with the aim of fostering economic growth. The SBA offers a wide range of grants, loans, and other funding programs:
- The State Trade Expansion Program provides federal grants meant to assist US-based businesses in expanding globally, offering funds for cross-border trade shows and market expansion.
- The Women-Owned Small Business Federal Contracting Program offers grants specifically to women-run businesses, with the goal of empowering women entrepreneurs throughout the United States.
- The HUBZone program offers assistance to small enterprises with the aim of fueling growth in underutilized business zones.
- The SBA has a number of veteran assistance programs that offer funding for veteran-owned businesses.
Non-SBA government grants
- The National Institutes of Health offers various grant opportunities for small businesses conducting biomedical research related to COVID-19.
- The US Economic Development Administration (EDA) has a variety of grant programs for businesses that fuel regional economic growth, including funding for construction projects and technology development research.
- The Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs offer funding for small companies engaged in technological research, with the aim of endorsing high-tech innovation.
- The US Department of Agriculture (USDA) has multiple grant programs for agriculture or food service businesses.
- The US Department of Commerce Minority Business Development Agency (MBDA) offers a variety of support programs designed to fuel the growth and development of minority-owned businesses throughout the country.
Corporate small business grants
- FedEx offers a small business grant of up to $50,000 as a means of giving back to the community and helping to foster entrepreneurship.
- Walmart awards grants between $250 and $250,000 to local and national nonprofits that focus on communities, sustainability, or social opportunities.
- Outdoor clothing brand Patagonia provides funding to small businesses aiming to confront environmental injustice and address the root causes of climate change.
- The National Association for the Self-Employed (NASE) provides growth grants of up to $4,000 to small businesses that exhibit significant growth potential.
Grants for women-owned businesses
- The Amber Grant Foundation gives away $1,000 each month and another $10,000 each year to women entrepreneurs.
- The Women Who Tech Grants Program offers funding for women-owned tech and health startups, with the aim of reducing the gender gap in the technology industry.
- The Cartier Women’s Initiative Regional Awards program offers annual grants to female-run companies dedicated to meeting one of the 17 UN Sustainable Development Goals.
Grants for BIPOC-owned businesses
- Go.Be. is a non-profit organization that provides funding of up to $4,000 to eligible BIPOC-owned businesses.
- The Black Founder Startup Grant (offered by the SolGal Foundation) offers $5,000 and $10,000 cash grants to black nonbinary and black women entrepreneurs.
- AnnuityFreedom.net offers recurring grants each month as part of its BIPOC Small Business Grant program, which was created in response to the COVID-19 pandemic.
- Backstage Capital is an investment fund set up to provide funding to small businesses owned by people of color, women, and LGBT entrepreneurs.
How to apply for a small business grant
Applying for a grant can be a time-consuming process. Make sure you set aside plenty of time to read through the eligibility requirements listed by the organization providing your funding. You may need to include specific information with your application, such as business plans or projections.
Before applying for a grant issued by a government, make sure you’re registered either as an individual (sole trader) or an organization. Registering a business can take up to three weeks, so you’ll need to ensure you apply long before the grant application submission deadline is due.
Once you’re officially registered, follow the instructions provided by the grant provider you’re interested in. Most of the time, you’ll need to communicate an idea, write a proposal, and answer any questions issued by the grant provider.
Your grant proposal will often form the main part of your application. This document features:
- A summary (what you want to accomplish)
- An introduction to your business and what it does
- A needs assessment (what you need to accomplish your goals)
- An outline of business objectives
- Your plan of action
- Evaluation and future funding plans
- Financial data (cash flow and projected profit)
There’s no one-size-fits-all strategy for writing a grant application guaranteed to succeed, but there are some tips that can improve your chances of a positive outcome, such as:
- Make your vision realistic. While ambitious goals are great, your grant provider should be able to clearly see how you’re realistically going to accomplish your goals with the money available.
- Be organized. Follow a logical flow with your application, introducing your business, your ideas, and how you’re going to benefit the organization in an easy-to-follow structure.
- Write clearly. Use concise and simple language. Avoid any jargon that may confuse the issuer.
- Be persuasive. Sell your idea with emotional language and a focus on the clear benefits you can offer. Make the value of your proposal easy to understand.
- Edit and proofread. Take the time to proofread your content. Get a second pair of eyes to look for mistakes you might miss and polish the document to perfection.
Remember, after you submit your application, you may be contacted by the grant organization and asked additional questions. Be prepared for interviews about how you’re going to spend the money and what your goals are. Also, ensure you have all the essential documents to support your application, such as business plan documents and bank statements.
Grant yourself some peace of mind with small business grants
Whether you’re taking your first steps into entrepreneurship, trying to grow your existing business, or trying to recover from losses, small business grants can be a life saver.
Before you dive in, make sure to do your research. Take a close look at:
- Which types of grants you might qualify for
- All the steps you should take to submit your application
- Any requirements you may need to meet after you accept the grant
You may be surprised to learn what’s available to you!
Small business grants FAQ
What are the benefits of small business grants?
Grants provide several advantages to a small business. One of the biggest advantages is that they don’t have to be repaid. You also aren’t required to pledge any assets, like in the case of a traditional loan, making grants very appealing as a financing option for your business.
How do I apply for a small business grant?
Each grant will list the steps for applying. You’ll need to communicate your business idea, explain how you plan to use the grant funds, and provide relevant documents (business plan, financial statements, etc.). In general, grant-issuing organizations are interested in companies that have the potential to expand and help achieve the organization’s objectives.
Can I get free money to start my own business?
Yes, there are many small business grants issued by federal agencies and governments, though not every business can apply. For more information on government grants available in your country, check out the following links:
