July 21, 2021 By SmartBiz Team

Have you explored applying for grants to help fund your small business? Grants are non-repayable funds given by one party, often a government department, corporation, foundation or trust, to a recipient, often a nonprofit entity, educational institution, business, or an individual.

Use our guide to help you find a grant that can help you build your business.

Apply for an SBA Loan

What Is a Business Grant?

A grant is essentially a loan that you don’t have to repay. As with a loan, you’ll have to fill out an application, but you won’t apply with a bank or private lender. You’ll instead apply with a foundation, a company that doesn’t offer loans, or a government branch. These entities often offer grants reserved for a specific purpose or type of small business owner, i.e. grants solely for women or Black entrepreneurs. If you’re approved, the money is yours to keep as a free gift.

What Are the Benefits of Small Business Grants?

The most obvious benefit of small business grants is that you don’t have to repay them. They’re also quite easy to find information on, whereas some private lenders make an art of hiding information to lure you into bad deals. In some cases, such as the grants for women or Black entrepreneurs mentioned above, beating the (often heavy) competition for a grant can go on your resume. It can also become one of your talking points with clients.

Speaking of competition: Since grants require no repayment, they’re widely pursued, so your chances of earning them can be slim. Grant funders typically choose their recipients painstakingly to ensure they’re spending their money well, so grant applications are often detailed and time-consuming. However, addressing the competition and taking the time to complete an application is usually worth it for the free funding.

How to Apply for a Small Business Grant

Here are insider tips to help you have a smooth grant application process from start to finish:

1. Get Familiar with the Process

Applying for a small business grant is a lengthy and involved process. Be sure you understand what the grant givers are looking for and be able to present your business in the best light. If you receive funds, be prepared to provide detailed reports on how the money was used.

2. Determine Your Eligibility

Do your homework to make sure you are eligible for the grant before you apply. For federal grants, there are specific qualifications like operating as a nonprofit entity , educational institution, or a cutting-edge technologies business.

3. Gather Documents

Writing a grant proposal is not easy. You’ll need to gather a lot of required information and present it in an easily understandable way. Some paperwork you might need to produce includes:

  • An explanation of the need you seek to fulfill
  • Your solution for solving the problem
  • How you’ll track the impact your organization makes as a result of the funding
  • A detailed budget and how funds will be allocated
  • Additional documentation like tax details, certifications, or personnel qualifications

4. Submit on Time

Keep an eye on the due date and make sure you have everything ready to go. This may seem like a no-brainer, but if you wait until the last minute, you might need information that takes time to gather.

We’ve compiled a list of grants specifically for small business owners. Some are for targeted audiences like veterans or women, others require a specific type of business.

Tips for Applying For Small Business Grants

When applying for small business financial help, keep the following tips in mind:

  • Know how you’ll use your money . Most small business grant programs require applicants to present a clear idea of how they plan to spend the proceeds. To develop this vision, you should speak with your team, your customers, and small business experts to determine your immediate goals. These could include launching a new service or buying important programs to help streamline your operations.
  • Don’t go it alone . Small business financial assistance often requires so much paperwork that you might accidentally miss things. The chances that you’ll exclude important information become much lower when you have someone else looking through your application. Other small business owners who have applied for grants (especially the one you’re currently seeking) make great comrades here, as do your employees.
  • Make your ideas clear . Another reason to seek help from others: Third parties can point out where you’re being unclear and advise you on how to make your point. If your grant application is writing-intensive, this need is especially important. Don’t let muddled language get in the way of your small business financing – have others in your court to help you explain why your grant money will make a difference.

Federal Small Business Grants

Grants.gov bills itself as the most convenient way to search for federal grants. In addition to their website, an app is available for download. Examples of US federal grant programs include those that support justice and law enforcement, social services and health research, and research in science and technology. Below are popular options to explore.

  • The Small Business Innovation Research (SBIR) Program

The SBIR program is a program that encourages domestic small businesses to engage in research and development that has the potential for commercialization. Through a competitive awards-based program, SBIR enables small businesses to explore their technological potential and provides the incentive to profit from its commercialization.

  • SBA Grants

There are specific requirements for recipients of an SBA grant. Make sure you can meet the legal and administrative prerequisites before you apply. The full terms and conditions for SBA grant programs is available on sba.gov.

  • Cooperative Agreements

“Cooperative Agreements” are also available to help fund a small business. These agreements are legal instruments facilitating the transfer of something of value from federal executive agencies to states, local governments, and private recipients for a public purpose or benefit. For more information about how cooperative agreements work, visit the grants.gov blog here.

  • Challenge.gov

Launched in 2010, Challenge.gov allows federal agencies to crowdsource ideas from the public and solve problems with thinkers and doers from any field of expertise. The U.S. government has run nearly 1,000 challenges and offered well over $250 million in cash prizes for the best ideas. These challenges have been won by everyone from students and hobbyists to small business owners and academic researchers.

State/Regional Small Business Grants

  • Economic Development Administration (EDA)

The EDA is a U.S. Department of Commerce agency that offers grants, resources, and technical assistance to encourage entrepreneurship and innovation. Search here for your state’s agency —each one helps local small businesses find financing, secure office space, and recruit employees.

  • Small Business Development Centers (SBDCs)

Local SBDC offices provide support for small business owners and aspiring entrepreneurs throughout the U.S. Often associated with the state’s economic development agency, an SBDC can help connect you with grants, financing, networking opportunities, and business mentors. Use this portal to find the nearest SBDC to you.

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Corporate Small Business Grants

  • FedEx Small Business Grant

FedEx awards up to $25,000 apiece to 10 small businesses annually. In 2017, the contest provided a total prize pool of $120,500. Winners also receive money to use toward FedEx Office print and business services.

The application requires an explanation of your business, how you’d use the money, photos of your business and — this part is optional — a short video explaining your business. To be eligible, you must operate a for-profit business with fewer than 99 employees and at least six months of operating history.

  • The Coca-Cola Foundation

This Foundation was established in the U.S. as a registered 501(c)(3) charitable organization. Foundation grants are awarded throughout the year based on approval by the Foundation's Board of Directors. All requests for grants or sponsorships must be submitted through an online application system.

  • NAV Business Grant Contest

Founded in 2012, Nav is a way for business owners to manage their business credit and get streamlined access to financing. Chosen businesses will be granted $10,000 to take their venture to the next level. In 2019, entries are due between May 23rd and August 15th. Learn more here.

Small Business Grants for Women-Owned Businesses

  • Girlboss Foundation

Launched in 2014, the Girlboss Foundation has awarded over $130,000 in financial grants to female entrepreneurs. Grants are awarded on a biannual basis and each beneficiary receives project funding for $15,000. In addition to the funds, recipients receive exposure through the Girlboss platform and community, as well as coverage in local and regional media.

  • Women’s Business Centers

The SBA sponsors about 100 Women’s Business Centers across the US. The centers were founded to help women entrepreneurs with business development and access to capital. Some help you find small-business grants and loans that you may qualify for.

  • Amber Grant Foundation

This foundation awards $2,000 to a different women-owned business every month. At the end of each year, one of the 12 grant winners is awarded an additional $25,000. The foundation’s advisory board chooses the winners, looking for women with passion and a good story. Businesses operating in the U.S. and Canada are eligible. Learn more here.

  • Eileen Fisher Women-Owned Business Grant

Eileen Fisher, a women’s clothing retailer, awards a total of $100,000 to up to 10 women business owners each year. To be eligible, women must make up at least 51% of ownership and leadership, have been in operation for at least three years, earn less than $1 million in annual revenue, and be focused on environmental or social change.

  • The Cartier Women's Initiative

This annual international business competition was created in 2006 to identify, support, and encourage projects by women entrepreneurs. In less than a decade, the Cartier Awards has grown from attracting 360 to nearly 3,000 applications. The 7 laureates (1 from each region) will receive $100 000 in prize money and the 14 finalists (the two runners-up from each region) will receive $30,000 in prize money. Learn more here.

Small Business Grants for Minorities

  • Minority Business Development Agency

This development agency of the U.S. Department of Commerce promotes the growth of minority-run small businesses by connecting owners to financing resources, federal contracts, and market opportunities. You can contact a local MBDA business center for more information.

  • National Minority Supplier Development Council

The council is a corporate member organization focused on increasing business opportunities for certified minority-owned businesses. It operates the Business Consortium Fund, a nonprofit business development program, which offers financing programs and business advisory services for its members.

Small Business Grants for Veterans

  • Street Shares Foundation

StreetShares Foundation was established with veteran small-business owners in mind. They offer grants in addition to lines of credit, term loans, and government-contract financing. This year, they awarded $15,000 after an application period to a veteran-owned small business. Visit the site here to read their mission statement and learn more.

  • Hivers and Strivers

Hivers and Strivers is an angel fund looking to assist military academy graduates with their startups. Their investments range from $250,000 to $1 million per round, and they may syndicate with other groups for larger investments. If you’re a graduate of one of the military academies and have a small business idea, you can make your submission on their website.

  • Veterans Administration

Designed for non-profit businesses, Department of Veterans Affairs Small Business Grants help veterans get their operations up and running and require strict compliance. Visit the website here to learn about grants and other support services available for veterans.

COVID-19 relief, grants, and loans

  • Paycheck Protection Program (PPP) loans . The SBA’s PPP loan program provides small business loans that allow companies to continue paying their employees during the COVID-19 pandemic. The first round of PPP applications began in 2020 shortly after the federal government passed the CARES Act, and the second round began in early 2021.
  • Economic Injury Disaster Loan (EIDL) . These loans provide small business relief to companies located in low-income regions. Qualifying companies must also have lost at least 30% during the first two months of the coronavirus pandemic. Learn more via the SmartBiz Loans blog: PPP vs. EIDL vs. 7(a) Loan: Which Is Best for Your Small Business?
  • Shuttered Venue Operators Grant (SVOG) . The SVOG program is intended for live venues that were in operation as of February 29, 2020. The SBA’s Office of Disaster Assistance has set aside over $16 billion for this program, which launched in 2021. Grants may cover up to 45% of an applicant’s gross earned revenue, with a maximum of $10 billion.

Other Options to Fund a Small Business

If your attempts to secure a grant are unsuccessful, you’re not out of options. There are low-cost ways to fund a small business. One of the best ways is with an SBA loan. SBA loans are known as the “gold standard” in small business funding to fuel expansion and savings.

Unlike grants, Small Business Administration loans require payback. However, if you can qualify, SBA loans have some of the lowest rates and longest payback terms around. That means monthly payments are low and won’t crunch your cash flow.

There are three types of SBA loan programs available for business owners: The 7(a) Loan Program, the CDC/504 Loan Program and the Microloan Program.

The 7(a) Loan Program

An SBA 7(a) loan can be used for a variety of purposes.

  • Working Capital – Purchase equipment, increase inventory, add marketing programs, for operating expenses to hire additional staff.
  • Debt Consolidation Loans – Refinance merchant cash advances, short-term business loans, high interest business loans, daily or weekly payment loans or business credit cards.
  • Commercial Real Estate – Refinance an existing commercial real estate mortgage, buy an office building or other owner-occupied commercial space.

For in-depth information about the popular SBA 7(a) loan program, visit the SmartBiz Small Business blog and review our comprehensive article: What is an SBA Loan?

The 504 Loan Program

This program was created to give small businesses low cost funds for expansion or modernization. Typically, up to 50% of project costs are funded by a lender backed by the SBA. CDCs (Community Development Corporations) usually fund up to 40% of the project cost. The final 10% is a cash down payment expected to come from the small business owner.

A 504 SBA loan might be a good fit for small business owners interested in purchasing a commercial real estate property and if their unique business circumstances fit with the public policy goals of your local CDC. Find a CDC here.

The Microloan Program

The Microloan Program is for very small businesses, including start-ups and provides loans of up to $50,000. Requirements to qualify for a microloan can vary depending on the lender. Proceeds from an SBA Microloan can be used for most business expenses but not for paying down debt or real estate purchases.

Tips on How to Use Your Small Business Funding

If you do successfully obtain small business funding, consider using it for the following business purposes:

  • Buy more software . Although software doesn’t take up office space, it can take up a significant amount of your budget. With the proceeds from whatever small business financial help you receive, you can more easily afford new software such as project management platforms, accounting systems, and other tools from this SmartBiz Loans list: 31 Small Business Management Tools To Help Run Your Business.
  • Upgrade your equipment . Ensuring your equipment is up-to-date goes hand in hand with buying more software. New laptops, production tools, and other equipment aren’t just nice gifts for your company – they prevent workflow breakdowns that cost more money than you’ll spend on upgrades in the first place.
  • Pay off your debts . Launching a small business often means taking on debt. Your small business financial help can go toward repaying these debts, and with less debt, you might just improve your credit score enough to obtain more loans. SBA loans in particular are great choices for consolidating your debts and making your financial management that much easier.

For more information about SBA loans, visit the SmartBiz Loans website. Note that you must be in business for 2+ years and have good credit. You can find a list of additional requirements here.

Not sure how an SBA loan could help your business? Read about real SmartBiz Loans customers on our blog. You’ll learn how our customers are paying off high interest debt, buying inventory, hiring additional workers, and using funds for more business building initiatives.

Find our business stories here: Customer Success Stories. From a chicken wing restaurant to a skateboard manufacturer to a high-end lighting design firm, you’ll meet entrepreneurs who are growing and saving money with an SBA loan.

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