You can apply for a small business grant from a variety of sources—the federal government, your state or city government, and a wide range of private foundations, charities, and corporations. Once you’ve found a grant that you’re eligible for, you’ll typically need to apply online and attach a number of documents.
Business grants can be very competitive, so it’s worth spending the time to make your application as thorough and professional as possible. Grant applications can be quite time-consuming, but business grants have several key advantages over small business loans; most importantly, grants don’t need to be repaid.
- There are essentially four steps in applying for a small business grant: finding a grant that you’re eligible for, collecting the relevant documents, writing the application, and waiting.
- Most donors, including federal and state governments, will allow you to submit your documents and make your application online.
- You can maximize your chances of receiving a small business grant by doing in-depth research on grant opportunities, thinking deeply about how and why you are applying for a grant, and spending the necessary time on your application.
- Keep in mind that small business grants can be highly competitive—especially those offered by the federal government—and it’s unlikely that you’ll be successful on your first application.
How to Find a Small Business Grant
The first step in applying for a small business grant is to find one for which your business is eligible. In fact, this might be the most time-consuming part of the application process. Most small business grants are designed to meet the specific objectives of the donor organization and therefore can have very specific eligibility requirements.
To find a small business grant, you should check several sources:
- The most likely source for a business grant is the U.S. Small Business Administration (SBA). In addition to its loan program, this agency offers business grants to small businesses engaged in specific types of work, or owned and run by women and minorities.
- The SBA also runs the Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs, which support businesses in carrying out research and commercializing the results.
- Grants.gov is a website that lists all of the business grants administered by the federal government in detail and allows you to search for a suitable grant.
- There are also a number of other federal agencies that offer grants to specific types of small business, including the Department of Agriculture (USDA), the Department of Energy (DOE), the Environmental Protection Agency (EPA), and the National Institutes of Health (NIH).
- Your state or local government may also offer small business loans. Many of these are listed on the State Business Incentives Database.
- The U.S. Economic Development Administration (EDA), which is part of the U.S. Department of Commerce, can also be an excellent resource for small businesses looking for state grants.
- Finally, Small Business Development Centers (SBDCs) can also be a useful source of advice and guidance. There are almost 1,000 of these centers across the country, and they can help you find and apply for grants for your business.
How to Get a Small Business Grant
Once you’ve found a small business grant that you’re eligible for, it’s time to apply. The wide range of donors and available grants makes it difficult to describe the “average” process for this, but in general, the process can be broken into three main steps.
1. Check Your Eligibility
This may sound obvious, but it’s a very important step in the application process. Most business grants, whether from the government or private donors, are designed to achieve the specific objectives of the donor, and they have correspondingly specific requirements for who can apply. Therefore, you should read the eligibility requirements very carefully.
Most grants have requirements when it comes to your business location and size, and the industry you work in. Some also have match requirements, where you are obligated to match the funding you receive from the grant with investment from your own funds. Some grants require that your business be owned or run by women or someone from a minority community, and others may even require that you are a member of a specific organization before you can apply.
If you have any doubts at this stage, you should contact the grant administrator, because you don’t want to waste time applying for a grant that you are never going to get.
2. Gather Appropriate Documents
Most grant applications will require you to submit a number of key documents in support of your application, so you should make sure you have these before starting your application.
The most common document is a business plan. This should prove that your business is stable and well-run, and has feasible plans for growth. The business plan you submit as part of your grant application should also explain why you are applying for the grant, how it will help your business develop, and how you plan to use the funds.
Other documents that might be required as part of a grant application include:
3. Complete the Grant Application
Once you’ve found a grant that you’re eligible for and have all the necessary documents, you can actually start applying.
The complexity of your grant application—and the amount of time you’ll need to spend on it—can vary a lot depending on the kind of grant for which you are applying. Grants from the federal government, for example, are highly competitive and can be for significant amounts of funding. To ensure that these grants go to the correct businesses, the process of applying for these grants can be quite complex.
Whichever type of grant you apply for, however, you’ll likely have to answer a series of open-ended questions about your business and how you plan to use the grant. Some applications will also ask how your business fits into—and contributes to—your local community.
Tips for Qualifying for a Small Business Grant
Since business grants are such an attractive source of funding for small businesses, they tend to be very competitive. This is especially true for federal grants. State and local grants tend to be less competitive, but to maximize your chances of a successful application, you should still take the application seriously.
Here are some tips to make your application as competitive as possible:
- Contact the donor. It can be a good idea to contact the grant organization in advance of your application. You can ask questions about the grant, or explain why you think your business is a good candidate for it. The donor organization may be able to give you tips for applying, or share resources that can help you.
- Read the grant objectives. Make sure you refer to the grant objectives in your application. From the donor’s point of view, the best applications are those that clearly hit these objectives, so make it easy for them to see that.
- Spend time on your business plan. A well-developed and well-written business plan is arguably the most important part of your application. Make sure yours is in-depth, complete, and professional. If you’ve already started trading, you’ll need to provide examples of your business position and balance sheet.
- Explain how you’ll use the grant. Most small business grants are designed to be used for a specific business purpose, so make sure you explain how you’re going to do that. The more detail you can give here, the better.
- Check your match funding. For most grants, you’ll be required to match the donor’s funds with your own. You should check that you can actually do this before you apply for the grant.
- Apply early. Most grants don’t have specific deadlines—they run until the the donor organization has granted the money it has assigned to the program. Therefore, it’s crucial that you keep on top of the opportunities in your sector, and apply for grants as early and as quickly as you can.
While all these considerations can seem like a lot when you first start applying for grants, most businesses find that it gets easier with time. Once you have all your documents and are accustomed to writing in a way that donors understand and like, you’ll find that applying for grants becomes significantly easier and ultimately more successful.
What Is the Most Common Small Business Grant?
The Small Business Administration (SBA) offers a variety of grant programs to support small businesses. The most popular federal grant program is the Small Business Innovation Research (SBIR) program, which provides funding for research and development projects.
What Is Considered a Small Business?
In accordance with SBA regulations, the majority of manufacturing firms employing 500 individuals or less, as well as non-manufacturing enterprises with average yearly earnings below $7.5 million, will meet the criteria for classification as a small business.
Why Would a Grant Be Denied?
There are many reasons why a grant application can be unsuccessful. You may not be eligible for the grant, or you might not have made it clear enough how the grant will support and develop your business. Alternatively, it could be that your application was great, but the donor received so many applications that it was unable to fund you this time.
What Are the Chances of Receiving a Grant?
The answer depends on the type of grant you apply for and the strength of your application. Federal grants, in particular, can be highly competitive, so only a small number of applications will be successful. If you are consistently denied a federal grant, it can be worth applying for state or local-level funding instead.
The Bottom Line
There are essentially four steps in applying for a small business grant: finding a grant that you’re eligible for, collecting the relevant documents, writing the application, and waiting. You can maximize your chances of receiving a small business grant by doing in-depth research on grant opportunities, thinking deeply about how and why you are applying for a grant, and spending the necessary time on your application.