Small business grants
Grants are a great funding option for some small businesses. They can be a lot of work to apply for but if you get free money at the end, putting the time in could be worth it.
What is a small business grant?
A grant is money that’s given to your business by government, a company or a philanthropist. Grants are essentially free money – you don’t have to pay them back. Their aim is to give small businesses a helping hand. They’re often targeted at job creation, projects that traditional lenders don’t support, and on increasing economic benefits for communities.
Who gets them?
Competition for grants is high – everybody wants free financing. You’ll see a lot of them are for non-profits, but keep looking, there are plenty for businesses too.
Small business grants tend to be aimed at certain regions or sectors, specific types of businesses or causes, or particular community groups.
How big are grants?
Grants can go from as small as a few hundred dollars to as large as hundreds of thousands. Most, however, are less than 10K. For that reason, they’re often a supplement to other types of small business funding.
How do you find them?
Grants can come from every level of government, philanthropists, or companies.
Here's where to check:
Government websites – central and local government. They should have a list of their grants and links to other sources like non-profits, foundations and corporations.
Small business and industry associations. They may have their own grants or information about grants their members have had success with.
Your accountant or bookkeeper. They may have other clients who’ve been successful getting grants.
Are there startup business grants?
There are grants for startups but they’re not going to fund your whole business. They might cover the costs of getting professional advice to create a business or financial plan, specific training, or investment in equipment. They’re aimed at getting your foot on the ladder – it’s still up to you to climb it.
Grants for research and development (R&D) are more plentiful, especially for innovative products and processes. These grants can help you plan, develop, test and refine your idea. They may take you through several stages but ultimately you’ll have to find the final funds to go to market with your concept.
What strings are attached with grants?
Grants can be targeted and have restrictions. The money might only be able to be spent on specific things, or in certain places. For example:
you might have to do some type of orientation or training before you can access the funds
they might have a time limit, such as having to do your R&D within 12 months
you may need to put up an equivalent amount or combine it with additional funding
you may have to justify what you’ve done with the grant, or share results if, for example, you used the money for R&D
How to apply for a small business grant
The money might be free but you’ll need to show why you deserve it.
Don’t rush it
Be prepared to put in some serious time on the application. So read up about what’s required from you before you commit. Check the time frame: how long will it take to apply and get an answer? Can you wait that long or is another source of funding a better idea?
Tailor your application
Do your homework as to why the grant was created and its purpose. Your application should show how your business fits the aims of the grant and how the grant will help your business – and make a wider difference if that is an objective.
Expect to provide information on yourself as well as your product or service, your market demographics, and how you plan to spend the grant. This may involve charts, graphs, and budgets. Know the strengths of your business so you can impress. Your business plan should have most of the information you need.
Chapter 8, Pitching for business funding
Seeking business funding is a major step. Here’s how to help lenders and investors understand your business and decide whether to take the risk with you.Read next chapter