Grants for small businesses include a financial gift from an organization or company towards a smaller company. The best thing about business grants is that the company that receives the grant does not need to repay the amount. In most cases, grant providers include governments, foundations, and big companies. They offer grants to facilitate the performance of small businesses towards a bigger goal.
In this article, you will first learn about how small business grants work and how small businesses get access to these grants. However, the focus of the article would be to give you full information about the major grants available for small businesses. Here, we will mention the types of grants available with the federal government, state governments, local governments, and corporations. Hence, to learn more, read on through to the end of the article.
Grants For Small Businesses: A General Overview
According to Investopedia,
“A small-business grant is an award, usually financial, given by one entity (typically a company, foundation, or government) to a company to facilitate a goal or incentivize performance. Grants are essentially gifts that usually do not have to be paid back.”
However, the IRS (Internal Revenue Service) considers grants as a form of income. Hence, they are subject to taxation.
Big organizations offer grants to address specific purposes of small businesses that will benefit both parties. Hence, the application process for small business grants is time-consuming. This time is called “the grant lifecycle.”
The grant lifecycle consists of three phases:
- Pre-Award: The organization that awards the grant decides the type and purpose of the grant. After that, it announces the grant and then accepts and reviews applications.
- Award: Here, the grant applicants get information on whether their application was approved or not. Here, the grant-providing agency works with the grantee on the legal framework of the grant. Later on, the agency disburses the funds.
- Post-Award: Here, a grants management officer oversees the grants compliance process. They also check regular reports and on-site audits from the grantee about the usage of grants. The grantor closes the grant once they determine that the grant achieved the target goal.
What Are The Best Grants For Small Businesses?
According to Business News Daily,
“Small businesses can seek various grants, including private grants from corporations and grants from federal, state and local governments. Grants are also available for specific industries and demographics. For example, minority business owners can seek specific minority-owned business grants.”
However, it takes a significant amount of time and effort to research grants for small businesses. After that, the application process is time-consuming as well. But, if you secure a grant, the layoff is worth it. Hence, the next subsections will consist of some of the major federal, state, and corporate grants for small businesses.
Federal Grants For Small Businesses
NerdWallet explains –
“Government agencies are among the biggest distributors of business grants, supporting a range of enterprises from environmental conservation to child care services. Applying may seem intimidating, but federal business grants are great opportunities for entrepreneurs looking to grow.”
The following are some of the major federal grants you need to learn:
1. Grants.gov
This is one of the biggest databases of grants for small businesses. Different federal agencies administer these grants.
2. Small Business Innovation Research And Small Business Technology Transfer Programs
The focus of Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) is on constant innovation and scientific research. These programs help connect small business entrepreneurs with grants and contracts. Twelve government agencies offer these contracts. However, if a business wants to qualify for these programs, it must need to meet special eligibility requirements.
3. USDA Rural Business Development Grant
The Rural Business Development Grant program comes under the control of the US Department of Agriculture (USDA). The aim of this grant is to finance to help grow and strengthen rural small businesses. However, each of these businesses needs to have fewer than fifty employees, and their gross revenue must be less than a million dollars. Furthermore, the location of the business needs to be in an eligible rural area.
4. Program For Investors In Microentrepreneurs
This program comes under the purview of the US Small Business Administration. As per this program, the SBA offers federal grants to microenterprise development organizations. The aim is to provide financial assistance to disadvantaged microentrepreneurs.
State And Local Government Grants For Small Businesses
Since federal grants are applicable all over the country, the competition can be extremely difficult for some businesses. Also, there are a limited number of grant options. Hence, you must look at small business grants from the state and local levels.
The following are some popular state and local government grants you need to check:
1. Economic Development Administration
This grant program comes under the U.S. Economic Development Administration. The focus of this grant is to provide technical assistance to those communities that are in need of economic support. Hence, such grants help in encouraging innovation and entrepreneurship. Each state has such agencies that help finance small businesses in a variety of cases.
2. Small Business Development Center
The Small Business Development Center (SBDC) of your local area also offers grants to provide support to small businesses and entrepreneurs. To contact them, check your state’s economic development agency or local universities.
These bodies will help you connect with such small business grants. They also help small businesses get access to financial opportunities, as well as counseling, training, technical assistance, and more.
3. Minority Business Development Agency
This agency consists of a national network of business centers that helps minority-owned small businesses by promoting them and helping them grow. Here, small business owners get easy access to capital, access to new contracts, and more so that they are in a better position to compete in emerging markets.
The agency holds a small business grant competition every year. Once you register in the MBDA, you will get help with debt-based financing applications. Apart from that, they also help you apply for federal, state, and local business grants. Here, you will receive all the updates on the website.
4. State Trade Expansion Program (STEP)
State governments can implement this grant with the help of SBA funds. This fund from the STEP grant helps small businesses to expand into new and international markets by covering costs. However, the amount you get may depend on the state where your business is located. Furthermore, this factor also affects the available funding amounts and the eligible grants for government small businesses.
Corporate Grants For Small Business
Some large companies and corporations also provide small business grants. Here, some of them provide grants to non-profit organizations, while others provide grants to conventional businesses. Here are some of the major corporate grants you need to learn about:
1. National Association For The Self-Employed (NASE)
Once you become a member of NASE, you can apply for small-business grants for up to $4,000. Furthermore, this association also offers an annual college scholarship of $3,000 to the dependents of the members. The organization offers grants throughout the year, and they review grant applications every quarter.
2. Verizon Small Business Grant
Verizon offers a Digital Ready program to small businesses, where owners get the opportunity to access different educational materials and free courses. Furthermore, they also help business owners apply for grant funding.
It is mandatory for businesses to register on the Verizon website and complete at least two tasks out of live coaching courses and community events. This makes the business eligible for a $10,000 grant. After completion of these tasks, the business must submit a grant application.
3. FedEx Small Business Grant Contest
According to Shopify.com,
“Open to businesses with fewer than 99 employees and that have been in operation for at least six months. FedEx awards more than $250,000 to small businesses, including $1,000 in FedEx print credits to prize winners.”
However, to apply for a grant, your business needs to have a valid FedEx shipping account number. Also, you need to be currently shipping with FedEx.
4. Small Business Growth Fund Grant
Global Entrepreneur Fund and Hello Alice partnered together to create the Small Business Growth Fund. The fund providers are Etsy and Progressive. This fund is for entrepreneurs to grow their operations. Here, the program awards grants between $5,000 to $25,000. However, these grants are for businesses that have a gross revenue of less than $1 million.
5. Venmo Small Business Grant
Here, twenty eligible entrepreneurs will get grants of $10,000 for their small businesses. Moreover, businesses also get public promotion on the Venmo website and social media accounts. Apart from that, they are also eligible for mentorship from industry leaders. However, you will need to have a US Venmo account and a valid business profile on Venmo. Also, the business needs to have annual sales of less than $50K and ten employees or fewer.
6. Amazon Small Business Grant
As per the Amazon Small Business Grant program, small businesses with Amazon business accounts will get free grants. However, for eligibility, the business needs to have an annual revenue of less than $1 million. Here, 15 businesses will get amounts ranging from $15,000 to $20,000.
7. U.S. Chamber of Commerce Top Small Business Awards
As per this program, top small businesses that contribute highly to the US economy are eligible to get grants of $25,000. Furthermore, businesses also get grants based on various categories of performance. However, these businesses must be in operation for one year.
8. Visa Everywhere Initiative
This funding is for tech-forward startups. If a business has developed its product/service by involving Visa’s products, it is eligible to receive grants of up to $50,000.
Grants For Starting A Business
It is difficult to get a federal grant for starting a business. However, many state and local governments, as well as corporations, provide small business grants to start a business. Here are a few to learn about:
1. Bizee Fresh Start Business Grant
This fund offers $2,500 to new entrepreneurs as startup costs. Apart from that, the winning business owner also receives free startup formation services from the state. Moreover, this business also receives free registered agent services and free tax consultations for a year.
2. Hello Alice Grants
This organization partners with companies like Progressive, DoorDash, and more to offer small business grants to startups. Businesses need to register to receive notifications.
3. Amber Grants For Women
WomensNet offers this monthly grant to women-owned businesses. Furthermore, they also award two $25,000 grants every year. Additionally, the company also receives additional free funding throughout the year.
4. SubSummit Pitch Competition
This grant is for subscription-based businesses that are less than two years old. However, companies need to participate in a competition. After winning, a business receives $10,000 as a grant and $40,000 worth of business services.
Grants For Small Businesses Hardships
NerdWallet adds –
“Small-business hardship grants can help you recover after an emergency situation, like a natural disaster or public health crisis. These grants may be available from the government, nonprofits, or corporations, among other sources.”
The following are some of the major small business hardship grants:
1. State And Local Small-Business Recovery Grants
State and local governments offer emergency business loans, as well as financial relief and assistance. These grants come in handy during crises like the pandemic or in cases where the business suffers from damages.
2. Etsy Emergency Relief Fund
This grant comes in the form of financial relief in the aftermath of disasters. Here, to offer the grant, Etsy partners with CERF+. Here, the sellers at CERF+ receive the grants.
3. DoorDash Restaurant Disaster Relief Fund
As per this program, restaurants that experienced setbacks due to natural disasters will receive a grant of $10,000.
Final Thoughts
Hope this article was helpful for you in getting a better idea of the major grants for small businesses. However, before you apply for these grants, you will need to read the information-related documents carefully, as well as the eligibility requirements. Furthermore, also make sure your business aligns well with the organization’s mission.
Do you know of some other grants for small businesses? Consider sharing some information with us in the comments section below.
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