A small business grant is funding set aside for small business entrepreneurs to encourage healthy business growth in local economies. Though the small business administration does not currently offer grants of its own, it is a valuable resource for finding grants in your area.
Finding Small Business Grants
The Catalog of Federal Domestic Assistance (CFDA), as well as the economic development agency for your state, are good places to start researching the kinds of government-funded small business grants available. Most of these grants are funded with money from the federal government to encourage the development of specific kinds of businesses in your area. The Foundation Center and the Council on Foundations are resources for finding private grants. Foundations award billions of dollars in grant money to businesses and individuals each year.
Types of Grants
Some grants are devoted to encouraging ethnic minorities and women to start small businesses. Other grants are aimed at food source production such as agriculture and fishing. There are grants to encourage the development and implementation of new technologies for manufacturing facilities, as well as grants to identify and develop sustainable energy resources.
Grant Restrictions and Qualifications
Another thing to consider when it comes to small business grants is that many of them come with specific criteria on how the funds can be used. You may need to relocate your business to an area of poor economic growth and show how the funds will be used to provide more jobs to the area. Or, the funds may only be allocated for research and development, as in the case of new technologies and alternative energy. Other funding restrictions may include how many people you employ or the legal structure of your business.
Matching Grant Funds
Aside from being specific to a local or state economic growth plan, a small business grant may come with other qualifications as well. The small business grant is not often the sole source of business financing for a small company. You may be required to match grant funds with your own personal investment or with a matching small business loan.
How to Apply
The application and approval process for a small business grant is often lengthy. Ensure that your application is completely filled out and provide a detailed business plan that clearly demonstrates how your business will achieve the desired economic growth as set out by the funding.
If you are a small business owner looking for ways to fund your business, consider applying for a small business grant. While there are an abundance of both government and private grants available, most have very specific qualifications and restrictions on how the funds can be used. When you find a grant that fits your business, fill out the application forms thoroughly; include your business plan, and be prepared for a long and rigorous approval process.
With matching funds and a little luck, you may be the recipient of money for your business that never needs to be repaid!
