The Best Small Business Government Grants in 2023
It costs money to start and grow a small company, but there are other financial paths you may pursue to get finance. Government subsidies are a coveted alternative for many small company owners. The federal, state, and local governments provide a number of incentives to assist small businesses in starting, expanding, and developing their operations. Discover the top government grants for 2020, how to apply, and five suggestions to help your company get one.
What is a small business grant?
In essence, a small business grant is free money provided to a small company owner to support the start, growth, or expansion of their enterprise. Grants, unlike loans, do not need to be repaid, but they often contain limitations on how they may be used.
A grant is not always simple to get just because it is free money. Small companies should only apply for grants they are qualified for since it takes a lot of time and effort to do so and they are fiercely competitive.
Entrepreneurs and small company owners may apply for a range of grants, including public grants from the federal, state, and municipal governments as well as private grants from businesses. Additionally, there are grants available for certain professions and groups of people. For instance, if you run a minority-owned company, you may be eligible for one of the minority-owned business awards.
Business grants vs. business loans
As was already said, you are not required to return a gift. However, you may not be eligible for many grants if your company is still in the early stages of creation or you have just launched it. The fact that many grants have stringent guidelines for the grant application and grant proposal processes is another possible drawback of grants. Your request will be turned down if it doesn’t adhere to the exact specifications imposed by the organization.
Finding a loan provider could be a good idea if you’re just starting out in company (two years or less) and it’s doubtful that you’ll be given a grant.
The ability to get the money you need to fulfil your demands is one benefit of a business loan, as opposed to grants, where the amounts are predetermined and may not be enough to satisfy your company’s needs. Another benefit is that certain lenders may have less stringent standards, such as lower requirements for minimum monthly revenue or duration of operation.
Where to find business grants
Some of the most reliable sites for discovering grants that might help your company are listed below:
- One of the best websites to look for grants is SBA.gov. There are several grant and funding possibilities on the government website.
- The most comprehensive database for government awards is Grants.gov. By financing kind, eligibility, category (arts, business and commerce, health), and agency, you may search for grants. Be aware that searching through the database may take some time, but it might be worth it if you discover a grant opportunity that is ideal for your business.
- To encourage the creation of new employment and economic development in economically struggling towns, the Economic Development Administration offers grants.
- Similar to this, small business development centres provide nearby assets that might benefit your company.
Resources, such as public and private financial sources, are available to assist companies deal with the severe economic recession that the coronavirus has caused.
- The SBA manages Economic Injury Disaster Loans, which may provide companies the operating money they need to pay their workers, their rent, and other expenditures.
- Companies like Verizon have established programmes that provide grants to small firms in addition to government loans.
Government grants for small businesses
For many small firms, government grants are an attractive source of revenue. The U.S. Small Business Administration (SBA), the U.S. Economic Development Administration (EDA), and other well-known organizations are sources of government grants, but small businesses should search all three tiers of government (federal, state, and local) to find the best grant for their operation.
If you’re thinking about using this as a source of money, look into these government grants for small enterprises.
Small Business Innovation Research and Small Business Technology Transfer programs (SBIR, STTR)
Some of the greatest government incentives for for-profit small enterprises pioneering in science and technology are offered under the SBIR and STTR programmes. Due of their intense competition, they encourage small enterprises to carry out research and development in the hopes of ultimately bringing their product to market.
These initiatives provide small companies with money as well as chances to collaborate with nonprofits. You must run a small company with more than 50% American ownership and less than 500 workers in order to qualify.
These initiatives are divided into three stages:
Award is for six months (SBIR) or one year and ranges between $50,000 and $250,000. (STTR). Finding technical value, commercial potential, and practicality are the goals.
The typical award is $750,000 over two years (SBIR and STTR). The goal is to carry on Phase I’s research and development initiatives.
SBIR and STTR programmes do not provide funding. To seek commercialization is the goal.
State Trade Expansion Program (STEP)
Consider STEP money if you’re small company needs grants from the state. State organizations get STEP incentives to boost exports and sales inside their jurisdiction.
To utilize STEP resources and broaden their consumer base internationally, small enterprises may locate STEP grantees in their state. Small enterprises may engage in international trade missions, learn how to export, and create items that will appeal to customers abroad with the financial assistance of STEP.
Environmental Protection Agency grants
The EPA offers billions of dollars in grants and other assistance agreements to a range of enterprises, from tiny NGOs to huge state governments. Its main goals are to promote environmental and human health development. The EPA webpage includes useful information such applicable laws and policies, application procedures, grant options, and training opportunities.
USDA Rural Business Development grants
A small firm operating in a rural location (population under 50,000) with fewer than 50 employees and less than $1 million in gross sales may be a strong candidate for financing from a USDA Rural Business Development grant.
This grant is given to public organizations (cities, municipalities, states, NGOs, etc.) to help small and new enterprises in rural areas that are based in fields including land development or acquisition, pollution management and abatement, rural transportation enhancement, and economic development.
Other rural grants, loans, and loan guarantees are also provided by the USDA. Based on your particular state and industry, you may focus your search. You may get information about each award from here, such as deadlines, funding amounts, and terms & conditions.
U.S. Department of Education grants
The U.S. Department of Education offers subsidies to small firms involved in the education sector. Numerous funds are available via it for certain purposes such scientific research, public education, special schooling, and rehabilitation. Each grant includes a list of programme details, including who is eligible to apply, the total programme financing, award limits, and the total number of awards.
Program for Service-Disabled Veteran-Owned Small Businesses
Through its Service-Disabled Veteran-Owned Small Business Program, the U.S. Small Business Association provides government funds to service-disabled veteran-owned small businesses.
You must fulfil specific ownership and operating conditions in order to be eligible for the programme. One or more service-disabled veterans must be involved in both short- and long-term decision-making in a small business, for instance, and they must own and control at least 51% of it. You will be qualified to apply for contracts that are set aside if you participate in the SDVO SBC Program.
Funding for small businesses impacted by COVID-19
If your business is facing financial distress due to the coronavirus pandemic, securing a general government grant is not you’re only financing option. For example, the SBA is offering additional relief funding specifically to those impacted by the pandemic.
These funding options include the following:
- The Paycheck Protection Program
- Economic Injury Disaster Loans
- SBA Express Bridge Loans
- SBA Debt Relief
Additionally, said Ty Stewart, CEO and president of Simple Life Insure, “Many states are currently offering relief programs and alternative short-term funding opportunities to hard-hit businesses. Your chance of finding fitting opportunities increases the more local that search is, so try to prioritize ones available in your county or state.”
To give you an idea of what type of local relief may be offered in your area, Ryan Pitylak, chief marketing officer and founder of ZenBusiness, listed several local grant examples, including:
- The Save Small Business Fund
- The Michigan Small Business Relief Program
- Minnesota DEED Small Business Relief Grants
- The NYC Small Business Continuity Loan Program
- The Seattle Business Stabilization Fund
Although a smaller number of businesses are eligible for local funding programs like these, they are still highly competitive. If you want to apply for a local COVID-19 relief program that has already allocated all of its current funding, check the details to see if they anticipate providing another round of aid.
How to know if your business is eligible for a grant
It’s crucial that you only apply for business grants for which you qualify since the procedure of doing so is time-consuming and complicated. Check the specifications and deadlines of each grant you are considering in detail to help you focus your search on a small number of opportunities. If you satisfy the basic business requirements, go one step further and make sure your objectives line up with those of the organization providing the grant.
Will Ward, CEO of Assistive Listening HQ, said that businesses “need to be conscious of the issue they are trying to remedy utilizing the funding?” “It should be confirmed if resolving this specific issue is one of the objectives of the government body providing the funding.”
Researching comparable issues being addressed by other businesses and the amount spent, according to Ward, can assist you demonstrate your qualifying for the award. Once you’ve identified a grant that supports the objectives of your business, the following step in determining your eligibility is to confirm that you can fulfil the grantor’s prerequisites.
How to apply for (and get) a government grant
Obtaining a grant from the government is difficult. Although grants are free money in theory, you should invest a lot of time and effort into making sure your application is as strong as it can be to offer your company the greatest opportunity of obtaining a grant and getting financing.
The preparation of the grant application and the requisite documentation will need a significant amount of time, according to Pitylak. It is suggested that you do a cost-benefit analysis to determine if it is worthwhile.
Getting a grant from the government is similar to getting any other award. Prior to applying, you will need to put in a lot of effort obtaining the necessary documents (business plan, business records, administrative details, funding objective, etc.) Next, you should specify the kinds of grants for which you are qualified and carefully study the conditions for each grant before choosing a handful that particularly pertain to your company. Before applying, you may wish to meet with the funding provider.
The last step is to wait after writing and submitting your grant application (or hiring a grant writer to do it for you). Wait at least three to six months before getting in touch if the grant doesn’t have application tracking or next steps mentioned.
One option is to apply for a grant from the government, but how do you really acquire the award? To understand five suggestions for obtaining a grant, we consulted with seasoned company executives.
Create a professional resume.
You should detail the length of time that you have been in company, monthly income, and anticipated uses of the grant money in your professional “résumé,” which should include answers to questions that are certain to be asked while determining the eligibility of your firm. Additionally, a business strategy and professional photograph are worth included.
Partner with a large local organization.
Start by investigating well-known companies or brands with local headquarters that have a CSR strategy, said Stewart. Businesses often fund partnerships and grant programmes to encourage the growth of the communities in which they operate, particularly those near regional or global headquarters. They have a stake in such towns’ continued prosperity, which includes supporting pertinent small companies.
Connect with your city’s or county’s economic development council.
According to Stewart, “This arm of government often compiles an ongoing list of grant possibilities.” When it comes time to apply for grants, “having a working connection with economic development council employees or members may help you keep in the know about these programmes and enhance your company’ exposure in your region.”
Use your digital assets.
Along with other physical assets, businesses should concentrate on digital assets like social media handles and websites, according to Ward. When consumers search for the firm, “the digital assets operate as the face of the company and should create a favourable first impression.”
Think outside the box.
Small enterprises must distinguish themselves from the other award submissions, according to Ward. “To impress the people in authority, business owners should think imaginatively and implement novel ideas. It might be as easy as making a humorous video that explains why your company idea is worthwhile.