If your small business needs a cash infusion, you may be able to secure a grant from a government agency or a private organization. A small business grant, unlike a loan, is money awarded without the need for the business to pay the money back. It can be a great help, and may even make the difference between success and failure for a financially struggling business.
Thousands of grants are waiting to be claimed by eligible small businesses, and many of these come from federal, state, and local governments. Getting one, however, is not going to be easy unless you meet very specific criteria.
In an article on the Small Business Administration website regarding federal grants, Caron Beesley warns, "Any grants must be appropriated through Congress and The White House and are tied closely to specific agency agendas, such as the Department of Energy or the Department of Agriculture. To further complicate matters, the government has very stringent rules about who it provides grants to and what those funds can be used for. That being said, certain businesses – particularly those in high tech/R&D fields – may qualify for government small business grants."1
The federal government provides an entire website specifically for grant-seekers at Grants.gov. This includes a tool that lets you fill out web forms and apply for grants with colleagues and a search tool that will let you search grant opportunities based on keyword, category, eligibilities, funding instrument type, and agency. It also provides a learning center where you can educate yourself about grants, as well as a variety of other resources for applicants.
SBIR.gov, which comes from the SBA, is self-described as "America's seed fund." This is the site of the Small Business Innovation Research (SBIR) program, which provides grants to small businesses who engage in research and development with the potential for commercialization.
The site is also home to the Small Business Technology Transfer (STTR), which is another program awarding businesses grants for R&D, as well as the Federal and State Technology Partnership (FAST) Program. This one is designed to "strengthen the technological competitiveness of small businesses."
If any of these program descriptions sound like something you might qualify for, check out SBIR.gov, which could be a very valuable resource for you.
Also on the federal level is Challenge.gov, which provides a listing of competitions from over 100 agencies. According to the site, over 740 challenges have been run since it was set up in 2010.
Regional, State, and Local Grants
Look to your region, state, and city for other potential options. Reach out to the Economic Development Administration2 to learn of grant opportunities in your area. If you operate in Nevada, you can also check out information provided by the Department of Business and Industry.3
Non-government grants can come from a wide variety of sources, including nonprofits and corporations. These may be somewhat easier to obtain under the right circumstances, but again, will require you to meet very specific eligibility guidelines in most cases.
The National Federation of Independent Businesses (NFIB) lists some great options to research.4 These include: the annual FedEx Small Business Grant competition5, an annual grant from Lending Tree6, a competition from Miller Lite7, and a grant from the National Association for the Self-Employed8. You may find many other options if you take the time to conduct some research.
Should You Apply?
The idea of getting a small business grant would seem very attractive to most businesses, and a grant can certainly be a major blessing to a business that is strapped for cash. It's important, however, not to let the idea of "free" money cloud your judgment, because the reality is that most grants ultimately ask a lot in return, even if this isn't in strictly financial terms.
Grants can be very time-consuming in more ways than one. In addition to a large amount of paperwork that may be required, some grants may come with expectations that your business put in a certain amount or type of work that wouldn't otherwise be necessary. There might also be a need to justify your worthiness to the entity that gave you the grant, not to mention a great deal of competition to obtain it in the first place. If you do obtain it, it can take a long time to actually get the money, and you might have the grantor asking for frequent progress reports. Suffice it to say, you should not take the decision to apply for a grant lightly.
Whether or not you're able to obtain a small business grant – or wish to – Nevada State Bank has options for helping you finance your company through term loans, real estate loans and business lines of credit.
The information provided is presented for general informational purposes only and does not constitute tax, legal or business advice. Any views expressed in this article may not necessarily be those of Nevada State Bank, a division of ZB, N.A.