Owning a business is extremely rewarding, but it can also be very stressful. One of those stressors is coming up with investors or capital to run your day-to-day operations or invest in new equipment, product lines, or other expansions. As a small business, you may jump at the idea of getting funds that could help your company get over the next hurdle. A business grant may do just that. Below is what you need to know about small business grants.
What Is A Small Business Grant?
A grant is money provided to a business or person from the federal, state or local government. It may also come from private companies or corporations. Unlike loans, grants do not need to be repaid. However, you may need to qualify for the grant, or you may need to use the money for a specific purpose.
How Do I Find A Small Business Grant?
Grants come from a wide variety of sources. You will need to do some research to determine which grants are available to you. There are a wide variety of options, but you need to know where to look. Below are a few suggestions:
- Small Business Administration: www.sba.gov
- Federal Government Grants: www.grants.gov
- State websites to search for grants
- Local websites (county and city)
Sometimes your local chamber of commerce will provide helpful information regarding grants that are available in your specific area. Local or national nonprofits may have opportunities to apply for grants as well.
Generally, when a grant is available, the government entity or nonprofit will release a Funding Opportunity Announcement that sets out what you need to do to apply for the grant and how to get more information.
Quick Tips For Grant Approval
One of the most important things you can do to increase your chances of obtaining a grant is to have a detailed plan for how you will use the money. Be sure that your strategy aligns with the overall goals of the grant and that you meet all of the necessary qualifications.
As part of your application, you should also be sure to:
- Provide complete and accurate information.
- Double, triple check your work to be sure that every portion is complete and does not have any mistakes.
- If possible, talk to the grant officer ahead of time to get tips and information about the particular grant.
- Consult with experts like accountants and financial planners as necessary.
- Know your market and present that information in your grant application.
- Keep in touch with the grant officer to check on progress and answer any questions they may have.
- Be realistic about your budget and your goals.
You should keep in mind that grants are never a sure thing, so you should have other options for funding.
The Downsides Of Grants
Although it is hard to come up with any disadvantages of getting free money, there are a few that you should consider before you start to apply.
- They are time-consuming. Grant applications can take up a significant time investment. For many busy business owners, applying for a grant can be too time-consuming to accomplish in one session.
- They only apply to certain businesses. Your company must meet stringent requirements to qualify for a grant. In many cases, you need to “prove” that you are worthy of the grant and that you will use the money for a specific purpose.
- They are unpredictable. You cannot really count on grant money, which makes it hard to plan for the future. Although you may meet every qualification, only a few companies will be awarded a grant -and that may not include your company. Competition is fierce.
- The review process takes a long time. Even after you submit an application, you may need to wait weeks or even months to determine if you have been approved for the grant. Then, there may be an additional waiting period to receive the funds.
- Getting a grant may mean extra surveillance. Once you are awarded a grant, you may have someone checking in on your company periodically. Having someone invested in your success can be a good thing, but it can be very stressful as well.
Because of all of the hoops that businesses need to jump through to get a small business grant, some companies take the extra step of getting professional help with their application and their plan for the grant money ahead of time.
HJR Global helps business owners by providing them with advice, information and tools to achieve growth and success. We also offer potential funding options for businesses that are looking for startup funding or extra capital to expand. Contact us to learn more.